Zimbabwe: TIMB Seeks Funds for Small-Scale Growers

Source from:  The Herald 10/22/2009

THE Tobacco Industry and Marketing Board has engaged a local financial institution to mobilise funds on behalf of small-scale farmers, who are failing to access loans because they do not have collateral. The move by the TIMB follows challenges that most farmers are facing to access loans from banks, which are insisting on security. This has also been compounded by the absence of a specific finance facility for tobacco growers this year, as had been the case in previous years. While availability of inputs has generally improved compared to previous seasons, the major challenge for farmers was inadequate working capital. TIMB chief executive Dr Andrew Matibiri said while farmers could still catch up with the season, the issue of funding was likely to negatively affect this season's targeted hectarage. Government has set the target at 65 000 hectares. In the event the fund raising initiative is successful, the funds would be used to procure chemicals and fertilizers especially for farmers not on contract schemes. "The situation is not good especially for A1 and communal farmers who lack security," said Dr Matibiri. "This has prompted us (TIMB) to negotiate for loans on behalf of farmers and we have engaged a local financial institution." A farmer requires about US$2 600 for seed, fertilizers and chemicals and labour to plant a hectare, according to the TIMB. Dr Matibiri however, could not disclose the amount the tobacco board was looking at. He said separate negotiations were also underway with local banks for relaxation of lending condition for farmers to access the loans. "We are also working with the CBZ and other local banks to see if they can soften lending requirements." Tobacco farmers who were owed by the Reserve Bank of Zimbabwe for the proceeds of the sale of their crop last season are yet to receive inputs that the central bank promised under the "Debt fertilizer swap" scheme. Farmers last year failed to meet the target, set at 65 000 ha largely due to the shortage of inputs. Zimbabwe last year produced an estimated 55 million kilogrammes of tobacco. This may not be the exact size of the crop as some farmers preferred to sell their crop on the black market while others smuggled the crop outside the country. This has resulted in some tobacco contractors reducing the number of farmers they assist, particularly those who breached contracts by selling their tobacco to third parties, who often pay more. Other con- tractors also failed to supply growers all the inputs required. Tobacco production in Zimbabwe has plummeted since 2000 as a result of successive poor rains compounded by shortage of raw materials. That year, the country produced the largest crop ever of 236 million kilogrammes of tobacco, making it the world's second-largest exporter after Brazil. Enditem