Record tobacco sales mask declining crop productivity

THE state media went to town this week, hailing the record 238 million kg of tobacco sold as at July 23 in this current but soon-to-close tobacco marketing season, which is an improvement on the 237 million kg delivered in 2000.

The Brett Chulu Column

Space does not permit to interrogate the latter. On the surface, this seemingly impressive tobacco figure points towards an economic recovery path. Admittedly, it is an important economic number that is meant to be a report card on the effectiveness of our government’s policies and also a baseline to inform the trajectory our economic policies should take. We cannot swallow this critical number hook, line and sinker; doing so would be tantamount to glorifying intellectual stupor. The “Zimbabwe is open for business” refrain must be based on credible financial and economic numbers, not unclothed post-truth frolics.

Science is an undertaking of organised scepticism. That canon of science leaves us with no option other than putting this huge economic number into the crucible of analysis to separate the genuine from the dross.

The fact that, as per the 2017 Tobacco Industry and Marketing Board (TIMB) Statistical Report, only 188,9 million kg of tobacco were delivered last year can, if taken at face value, be politically abused as a sign that the so-called new dispensation is responsible for bringing the fillip being experienced this current season. The key metric that should talk to tobacco farming policy effectiveness is productivity.

At Independence, 64 068 hectares (ha) of tobacco were harvested, giving a yield of 1 951kg/ha. By 1989, productivity had soared to 2 280kg/ha in 1989. The year 2000 marked the beginning of the structural change in farming as forced land seizures were visited upon the white commercial farmers as part of a political survival stratagem to keep the ruling party in power. This is the very year tobacco productivity peaked at 2 729kg/ha, a 39,8% increase from the 1980 level.

The graph eloquently narrates the story of tobacco productivity decline from 2000 to the present. One cannot miss the huge trough of productivity from 2000 to 2008, the era the bull of hyperinflation raged without ceasing, paring tobacco productivity by an unbelievable 244% to a measly 792kg/ha , a calamitous fall from the glorious 2 729 kg/ha recorded the year farms were violently seized. That the Government of National Unity (GNU) brought recovery in tobacco yields is beyond debate.

During the Government of National Unity (GNU), tobacco productivity recuperated from the embarrassing yield of 792kg/ha to a remarkable 2 108kg/ha in 2014. Someone might argue that in 2014 the GNU was already entombed and thus the recovery should be attributed to the post-GNU. It is a moot point.

However, in my opinion, the 2014 peak is most likely due to the momentum built from the GNU. This seems to be a more plausible attribution as the graph shows the onset of another trough from 2014 to 2017. It is indisputable that post-GNU tobacco productivity has been on a decline year after year to 1 705kg/ha. This decline is ironic in that it is during the post-GNU that the total area of tobacco harvest increased to record levels, clambering from 88 627ha in 2013 to 110 816ha in the 2016/2017 season.

The Reserve Bank of Zimbabwe, in its quarterly report for January to March indicated in this current season, the area under tobacco had declined to 104 397ha from 110 518ha (2015/17). This would suggest that tobacco productivity has recovered to 2 280kg/ha, surpassing the GNU productivity levels. This is still below the closest yield of 2 267kg/ha recorded in 1998, but with 23% less land.

With this array of evidence before us, the truth about the record cumulative delivery of 238 million kg of tobacco charted on Monday this week can neither be masked, nor massaged nor embellished: it is on the back of declining productivity. The peak tobacco delivery cannot be milked for political dividend because the steep rise in area under tobacco crop post-GNU has diluted productivity year-on-year.

The number of active tobacco growers has never been greater during the post-GNU than in any era of our country dating as far back as the coming in of the British South Africa Company in 1889 to appropriate our motherland.

Active tobacco growers grew from 87 383 in 2014 to 97 066 in 2017. This sharp increase comes from communal and A1 resettlement farmers. It is indeed commendable that the post-GNU era has “democratised” tobacco farming by bringing in masses of new entrants into tobacco farming. However, that proliferation policy has not been accompanied by effective institutional support as the graph shows a concomitant decline in overall national tobacco yield.

An area policymakers have failed to intervene meaningfully in is skewed tobacco pricing.

In 2017, the average export price of tobacco was US$4,96 per kg, but the average market price at which local tobacco was bought by merchants and at auction floors was US$2,96 per kg. This means exporters got 67,5% more on average. Average is a statistic that can be leased to hide warts and, as such, we need to peel this statistic. The average export price masks the variation in export prices.

In 2016, China bought our tobacco at US$8,19 per kg and in 2017 bought it at US$7,88 per kg. Contrast this with South African merchants who bought our tobacco at US$3,03 per kg in 2016 and at US$3,23 in 2017. Now compare the US$2,96 per kg given to our local farmer and the US$8 that an exporter fetches from selling the same tobacco to Chinese buyers; it is a huge discrepancy that cannot be wished away.

It is scandalous that tobacco merchants reap 2,7 times more than local farmers.

Those who understand the law of multiples insofar as returns are concerned will be riled to the marrow by this commercial iniquity. This is a substantive issue that government should be addressing through clear policies if it is trumpeting that it is the champion of lifting people out of poverty through agricultural support is to creep past posturing and empty magniloquence. It is actually surprising that none of the presidential candidates raised the matter of skewed agricultural pricing as a low-hanging campaign fruit.

Here is the sum of the matter: tobacco production has increased to record levels at the expense of productivity.
Chulu is a management consultant and a classic grounded theory researcher who has published research in an academic peer-reviewed international journal. — [email protected]