Zimbabwe: 2010 Landmark Year for Golden Leaf

Source from:  AllAfrica.com 09/13/2010

This year's tobacco marketing season will be remembered for a number of reasons, the major one being that it signalled a turning point in the industry's fortunes. A total of 119 813 490 kilogrammes were sold during the marketing season which lasted eight months and was spread over 127 selling days since February 16. This is more than double the 58,6 million kilogrammes that was sold during the 2009 season. In essence the 119,8 million kg can be interpreted as a bold statement of intent by growers to reclaim the country status as one of the world's leading tobacco growers. The 119,8 million kg realised US$347,8 million at an average price of US$2,90 per kilogramme. Although the season officially closed on Friday last week with the above total having been sold, the figure could be much higher as contract sales are continuing and a mop up sale has been pencilled for September 28. The seasonal total marked the first time in eight years that tobacco production has surpassed the 100 million-kg mark. Many industry stakeholders were caught off-guard in their predictions of the size of the crop with the Tobacco Industry Marketing Board being the major culprit. The Board was forced to revise its target not once, but twice and in the end it left the target open. From the initial 77 million kg, the TIMB shifted to 93 million before settling for 114 million. Stakeholders believe that this is the beginning of better things to come as the crop has become the number one choice for farmers. TIMB has thus been urged to put more effort in ensuring smooth selling of the golden leaf. The just-ended season was not smooth sailing as measures put in place by the TIMB failed to exorcise the ghosts of perennial problems that have haunted previous seasons. The early start to the season failed to deal with congestion at the floors due to a number of factors. Payment of farmers was a major contributor to this problem and in the end many farmers milled within the auction floors for days waiting to be paid. This, however, improved following the introduction of more buying teams and the re-introduction of the booking system before delivery. Farmers have suggested that in the next season pay- ments should be processed as soon as a grower sells his crop. According to the Zimbabwe Farmers Union, small scale and commercial farmers were required to sell from different sections at contract floors, which farmers felt was unfair and bordered on discrimination. Secondly there was the issue of poor prices that forced the closure of floors due to farmer protest. There were claims that buyers were conniving with merchants to fix prices to the detriment of farmers. In addition, some corrupt officials at the auction floors tempered with the scales thereby prejudicing farmers of the real value of their produce. Other problems included the shortages of wrapping material, which underlined the need to introduce more players that sell the wrapping paper as the shortages created arbitraging, with middlemen fleecing farmers by placing mark-up on the scarce commodity. The contract system also presented challenges to growers as not all companies provided adequate inputs. Farmers also felt the Tobacco Industry and Marketing Board, which was monitoring contracts, took no action to protect farmers. Many growers however feel that comprehensive contracts be negotiated by all parties before signing. Farmers' unions have also pledged to assist farmers at the negotiations before signing of the contracts. Contracts should also be reviewed and signed before the beginning of each season. Tobacco growers also had problems securing financial assistance. An issue requiring urgent attention. On the issue of prices, farmers suggested that TIMB sets up a negotiating forum composed of farmer representatives and contractors to discuss issues of costs and prices in the tobacco industry. Given the foregoing, the general feeling is that the TIMB should be very alert and on its toes between now and the next season if the current momentum is to be sustained. Enditem