Zimbabwe: Tobacco Sector Set for Boom

Source from:  The Herald (Harare) 15 October 2007 10/16/2007

The tobacco sector is set for a boom this season and is well on course to reclaim its rightful place as the number one foreign currency earner in the country. Statistics released by the Reserve Bank Governor, Dr Gideon Gono in his Mid-Term Monetary Policy Statement indicated that the mining sector had outperformed other sectors including agriculture in export receipts for the first eight months of the year. However, with the various interventions that have been put in place tobacco is set to be at the zenith of foreign currency earners for the country. A number of factors point to this notion, chief among them has been the fact that the sector has been able to improve production due to ongoing reforms in the agriculture sector. Tobacco production fell from about 200 million kg in the 1990s to a 30-year low of 55 million kilogrammes in 2006 before picking up to 72 million kg this year. A target of 120 million kg has already been set for this year and preliminary indications are that preparations are well on course. A total of 495 kilogrammes of tobacco seed has been sold so far. If the seed is planted at the correct sowing rate of an average 6,5 gramme per hectare it would cover over 75 000 hectares. The hectarage was expected to be sufficient for the country to achieve its targeted tobacco yield for farming season 2007/08 with favourable weather conditions. Tobacco farmers are already benefitting from the Reserve Bank of Zimbabwe Agricultural Sector Productivity Enhancement Facility with over $286 billion having been disbursed under the tobacco facility as at August 31. Interest rates that apply under the ASPEF facility were recently slashed from 50 percent to 25 percent as a way of encouraging farmers to produce. As an added incentive the Foreign Currency Account retention allowances for tobacco growers were raised from the current 20 percent to 25 percent for next year. Most farmers were smiling all the way to the bank after benefiting from a Government support price of $40 000, calculated on a pro-rata basis benchmarked on US$1,50 a kg. The support price was later increased to $55 000 a kg towards the end of the season. In addition a number of tobacco farmers have already benefited from the farm mechanisation programme through the provision of an assortment of farm machinery such as tractors, ploughs, disc harrows, boom sprayers and irrigation equipment among others. At least nine companies have poured trillions of dollars in support of contract farming in tobacco. Stakeholders believe that the incentives are the right tonic to further jolt farmers into producing again. "One can never have asked for more barring the inadequate rains, this should be the year for tobacco farmers to make a bold statement," said Mr Chikoti Masandu, a tobacco farmer. Another tobacco farmer, however, said that while the effort made was commendable the issue relating to electricity had to be addressed. "We are aware that the Government was spending millions on generators to get around the issue in some areas but this intervention in some cases will prove to be more expensive in the long-term," said another farmer. Mr Masandu said while focus has remained on increasing production there was also need to pay particular attention to quality. "So far I believe we have done remarkably well as a country and that is why our tobacco has continued to draw a number of foreign buyers year after year but we need to build on that," he said. Enditem