Zambia: Tobacco Farmers Earn K180bn

Source from:  Zambia Daily Mail 08/07/2012

JTI Leaf Zambia Limited, a subsidiary of Japan Tobacco International, says it has financed and purchased tobacco worth K180 billion from farmers countrywide. And the firm is targeting to increase production volumes by between 15 and 25 percent this year. corporate affairs and communication manager Litiya Matakala says K50 billion was financed to small- scale farmers in form of loans to grow tobacco during the farming season while total tobacco purchases amounted to K130 billion. Mr Matakala said the firm is currently supporting 5,200 small-scale farmers in Lundazi, Chipata and Kaoma districts and 15 commercial farmers. He was speaking in an interview in Lusaka at the on-going 86th Agricultural and Commercial Show whose theme is "Building on Today’s Prosperity". Mr Matakala said during the first year of operation in 2010, the firm captured 2,500 farmers in Kaoma and is this year expected to capture 3,200 farmers. He said the company expects to produce 3,800 metric tonnes (about 3.8 million kilogrammes) of tobacco this year. He said the tobacco grown in Zambia is processed in Zimbabwe and Malawi, later exported to Europe through the holding company which manufactures cigarettes. Mr Matakala explained that the crop is exported raw from Zambia because the country lacks a processing and cigarette manufacturing plants. He said there are opportunities to open a cigarette manufacturing plant in the Zambia but the key driving factor is increased tobacco cultivation. "We are just about there for the entire industry, setting up a plant means that we should be looking at investing US$ 50 million to US$70 million , we will be looking at this as long as the volumes are there to operate efficiently," he said. On the target for this year, Mr Matakala said the firm is hoping to grow volumes in the range of between 15 to 25 percent depending on the availability of growers. He said the industry faces key challenges such as tobacco not being grown as a mainstream crop. "We have a number of initiatives to open a research farm and a training center for small scale and commercial farmers to provide them with skills to grow quality crop," he said. Mr Matakala also urged Government to look at the regulatory environment as the tobacco act enacted in 1960 is outdated. He said the industry is further faced with challenge of sales floor infrastructure and efficient payment systems. "We face difficulties in paying our farmers on time as banks in rural areas are failing to provide the liquidity," he said. JTI International manufactures cigarette and operates in 120 countries worldwide. It employs over 25,000 people across 90 offices, 24 factories, six research, developments centers and five tobacco processing facilities. Enditem