Zim tobacco production in limbo Zim land a dead asset - finance minister
HARARE - Zimbabwe expects production of its largest single foreign currency earner tobacco to fall this season as erratic rains in the eastern parts of the country affected output.
The country produced a record 253 million kilogrammes of tobacco last year, but poor rains badly affected the crop in most parts of Manicaland and Masholaland East provinces, the chief executive officer of Tobacco Industry and Marketing Board Andrew Matibiri told Business Weekly in an interview.
Where climatic conditions were favourable, output and quality would be “much better.”
“The situation is so dire in Manicaland and Mashonaland East Provinces where the rainfall patterns were not so good and as a result we won’t get much as last year’s record crop but we will be over 200 million kg,” Matibiri said.
A crop assessment will be finalised this week to give the estimated tobacco output for this year, he added.
Tobacco is largely grown by small-scale farmers, who are largely financed by private companies as they lack collateral to from banks.
About 80 percent is grown under contract farming schemes, according to the TIMB. Registered farmers increased by 44 percent to 170, 169 farmers from 118, 142 for last year.
Of the 170, 842 registered growers, 4,1 552 are new. Farmers last year delivered a record 252 million kilogrammes of flue cured tobacco worth $737.2 million.
Matibiri said the TIMB is still consulting stakeholders on when the next season would start.
This season, farmers will retain 50 percent of their earnings in hard currency, from 30 percent the Reserve Bank of Zimbabwe initially announced in the Monetary Policy Statement.
Central bank governor, John Mangudya said the move was meant to stimulate production to tobacco and earn the country more badly needed forex.
Apart from tobacco, other main sources of Zimbabwe’s foreign currency are gold and cotton.
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HARARE - Zimbabwe's controversial land reform programme, which left most of its land without collateral value has meant the country is now carrying a dead asset, its Finance and Economic Development Minister Mthuli Ncube has said.
Before land reform, most farmers had title or property rights to their land, but close to 20 years after the programme, most of the land has no title and as a result, farmers have little access to loans.
The cancellation of property rights and security of tenure imposed such limitations on farmers and have had a negative impact on the country's economy.
Ncube, however, believes government can restore the collateral value of land and restore farmers’ access to billions of dollars-worth of credit that would immediately improve the country’s production volumes. He believes dealing with the issue of land tenure and farmer compensation is critical for the country to be able to securitise its land assets. Speaking at a breakfast meeting to review the 2019 Monetary Policy Statement, Ncube said it is critical that the government restores property rights on land. "We have created a dead asset in the form of land, and we need to turn it into a productive asset.
"One of the issues that needs to be dealt with is the issue of 99-year leases, there is still some work to do to close that off. Because without 99-year leases, we can’t create enough cover in terms of property rights for banks to extend credit to farmers," said Ncube.
Ncube also said there is need to compensate farmers as this is a "bigger elephant in the room."
"I must say that is an issue that I am currently seized with and I am very pleased to say that we as Government have made a lot of progress.
"We have done valuations for nine provinces and we know the values of the improvements. We should be able to conclude the evaluations by end of March.
“Only then can we start debate about securitisation of the land. We can switch to corporate finance mechanisms to compensate the farmers and launch a land bank. But the first order of business are the 99-year leases," said Ncube.