Tobacco rebound could go up in smoke
2010 07 02 –
The Zimbabwe Independent
2010 07 02
http://www.theindependent.co.zw/business/27045-tobacco-rebound-could-go-up-in-smoke.html
Thursday, 01 July 2010 18:59
POOR prices, shortage of wrapping paper and high input costs threaten the rebound of tobacco production next season, farmers have said. Farmers are holding on to their tobacco, anticipating an increase in prices as a kilogramme was fetching an average US$ 0, 90 throughout June.
Acting chief executive officer of the Tobacco Association of Zimbabwe, Wilfred Nhemwa, said poor finance was also hampering preparations for the next season.
“Farmers are now forced to sell their crop at very low prices as they prepare for the next season,” said Nhemwa. “We are hoping to see a change in the prices (both this season and next season). The inputs are still very high as a bag of Compound D costs between US$ 30 and US$ 35 while Ammonium Nitrate is between US$ 25 and US$ 30.”
Nhemwa said the prices were out of reach for most of the farmers and it does not compare very well with the prevailing cost in Malawi, for example, where a bag sells for US$ 7.
Government has also tried to rebound the crop by providing subsidised fertiliser through the Grain Marketing Board (GMB), which farmers said is not readily available.
Lovegot Tendengu, executive director of the Farmers Development Trust (FDT) said inputs, unlike in the previous seasons, were available at a reasonable cost and insisted that anyone could get fertiliser and other inputs from the GMB.
“The Grain Marketing Board (GMB) is offering fertiliser at US$ 15 per 50kg bag,” said Tendengu. “This is a significant reduction on the US$ 38 charged per bag last year. We should appreciate that fertiliser cost US$ 91 two seasons ago and stop complaining.”
Nhemwa said farmers would not have complained of poor prices if cheaper inputs had been made available.
“There has to be a balance (between the floor prices and input costs) if the production of the crop is to rebound,” added Nhemwa.
Farmers have also faced serious shortage of wrapping paper, leading to cases where growers would fail to deliver the crop to the auction floors.
At least 77 million kgs of tobacco are expected to go through the auction floors this season after the Tobacco Industry and Marketing Board (TIMB) revised output upwards from the projected 65 million kgs.
At 77 million kgs, Zimbabwe has increased production on the 56 million kgs sold last season, setting the foundation for a possible rebound but farmers said there could be stagnation as a result of the problems faced this season.
Tobacco accounts for more than 50 % of agriculture exports in the country, translating to 30% of total exports. Tobacco also makes up 10% of the country’s gross domestic product.
Based on the 2001 tax rate, the crop, if grown on large scale farms which accounts for the bulk of the crop produced, tobacco generates an estimated US$ 132 in government revenue for every hectare that is put under the golden leaf.
The large scale commercial farms produce an average of 2 500 kgs of tobacco per hectare put under the crop.
Leonard Makombe