Finance, Inputs May Hinder Increased Tobacco Production

Source from:  The Herald (Harare) Leonard Makombe 09/29/2004

THE anticipated rise in tobacco production for this season may not come to fruition if the issues of financing and timeous provision of inputs are not addressed. Some commercial farmers and thousands of small holder growers have ventured into tobacco production but have failed to increase output due to these constraints. Initiatives by Government and the private sector have been well-received but much more still needs to be done. An agro-economist, Mr Jonathan Kadzura said it was imperative that a long-term financing plan be introduced for the crop. Already in place so far is Vision 160, introduced by stakeholders in the industry and the Government to increase this season's production to 160 million kilograms. The Vision is being supported by a multi-billion financial facility. "We should not approach the issue of financing the crop on an ad hoc basis. "People should change their attitude towards agriculture and make sure that not only tobacco has been supported but also the other crops," said Mr Kadzura. This would ensure that the manufacturing sector was adequately supported by constant supply of raw materials from the agriculture sector. "It would take us two to three years before investors' attitude towards agriculture change. "Thus, in the meantime there should be fiscal support for agriculture to ensure that there is adequate supply for the manufacturing sector," said Mr Kadzura. He added that should there be adequate financing of the crop then in two to three seasons, there would be a rebound of the entire economy. Vision 160 is also being complemented by the contract system which was incepted last season. Already, the Tobacco Industry and Marketing Board (TIMB) has set aside a total of 20 000 hectares for the growth of the crop under contract farming. There are other private firms such as Farmers' World, Zimbabwe Leaf Tobacco, Tobacco Sales Limited and Zimbabwe Tobacco Growers' Trust who are also involved in contract farming. The Agriculture and Rural Development Authority (Arda) and FSI Agricom are also key players in the new production system. Tobacco yield has been on the decline since 2000, and only 65 million kg of the crop were produced last season. This was a marked decrease from a total of 80 million kg produced previously. Analysts said the financing of the crop remained critical especially with the tobacco bills introduced on the market at the beginning of this month failing to raise the required amounts of money. Two batches of tobacco bills have been introduced, with all bids for the first batch being rejected with the potential investors calling for high yield rates. A total of $32 billion was allotted out of the more than $55 billion bidded for on the second batch of the bills. Tobacco remains one of the country's largest foreign currency earners though it has been on the decline. Enditem