Tanzania: Tobacco Farmers Urged to Increase Production

Source from:  AllAfrica.com 08/20/2010

Tobacco farmers in Tanzania should increase production of the crop to earn more revenue and alleviate poverty. The CRDB Bank managing director, Dr Charles Kimei, gave this advice recently in an interview with BusinessWeek when he handed over 20 tractors worth over Sh1 billion to farmers in Chunya and Manyoni districts. Said he: "Tanzania is capable of producing more tobacco and other cash crops for the country to become a leading producer and exporter in the region." He assured tobacco growers that the CRDB Bank will continue to encourage investment in the Tanzania tobacco industry. He also advised companies buying and processing tobacco to ensure that they add value to the crop by processing it in the country before exportation. The reason is that if all the tobacco produced in Tanzania is exported in its raw form, the country will be exporting jobs and income, he said. "Individuals and companies interested in establishing value addition are welcome to process tobacco and bring about a challenge in the current global economy," he said. However, he pointed out that the industry faces shortcomings of limited tobacco production sponsorship, increased cost of production--particularly the cost of fertiliser, fuel, labour, machinery, and taxation--restriction on smoking, a ban on ingredients, bureaucracy in illicit trade and plain packaging, which have an adverse impact on the business. According to the Bank of Tanzania [BoT] monthly economic review for June this year, tobacco exports rose over the past three years from $20.3 million in 2008 to $38.5 million in the year ending May 2010. Meanwhile, the chairman of the Tobacco Chunya Growers Co-operative Union Ltd [CHUTCU], Mr Sebastian Masika, told this paper that tobacco production will continue to increase and bring hope to those dependent on the industry despite the country's troubled economy. He said the reason for the increase in tobacco production and sale of tobacco leaves is that there are more farmers who have been growing the crop in many areas. Moreover the 20 tractors loaned to growers by the CRDB Bank would boost tobacco production as a result of increased tobacco farming, he said. In order to improve the quality and quantity of tobacco production, he called on the country's commercial banks to extend more loans to tobacco farmers with soft lending terms. "Formalities of the commercial banks are major impediments to tobacco growers in obtaining bank loans," he said. The CHUTCU chairman said they have asked commercial banks to review agreements between farmers and tobacco processors as a guarantee for extending loans to tobacco growers. However, he said there is a lot to be done in expanding the tobacco farming areas and make tobacco growers meet their demands. Mr Masika explained that the expansion is a two-pronged solution. It increases the living standards of farmers while benefiting buyers and processors who have to export tobacco to meet their needs, he added. Enditem