Review export incentive – tobacco farmers

Source: Review export incentive – tobacco farmers – NewsDay Zimbabwe November 1, 2017

TOBACCO farmers’ unions are lobbying for a review of the tobacco incentive, with the move prompted by the fact that the sector is one of the biggest earners of foreign currency in the country.


Zimbabwe Tobacco Association (ZTA) chief executive officer, Rodney Ambrose said he anticipates the Reserve Bank of Zimbabwe (RBZ) to announce an updated incentive that would be backdated to the 2015/16 season.

“As ZTA, we have been extensively lobbying the RBZ to increase the incentive and they have assured us that the incentive will be positively reviewed. As tobacco farmers, we expect to receive the highest level of export incentive given we are the single highest generators of foreign currency and employment. We are confident that the governor will announce the new level of support backdated for the past season, soon,” he said.

Ambrose’ argues that farmers under the command agriculture, who predominantly grow maize were enjoying more support ahead of the tobacco farmers who are key generators of foreign currency.

“Farmers undergoing command agriculture have enjoyed much higher levels of support, than us the key generators of foreign currency. We are also lobbying for a portion of sales proceeds in the coming season to be held in US$ currency, so that farmers can obtain their imported input requirements directly so as to reduce costs,” he said.

Under the current framework of the 5%, the RBZ will pay about $28 million incentive at the end of this year, with ZTA maintaining that the quantum needs to be urgently reviewed for the season as it has been fast-eroded by lower grower price averages, low yields and rising costs of production, especially those costs with a foreign currency element.

Last November RBZ paid $29,8 million incentive to tobacco growers.

Federation of Farmers’ Union chairman Wonder Chabikwa confirmed that they were pushing for an upward review of the incentive to 10% and believes this would generate more forex for the country.

“As a farmers’ union we put our ideas together and we said we want the incentive increased. We believe if the incentive is increased there will be more production and more forex generation. We want the incentive to be reviewed from 5% to 10% or more. Our belief is that this request will be entertained because it makes sense,” he said.

Tobacco, gold, platinum and diamonds are key generators of foreign currency in the country.

In 2014, the tobacco export earning raked in $772,6 million, rising to $855 million in 2015. It further grew to $933,3 million in 2016 and it is projected to grow to $980 million by year end.