Tobacco growers double

HARARE - Registered tobacco growers have doubled to 50 418 so far for the forthcoming 2013 season despite threats to Zimbabwe’s tobacco production as a result of global smoke reduction strategies and recent anti-tobacco marketing bans.

According to statistics released by Tobacco Industry Marketing Board (TIMB) this week, the number of registered tobacco growers grew by 49,4 percent from 25 466 registered same period last year with Mashonaland Central topping the list with 17 110 tobacco growers.

It is followed by Mashonaland West with slightly more than 14 000 growers. TIMB said Mashonaland East had so far contributed 9 719 growers, Manicaland 8 727 growers, Midlands 333 and Masvingo 200.

The whole of Matabeleland registered a single tobacco grower.

A1 farmers constitute 43 percent of the total registered tobacco growers whilst communal farmers make up 39 percent with small-scale farmers contributing 10 percent.

A2 and large commercial farmers are six percent and two percent respectively.

The increase in registered tobacco growers strongly indicates that tobacco farming is on the rebound and is now considered a reliable source of income for most farming households owing to its base as a cash crop.

TIMB said the country earned $525 million from 144 million kilograms of tobacco in this year’s season from last year’s $360 million.

Although a nine percent increase in total production was achieved in the just-ended season, overall output missed the 150 million kgs production target.

This season’s 144 million kgs is the highest production achieved since the redistribution of land to indigenous Zimbabweans over a decade ago, but it remains way below the year 2000’s peak of 236 million kgs. Of the total, 52 million kgs were sold through auction and the remainder via a contract system.

TIMB said the average price per kg this year was $3,65, reflecting a 34 percent increase in average prices compared to last year.

Tobacco is one of Zimbabwe’s major agricultural exports, accounting for 10,7 percent of the country’s Gross Domestic Product.

Major export destinations include China, United Kingdom, South Africa, Indonesia, the United Arab Emirates, Mauritius and Russia.

However, tobacco production in Zimbabwe might take a hit following the adoption of anti-tobacco marketing bans and packaging cigarettes in drab boxes devoid of branding in countries such as Australia and New Zealand with neighbouring South Africa already contemplating the move. In the event that Zimbabwe adopts such a piece of legislation it will have severe negative consequences on the economy as a whole.

Savanna Tobacco — a major cigarette manufacturer in the country — acknowledged that tobacco farming is one of the sectors in which small-scale farmers have been successful and in the event that such legislation is introduced in Zimbabwe, it will have negative effects on the value chain.

“Revenue to the farmer will be decreased and his livelihood will be threatened. Tobacco merchants and processors will not be spared thus there will be an increase in unemployment and a general negative impact on the Zimbabwe economy,” said Savanna Tobacco’s executive chairperson Adam Molai.

Molai added that retailers were likely to record lower sales and less profit.

“Manufacturers in turn will also face decreased revenue if the retailers struggle to sell the cigarettes in this plain packaging which will have graphic warning signs. Industry as a whole is suffering from low capacity utilization and this will be worsened if cigarette manufacturers are forced to produce less,” said Molai.

Molai noted that excise duty from cigarettes is one of the government’s highest revenue earners and this revenue will now be decreased as a result.

“As manufacturers we believe that removing brand names and company colours from packets will lead to a drastic cut in profits and may result in fake products entering the market which affects the fiscus,” added Molai.

He said that the legislation will make the counterfeiters’ job both cheaper and easier by mandating exactly how a pack must look.

“It’s still a bad law that will only benefit organised crime groups which sell illegal tobacco on our streets,” said Molai. - Kudzai Chawafambira

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