High losses blamed for missed tobacco targets
http://www.theindependent.co.zw/
Thursday, 18 August 2011 18:26
Paul Nyakazeya
THE Tobacco Industry and Marketing Board (TIMB) says the industry failed to
meet this year’s projected target of 177 million kgs of tobacco owing to
crop losses of up to 31%at the farms and 21% during the re-handling
process.
The tobacco selling season officially closed yesterday, with mop-up sales
scheduled to last until end of September.
As the tobacco selling season comes to an end, farmers are counting their
losses while the TIMB indicated that the target of 177 million kgs would not
be met.
TIMB CEO Andrew Matibiri said drought and and re-grading of tobacco
impacted negatively on the projected target as 130,2 million kgs of tobacco
had so far been auctioned, raking in US$357,3 million according to figures
released on Wednesday.
“During the current marketing season, tobacco farmers’ crop was affected by
intermittent rains, forcing them to embark on the re-handling exercise which
however accounts for 21% in losses,” he said.
“Other weather related conditions in farms affected the golden leaf,
accounting for 31% of losses. It is against this background that
agricultural experts are calling for extensive educational campaigns on
tobacco growing and handling to ensure that the forthcoming season will not
record high tobacco losses,” Matibiri said.
Tobacco is one of the country’s top foreign currency earners, contributing
26% to Gross Domestic Product last year.
TIMB said this year’s selling season opened early because:
l Tobacco seed beds are prepared in June, while the selling season
traditionally starts in May and ends in August, a situation which usually
compromises preparations as small scale farmers always failed to meet
deadlines;
l Some farmers are into diverse crops and want to concentrate on single
crops. Most tobacco farmers are also into wheat and winter crops;
l Early selling enables farmers to repay debts, as many say they fail to
access loans from banks;
l Those who access loans said an early opening would ensure that they would
escape high interest rates prevailing at banks if they repaid early;
l Contract tobacco farmers said early selling would enable them to apply for
new loans on time;
l Many farmers do not have storage facilities for their tobacco.
TIMB said the industry was prepared for high volumes of tobacco after six
other suppliers of tobacco wrapping material were licensed to avoid
shortages that occurred last season.
No shortage of the packaging material was reported this season. However, the
booking system put in place to reduce congestion at the auction floors was
not as effective, as growers continued to bring their tobacco without
registering. The board had decentralised its booking offices, but some
farmers still failed to take advantage of the arrangement.
This resulted in congestion at the Tobacco Sales Floors, which were the only
operational auction floors when the selling season opened. Boka Tobacco
Auction Floors opened late due to renovations while Millennium Tobacco
Auction Floors also came on board later on.
Over the past two months tobacco sales were averaging between 500 and 600
bales per day in contrast to an average of about 4 000 bales which used to
be traded per day at the peak of the season. Farmers however said it was
normal as the selling season was now coming to an end.
Millennium Tobacco Auction Floors Chairman, Hillary Mombeshora, said the
drop in prices had affected farmers’ returns and said the 170 million kgs
target might not be achieved this year.
“Tobacco is the only crop whereby farmer is guaranteed cash payment there
and then. However indications are that the target set of 170 million kgs
cannot be reached,” he said.
“Liquidity challenges initially affected prompt payment to farmers but the
situation has eased with most farmers expressing satisfaction with services
rendered,” Mombeshora said.
Mombeshora said the licensing of new tobacco auction floors was now the
solution to ease congestion and fetching higher prices at auction floors,
but there was a need for more training of farmers on how best to grow
quality leaf.
Tobacco farmers this year got cash payment for almost all their deliveries
after the Reserve Bank of Zimbabwe increased the cash payment threshold from
US$2 000 to US$10 000 per sale.
Farmers who deliver less than 4 000kg of the golden leaf in one go received
their payment in cash.
The US$10 000 threshold applied per every single sale made and farmers with
more than 4 000kg could split their sale into two within the same day and
still get US$10 000 per sale.