Let tobacco marketing season roll. . . more to gain from improving exports quantity, quality
Editor’s Brief
Victoria RuzvidzoThe commencement of the tobacco marketing season has historically brought joy to the farmer, the buyer and the nation at large. It normally brings the panacea to many foreign currency challenges as it also lines the farmer’s pocket.
They do not call it the golden leaf for nothing!
It is the time of the year when flue-cured tobacco farmers are rewarded handsomely for their hard work. Tobacco is a sensitive and difficult crop to grow. The curing process alone is a feat only for the strong-willed and the far-sighted. The promise of the crispy United States dollar is what motivates farmers to go through the gruelling process which demands intermittent sleep as the barns must be maintained at certain temperatures throughout the night to produce a high quality grade that will bring the dollars in their number.
Of course the adoption of new technology has improved processes to some extent but the crop is for the most daring of farmers. Very few crops equal tobacco in terms of its cumbersome journey from the field to the auction floors.
Floors opened this week, and true to form, the industry is excited. Covid-19 has not taken the cheer away and the assurance of strict adherence to World Health Organisation protocols has made a world of difference. It surely is not business as usual as farmers deliver their produce while buyers have also jumped into action as they stampede to get the best quality for their needs.
Statistics already point to a better season this year. At least 200 million kilogrammes are expected to be sold through auction and the contract system, up from 180 million kg last year. Furthermore, the opening price this season was encouraging, with the first bale having been sold for US$4,30 per kg, up from last year’s $4.
The usual trend is that the first few sales fetch lower sales comparing to what obtains as the selling intensifies. Farmers usually sell their low grade as they test the waters.
Thousands of small scale growers and commercial farmers have ventured into tobacco growing in a big way, with statistics showing a steady rise in production except on a few instances when output has dipped due to natural disasters and inadequate preparations.
The advent of land reform saw many venturing into the lucrative crop. It is no longer unusual to see a village homestead surrounded by tobacco as many seek to taste the greenback that comes from these ventures. Previously it was a preserve of a few commercial farmers but the empowered Zimbabwean farmer has latched onto opportunities presented by the democratisation of agriculture over the last two decades.
Tobacco is Zimbabwe’s largest foreign currency earner hence the excitement is quite understandable. Stakeholders are upbeat about earnings this season, while the Reserve Bank of Zimbabwe Governor Dr John Mangudya has not made it a secret that he is a happy man. More dollars are beginning to flow into the coffers.
The anticipated foreign currency earnings from the leaf will induce further stability on the foreign currency market.
Earnings from tobacco alone take care of a number of needs that the economy faces. Last year the sector earned more than $500 million.
The confidence brought about by the tobacco marketing season also rubs off other elements in the economy which combine to buttress gains in the economy.
“This will, without doubt, enhance the stability of the exchange market, which is very good news,” was quoted as saying.
Informal traders are also rubbing their hands angling for the dollar.
They see this as an opportunity to recoup losses endured during Covid-19 induced lockdowns. Of course the terrain has changed and very few of them if any, will be allowed within the premises but they always have a way of going round this, fuelled by the liquid farmers who will have appetite for wares which range from trinkets to furniture.
Zimbabwe, which earned $4 billion from exports last year, expects to register improved receipts through several initiatives. Tobacco is billed to earn more from value addition.
Agriculture Minister Dr Anxious Masuka last week said the development of a Tobacco Value Chain Transformation Strategy would eliminate challenges and ensure better returns from the crop.
Tobacco has potential to earn more were it not for the fact that it is usually exported in its raw form but adding value would ensure higher earning. One of its major uses is in the pharmaceutical sector hence potential exists for Zimbabwe to process it here and earn more foreign currency to exporting the specific pharmaceuticals.
This is critical in that while Zimbabwe benefits from earnings, it has potential to multiply earnings. Incidents where we export primary products should be long gone.
The West has benefitted more from our resources. After processing, the very items such as cigars and medicines are exported to our countries at high prices and yet we could produce some of these things ourselves.
We have the skills to produce some of the medicines and other products from tobacco. Where these lack, it is no longer difficult to get teams here trained, and in the process maximise on our endowments.
Zimbabwe now needs to push its secondary sectors and ensure the bulk of our exports are value-added.
Such minerals as gold and diamonds can be value added so that we stop exporting our jobs and our wealth. It is surely more beneficial to export a polished diamond or jewellery and other such in place or just gold bars.
Our universities have launched innovation hubs which can spearhead the process while corporates can leverage on international relations to bring the requisite technology in instances where we do not have it here. This is one of the quick-wins with potential to treble foreign currency earnings in a relatively short space of town. We have it all.
If we continue to export primary products and importing finished goods it means our import bill will continue to rise. We currently have more than 2 000 products on our import list and yet many of these could be manufactured locally.
The private sector must come to the party and complement current efforts by Government.
It’s time for action and results.
“Moreover, the anticipated strong balance of payments position, as a result of improved foreign currency receipts and subdued import bill due to increased local production, is also expected to assist in stabilising the exchange rate and limiting its pass-through effects to inflation.
“The stability in the exchange rate will further increase the flow of foreign currency into the national economy, boost domestic production and promote import substitution as we journey towards improving the welfare of Zimbabweans.
“The envisaged price and exchange rate stability will also foster domestic competitiveness and anchor the much needed macroeconomic and financial sector stability necessary for improved production and productivity supportive of the aspirations of NDS1,” said the central bank in February.
This is quite possible given current trends and value addition will surely be a game changer for this economy.
Our mothers in Chivhu, Buhera and other parts of the economy now understand the importance of earning foreign currency. The multi-currency system helped them appreciate the value of the dollar and they have transformed from just wanting to spend it to desiring to earn it.
They are engaged in such projects as the said tobacco growing and production of garlic and ginger for the export market.
The last two can also be processed into spices and powders for the export market.
The options are plenteous and we hope the desire will match this soon so that Zimbabwe can increasingly enjoy its natural endowments. There is more to gain from improving the quantity and quality of our exports.
It means more fuel can be imported, more electricity can be generated and shortfalls met by imports, among other national requirements. So indeed let the tobacco marketing season roll. We need the dollars.
In God I trust!
Twitter handle: @VictoriaRuzvid2; Email: [email protected]; [email protected]; WhatsApp number: 0772 129 992.
