Tobacco industry must allay farmer fears 

Source: Tobacco industry must allay farmer fears | The Herald

Tobacco industry must allay farmer fears
Minister of Lands, Agriculture, Water, Climate and Rural Resettlement Perrance Shiri

The 2020 tobacco marketing season opened yesterday, starting with the auction sales and the larger contracted crop following.

Farmers are always nervous over two factors they cannot control, the weather and the prices buyers will pay. Having managed, despite the far-from-ideal rainfall this season, to produce a respectable crop, farmers are now biting their nails over prices.

Controls required to combat Covid-19 make this nervousness far more severe, since most growers are not allowed to be physically present when their bales are sold.

Changes brought to this year’s marketing season mean most farmers will neither be able to escort their crop nor witness the price determination process. They will have to contend with a single representative for hundreds of individuals to keep numbers at the floors to bare minimums.

So it is now essential that the Tobacco Industry and Marketing Board (TIMB) ensures that the sale process is not only aboveboard, but that farmers can accept that it is, even if they cannot see the sales.

Regardless of how the authorities see, and know, how the sales are done and however they are certain everything is transparent and above board, they have to take into account the fears of the growers. The majority of the more than 100 000 tobacco farmers in Zimbabwe, are small scale resettled farmers making a living from growing tobacco. Many do not have the sort of detailed information they need as to how much a large cigarette factory in China or Europe is prepared to pay for 1 000 tonnes of the Zimbabwean leaf.

And everyone needs to remember that tobacco is an export crop. Zimbabweans smoke a tiny percentage of our output, so the eventual foreign buyer is the one who pays the piper and calls the tune.

But pricing information must be disseminated as it becomes available. Flooding the farmers with information rather than just saying “trust us” is required.

Minister of Lands, Agriculture, Water, Climate and Rural Resettlement Perrance Shiri had some good suggestions yesterday as he opened the floors, calling for far better use of information technology to give the farmers a virtual presence at the floors, even if they could not be physically present.

That can be done quickly, and can be done at various levels from fancy web pages, which accessing might kill a small farmer’s data budget, to frequent text messages and using things like WhatsApp chats.

Some of the problems that we saw last year have been addressed, not to the extent that farmers want, since that is impossible in every country.

But at least the worst of the mess we saw at last year’s season opening day has been partially addressed.

That day was rocked by sharp differences between farmers, buyers and the Reserve Bank of Zimbabwe over low prices and foreign currency payment modalities, causing farmers to briefly withhold their crop.

The central bank has allowed the retained 50 percent in foreign currency earnings to be regarded as free funds, a huge concession, but has declined farmers’ desires for a variable exchange rate or adjustment of the 50 percent forex retention threshold.

TIMB chief executive Andrew Matibiri, however, allayed fears that farmers could be prejudiced in their absence since price discovery is done through a bidding process.

“Tobacco prices are determined through a bidding process. The highest auction floor price forms the minimum contract tobacco price. I don’t know what people mean when they talk about price manipulation.

“TIMB will be monitoring all the people to make sure that there is no (auction) price collusion or against any particular person. In contract sales we use a price matrix to determine minimum price,” he said.

He needs to get that information down to the village level.

He is correct, but farmers forced to stay at home need more than just an assurance.

TIMB is independent, but perhaps needs more inspectors and certainly needs better and more instant communication to allay fears.

Zimbabwe Tobacco Association (ZTA) chief executive Rodney Ambrose, who represents mostly large commercial growers, said with the selling season only starting this week, they were cautiously optimistic that farmers will get fair prices for their crop.

But small and indigenous black farmers fear they are in for another rude awakening from unscrupulous contractors and middlemen that seek to undercut prices through collusion. Those fears must be addressed openly and that means doing more than the minimum in inspection and communication.

Even Zimbabwe Commercial Farmers Union (ZCFU) president Shadreck Makombe confirmed fears among farmers given most farmers will not attend the actual sales process. Perhaps online-streaming to the local centres would help.

According to TIMB guidelines, farmers will also not be allowed to sleep over at the floors. They must deliver today and sell the following day, while trucks with minimum load capacity of 7 tonnes are barred from carrying tobacco bales.

Tobacco is Zimbabwe’s biggest export crop and the country’s second largest export earner after gold, as it earns the country around US$1 billion annually.

The earnings go a significant way in enhancing the country’s trade balance, which has averaged minus US$233 million between 1991 and 2019, before posting a record high of US$293 million last December.

So it is not just farmers who have a stake in the prices. The more farmers earn the more Zimbabwe earns.

Deliveries, which totalled 258 million kilogrammes last year, are projected to decline 20 percent this year, due to the negative impact of drought on the crop experienced in many parts of the country.

It is our hope that farmers will realise fair prices in line with the variable quality of each individual’s crop after a patchy rainy season and that not only can underhand practices be controlled, but farmers can be convinced they are controlled.

Farmers will never be happy over the prices they get, but they can be satisfied that no one is cheating them.