THE Tobacco Industry and Marketing Board (TIMB) has put a leash on tobacco contractors still owing millions to farmers as the authority intervenes to instill discipline in the sector.
The latest measures will see some contractors not being allowed to buy tobacco in the event they owe farmers their dues.
Contractors, according to TIMB, have since submitted plans on how they intend to pay the growers they are owing and this stretches into the upcoming 2023 tobacco marketing season.
Because tobacco grown under contract adheres to sustainability issues, global trends are shifting towards contract farming. Nonetheless, the issue of funding has always been thorny, particularly where beneficiaries of the post-2000 Land Reform Programme are concerned.
Banks closed their doors on local farmers owing to a lack of collateral, pointing out that 99-year leases were not bankable.
Seeing the yawning gap, resource-rich contractors came in to fill it, and complement the government's efforts by providing financial and technical support to farmers. But in the process, the farmers have also been short-changed.
TIMB in a response to questions from the Independent this week said the authority will make sure that all stakeholders in the tobacco industry pay what they owe
“Contractors have submitted plans on how they intend to pay the growers they are owing and this stretches into the upcoming 2023 tobacco marketing season.
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“Contractors will also utilise the TIMB stop order system to get the money they are owed by growers. The Board will make sure all stakeholders in the tobacco industry pay what they owe for continued success,” TIMB said.
In a bid to instill discipline, TIMB has to date denied three tobacco contacting companies the chance to resume operations after failing to comply with marketing regulations.
TIMB in June this year suspended the operations of eight companies due to the non-remittance of stop order deductions. The suspended contractors were Voedsel, Agritrade, Chevron, Munakiri, Bindura Leaf, Mbaluk, Huruyadzo and Sub Sahara.
The suspension came after the industry regulator introduced new regulations for contract tobacco farming to safeguard the integrity of the contract system to ensure that tobacco growers are not short-changed. At the same time, contractors will be guaranteed their returns.
This was amid a realisation that some contractors were underfunding farmers and overcharging for inputs, while some growers were side-marketing the contracted crop.
Analysts argue that effective enforcement is critical in curbing indiscipline in the tobacco sector.
At the beginning of the tobacco marketing season, the government gazetted regulations to punish players who violate marketing rules.
Contractors and contracted growers involved in side-marketing are now liable to compensate three times the loss suffered by any affected tobacco merchant.
Merchants are also supposed to adhere to minimum funding requirements.
The move to suspend errant merchants is being regarded as a positive action by the TIMB while blacklisting growers found engaging in side-marketing would improve investor confidence, reduce risk and ensure better prices for growers.
Tobacco contributes about 10% to the Gross Domestic Product (GDP) and is one of the top export commodities.
Government plans to increase tobacco production to 300 million kg and encourage investment in value addition and beneficiation.
As part of efforts to bring sanity to the sector, all contractors are now required to submit to TIMB a complete schedule of inputs and their costs and failure to do so will lead to suspension for that season.
Contractors should submit copies of legally binding contracts by September 30 of every year and proof of inputs distributed by either paid-up invoices or payment plans with suppliers.
All contracted growers without accompanying signed contracts will be de-contracted. In addition, TIMB requires contractors to submit a list of all contracted growers including their contact details by November 30 2022.
Tobacco is one of the biggest foreign currency earners in Zimbabwe, alongside gold and money sent back from the diaspora. In 2021, it earned the country around US$1,2 billion.
Zimbabwe, which is the largest producer of tobacco in Africa and the sixth biggest globally, is aiming to turn tobacco farming into a US$5 billion industry by 2025.
This growing tobacco industry has however triggered massive deforestation and this practice is sending Zimbabwe’s forests up in smoke.
Tobacco farming has been responsible for the destruction of over 60 000 hectares of forests each year, according to statistics from the Forestry Commission of Zimbabwe (FCZ).
That equates to around 20% of the country’s total forest loss of 262 000 hectares per year.
Globally, around 3,5 million hectares of land are destroyed for tobacco cultivation every year.
The situation is spiralling despite Zimbabwe ratifying the United Nations Convention to Combat Desertification (UNCCD) in 1997.
In 2005, the FCZ launched an initiative called Tobacco Wood Energy Programme (TWEP), working with smallholder farmers to establish woodlots for firewood that they can use to cure tobacco.
But to date deforestation from tobacco farming remains a huge problem.