Contract Farming Needed to Restore Tobacco Potential

Source from:  Financial Gazette (Harare) 07/05/2004

Zimbabwe is fast losing its competitive edge in tobacco production and gains from it to other countries in the region and the world. This is because tobacco manufactures have found it difficult to get the right amounts, as production has been falling during the past few years. As a result, the multinational corporations that used to invest heavily in Zimbabwe have sought to diversify their tobacco sources of flavour-style tobacco by moving to other countries in the region such as Zambia, Mozambique and Malawi. Reflecting these regional investments, growers of flue-cured tobacco are remarkably increasing production with neighbouring Zambia expecting 16.6 million kg up from 7.1 million kg in 2003 and 5 million kg in 2002. Tanzania has increased by a third to 39 million kg in 2004. South Africa is expecting 27.8 million kg while Malawi projects about 19 million kg. Uganda has increased production by 14 percent to 21 million kg. At an international level Zimbabwe has lost its pre-2001 position of at 200 million kg per season as shown in the graph above. Brazil is expected to produce a bumper tobacco crop of 675 million kg this year from 480 million kg achieved in the past season. This is due to 20 000 more farmers who have joined tobacco farming which has become the major industry among the rural folk. These additional farmers who are mainly contract farmers have seen an increase in hectarage by 12 percent. As a result of this development, Brazil is now the dominant producer of flavour style flue-cured tobacco and has long surpassed Zimbabwe and the US in both production and exports. The US, despite increased anti-tobacco campaigns, has increased its imports of un-manufactured tobacco above the 2003 levels during the first quarter of 2004. The US imports its tobacco mainly from Brazil, Turkey, India and Zimbabwe, among other exporting countries. China is undisputedly the biggest producer of all styles of flue-cured tobacco in the world contributing half of the world's production. The country has potential to produce flavour flue-cured tobacco and is therefore making every effort to improve quality through, among other methods, contract farming. Currently, the bulk of China's output is not premium or flavour style. China, a lucrative market for flavour tobacco, is the leading importer of Zimbabwean tobacco in the Far East region. These remarkable production levels that have been achieved by the above-mentioned countries show that contract farming is the major driving force in tobacco production. Even the regional countries that have been reported to be increasing their tobacco production levels are doing so with financial and material assistance of some sort. Contract farming refers to a situation whereby farmers are given loans on the understanding that they would sell their produce directly to the input financier to facilitate recovery of outstanding debt and reliable supply of the crop. The same should be done here in Zimbabwe if we are serious about reclaiming our previous seasonal average of 200 million kg. This is because tobacco production is a very expensive venture, which cannot be handled by an individual farmer let alone a new farmer who is trying to find his feet in the newly-found business venture. Enditem