Zambia: Tobacco Farmers'' K620,000 Debt Chokes Association

Source from:  Zambia Daily Mail  07/22/2014

Farmers are owing the Tobacco Association of Zambia (TAZ) K620,000 in unpaid loans.

This has negatively affected the running of the association.

In the past, the association undertook direct sponsorship of tobacco production by lending money to some farmers to grow the crop, but have not repaid the loan.

TAZ president Tim Carter said the money, which is owed to the association could be used to reduce the selling cost hence making the tobacco market more efficient and beneficial to farmers.

Mr Carter said this in Lusaka on Thursday at the 50th annual congress of TAZ.

He said in future, the involvement of the association in financing farmers will depend on the manner in which the market will be managed to avoid the same scenario.

Mr Carter also called on key stakeholders in the sector to support the association by providing financial assistance to tobacco farmers.

Last season, negotiations between TAZ, Zanaco Bank and the Zambia National Farmers Union yielded K6.2 million support to the industry.
He, however, said the memorandum of understanding was not signed due to the challenges in the management of the market.

Meanwhile, Mr Carter said the 2013/14 tobacco marketing season has been challenging with a surplus of tobacco on the world market and as dictated by the law of supply and demand,  the prices of the crop has not been to the association's expectations.

He said the low demand for tobacco has been difficult for some farmers who did not have a backup sponsor to buy their crop and have found themselves with no market. Enditem