Tanzania: TTB, Alliance One Scale Up Grower Fortunes

Source from:  Tanzania Daily News 02/22/2010

Dar Es Salaam - AN agreement between the Tanzania Tobacco Board (TTB) and the Alliance One Tobacco Tanzania Limited (AOTTL) has scaled up growers' fortunes in Mara Region with revenues totalling up to 2.2bn/- in the last season. Following the project in which procedures were set on how the large scale processor would buy from small growers, Mara Region raked in some 2.2bn/- from the tobacco sales last season through a total of 1.3 million kilogrammes sold to the company. It's a shift in the growing industry as small scale buyers were initially buying the crop at almost half of the price at a specific rate of 2/5 of the actual value. Mara Local Governments raked in a total of 110m/- as the revenues from trading the product from the region. The statistics were revealed in a clarification by the AOTTL Managing Director, Mr Graham Kayes, at the backdrop of a section of media reports that farmers had complained of being shortchanged by the company by giving less prices in the last season. AOTTL, operating in all tobacco growing areas, but with the main in Morogoro, got involved in the project amid reports that the farmers had been engaged in tobacco production for years, but were using very low levels of inputs to grow the crop, coupled with illegal sell of the crop to neighbouring Kenya using middlemen. As a result, the Local Government lost out on crop cess and the country lost out on value addition processes and foreign exchange. "The objective of this project, among others, was to curb this illegal trade", said Mr Kayes. The agreement, reached by the company and TTB before the start of the buying season in Mara Region, resolved to set out procedures on how the former would buy the crop from the ordinary farmers. According to the arrangement, buying was conducted at the registered buying centres in the region using a dual purchasing system. Tobacco would be classified using both the Kenyan and Tanzanian Government Grading and Pricing Matrix. Alliance One buyers would classify using the Kenyan system and TTB would classify using the Tanzania system. This procedure was adopted because Mara tobacco farmers were already used to the Kenyan grading system and therefore time was needed to train them on the Tanzanian Grading system. "Payments to farmers for their tobacco crop is to be made in instalments based on the highest prices prevailing within the two grading systems", he noted. These procedures were communicated to the farmers in Serengeti and Tarime districts and to the Regional and Local Governments in Mara Region and agreed upon. The Ministry of Agriculture, Food Security and Cooperatives was also informed of the procedures. Enditem