Feature: Zimbabwe tobacco growers feel the pinch as drought, COVID-19 hamper earnings
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E-mail Xinhua, September 15, 2020
by Gretinah Machingura
HARARE, Sept. 14 (Xinhua) -- Peter Hore, a small-holder tobacco grower, finds himself drowned in a huge debt after his crop failed to make profit this year, but has not given up on growing the usually lucrative cash crop in the 2020-21 season.
He blames the poor rains and the COVID-19 pandemic for the poor income from tobacco sales.
"Firstly, the rains were erratic this year and without irrigation, my crop failed to do well. Secondly, the outbreak of the COVID-19 pandemic disrupted normal selling and my crop was sold by the contractor in my absence," said Hore.
Hore's story is shared by many small holder tobacco growers, who feel let down by merchants and the industry regulator.
"Can you imagine getting prices as little as 80 U.S. cents per kg for top quality leaf, compared to about 4 U.S. dollars per kg that we got last year? The quality of our crop this year was almost similar to last year when we got favorable prices," said a dejected Philip Mirisi, a primary school teacher and tobacco grower in Mutoko, 140 km east of Harare.
Mirisi said he failed to fully pay back his loan, and has not been able to get inputs such as seed and fertilizer from his contractor, which he would ordinarily pay for after selling his tobacco next year.
"I will have to raise money from elsewhere in order to buy the inputs. We hope with the goods rains predicted, we should be able to recover next year, provided the COVID-19 pandemic would be over," he said.
The marketing of this year's crop, which started late due to the COVID-19 pandemic, was conducted mainly through virtual sales.
Industry regulator Tobacco Industry and Marketing Board (TIMB) only allowed a few people at auction and contract floors, with farmers that had less than 100 bales asked to sell through agents and at decentralized selling points in the provinces.
Among other COVID-19 preventive measures, the TIMB allowed growers to deliver tobacco for sale only once per week while those selling less than 100 bales were not allowed to attend sales and asked to nominate a TIMB registered grower representative to make decisions on their behalf.
TIMB chief executive Andrew Matibiri told Xinhua that allegations of collusion between merchants and agents to short change farmers were unsubstantiated.
"Those sort of complaints are always there and the complaints that came to us were dealt with properly and fairly. Most of the issues were to do with classification of tobacco... I would like to say that I doubt if there were any real, genuine cases of collusion between the farmers' representative and the buyer," Matibiri said.
Matibiri said the 2019-20 tobacco marketing season was a challenging year for the growers because of the drought and COVID-19 restrictions.
"And in terms of production it was much, much lower than we expected. At the moment we are at about 182 million kg, average price is 2.50 U.S. dollars per kg which is about 25 percent firmer than last year's 1.99. But it's still lower than the prices that farmers got in 2019," Matibiri said.
"The prevailing drought conditions also affected production," Matibiri said.
The TIMB chief executive, however, is optimistic about the upcoming season.
"There are good indications. At least seed sales are looking good. There has been more seed sold this year than what was sold last year and we are hearing predictions of a good rainfall season so those factors hopefully, will assist in increasing tobacco production," he said.
The Reserve Bank of Zimbabwe last month standardized the foreign currency retention threshold for all exporters to 70 percent. According to the new policy, all exporters will receive 70 percent of earnings in foreign currency with the remaining 30 percent transferred into their Real Time Gross Settlement accounts at prevailing exchange rate.
Matibiri said tobacco growers are not included under this new policy and will continue to retain 50 percent of their earnings in foreign currency.
Tobacco growers have been calling for the review of the retention threshold, noting that they are failing to settle their debts with contractors due to low tobacco prices. Enditem
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