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View of a tobaccocontract floor at Tian Ze in Harare
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A tobacco input distribution ceremony
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A Mashonaland tobacco field
By Thulani Mpofu
Masimba Maimba graduated with a degree in agribusiness from Solusi University in southwestern Zimbabwe in 2008 and like thousands of other locals, he failed to secure a formal job.
However, instead of that qualification giving him an 8am to 5pm job, he, three years later, got an opportunity to use it much more profitably while doing his own thing. The government allocated him a 28-hectare farm in Macheke, a prime farming area in Mashonaland East Province, some 200km east of Harare, the national capital. He started growing maize, potatoes, tomatoes, and wheat. In 2013 he diversified to tobacco.
“I started with 2 hectares, grew to 5. then 20 hectares of tobacco,” he told Tobacco Asia. “Farming is obviously challenging in the initial stage but I continued pushing. I must say I have overcome those initial struggles now to confidently declare that I have had an inspiring journey. Looking at what I have achieved over the past seven years, I also now realize that with farming you cannot go wrong.”
Using the money that he realized from his first tobacco harvest, he bought and developed his first residential stand at Macheke, a small town near his farm. In 2018 bought his second residential stand which he is developing.
“Tobacco is very rewarding because it pays in US dollars unlike crops such as maize and wheat that are bought in local currency. However, what I would say has been my biggest breakthrough to date came in 2019 when representatives from Voedsel came to my farm. They were impressed with what they saw me doing and told me on the spot that they wanted to finance me to grow tobacco. That was an exciting recognition and I didn’t [hesitate to take them up on their offer]. They are pushing me, assisting me with technical training, [providing] all my seed, chemicals, fertilizer, and a market for my crop. It has been so good since then that my farm, which is only 20 arable hectares, has become too small so we are looking for land to rent,” said Maimba, who employs 28 full-time staff.
Voedsel Tobacco International is one of about 20 wholly indigenously-owned tobacco contracting, processing, and exporting companies that are serving the growing number of new black farmers. Formed in 2008, the company started direct contract growing in 2015, and, in recent years, contracts an average 6,000 farmers every season, which makes it rank among the top 10 contractors in Zimbabwe. Last year it bought about 5% of the locally-grown Virginia flue-cured tobacco, which it exports mainly to Asia.
Traditionally, the leaf was grown by white commercial producers in the northern half of the country that is famous for its high rainfall and fertile soils. When then-president Robert Mugabe embarked on a farm seizure campaign in 2000, about 2,000 of the 4,500 white farmers in the country were growing tobacco. Some 500 white farmers remain on their farms nationwide, according to official estimates, but the number of those still farming tobacco is unknown.
However, figures from the Tobacco Industry Marketing Board (TIMB) indicate that in the October 2019-March 2020 season, 148,084 mainly black small-scale farmers like Maimba grew tobacco in the world’s sixth biggest and Africa’s number one producer. They had sold 182 million kilograms of the leaf at an average US$2.50/kg and shared US$453 million. This year’s production was 20% lower than the record 252 million kg realized in 2019.
More than 95% of the crop grown in Zimbabwe is Virginia flue-cured tobacco while burley and oriental constitute the balance. The Zimbabwe Tobacco Association says that the leaf is the best-paying of all the major annual crops grown in the country.
Nigel Foto, also from Macheke and contracted by Voedsel like Maimba, is working only six hectares but has been able to buy cars, build a home, and is now expanding to raising poultry and pig farming, thanks to tobacco revenue.
“I built a shop as well so I am trying to convince my wife, who is a teacher, to leave teaching so that she concentrates on running our retail business,” he chuckled.
Teachers earn an equivalent of US$50 monthly.
In the 2017 paper, Tobacco, Contract Farming, and Agrarian Change in Zimbabwe, that was published in the Journal of Agrarian Change, Ian Scoones, a professor and researcher at the Institute of Development Studies at UK’s University of Sussex, said tobacco growing has transformed livelihoods. He divides farmers in the country into four segments based on their success or lack of it. The “accumulators” are at the top of his rankings, followed by “aspiring accumulators,” “peasant producers,” and the “diversifiers and strugglers.”
The accumulators, he writes, have enough resources to grow tobacco and sell it on their own. They are now able to operate independently because of sufficient resources they accumulated during previous relationships with contracting companies.
“Tobacco income has been invested in tractors and transport vehicles, allowing households to cultivate effectively and transport tobacco to the auction floors,” Scoones said of the accumulators.
“They balance tobacco farming with commercial maize farming, so they spread their risk in terms of agriculture. Many also have other businesses, including tractor hire and transport, but also house rental, as some have invested in real estate in Mvurwi, Mazowe, and Harare from tobacco proceeds.”
Aspiring accumulators are “accumulating from below” and are significantly buying assets, including cattle, solar panels, cell phones, as well as agricultural and other inputs while a large number of peasant producers are graduating to the other two accumulator groups. The fourth group, the diversifiers and strugglers, tend not to grow tobacco but maize.
“Everyone can see success around them, and tobacco is the symbol of this, although some are having their doubts about its sustainability and diversifying into other high-value crops,” he said.
“The tobacco boom has provided a significant group of land reform beneficiaries the opportunity to accumulate. This has had spin-off effects in the rural economy – generating employment, resulting in investments of different sorts, and changes in the local economy as small towns like Mvurwi grow.”
In the early 2000s, said Thomas Nherera, an agricultural economist and retired tobacco farmer, output fell because the new growers were still learning the ropes after the traditional growers had been evicted. The impact of the displacements was at its worst in 2008 when some 50 million kg was harvested.
“Now, the new breed of farmers is firmly on the ground and they have the knowledge and experience, hence the recovery in output,” he said.
“Generally, leaf quality tends to improve, yes, with the right rainfall and other growing conditions but also with the skill levels of the producer. So, quality is improving. I see better preparations now, better skills, improved capital, and the zeal to produce. I see more contractors playing a very influential role in this growth. If one does tobacco and does it well, they tend to be better off. Many new farmers have vehicles, a decent home, basically a higher standard of living than those who do other annual crops. This is because tobacco pays quite well. There has never been a time that the crop has not paid as long as one produces top quality crop.”
More than 95% of all Zimbabwean tobacco is financed by about 30 contractors. Chinese-owned Tian Ze and a local well-established company, Northern Tobacco, are the dominant contractors while Voedsel and Sub Sahara are among the newer ones.
TIMB said by September 10, 171.5 million kg of tobacco worth US$426 million had been sold through contract floors, while auction floors handled 9.1 million kg of tobacco worth US$27.7 million.
The figures show that contract floors pay far better than the auction floors. The highest price offered at the country’s three auction floors was US$4.99 per kg while the top price at the contract floors was US$6.60 per kg.
At inception in 2018, Sub Sahara contracted 2,600 growers spread across the country’s tobacco growing Mashonaland West, Manicaland, Mashonaland East, and Mashonaland Central provinces. The company supported an equal number of farmers last year. In the 2020/2021 season, Sub Sahara will contract 6,500 farmers across the four provinces.
Tapiwa Masedza, Sub Sahara’s public relations manager, said the contracted farmers produced three million kg in 2018 and around the same output last year. He projects that the higher number of growers over the 2020/2021 season will deliver six million kg.
“We are among the emerging contractors who were inspired by the land reform program and are out to support our new farmers,” he said in an interview with Tobacco Asia.
“But unlike other indigenous contractors, we sponsor farmers, buy their crop, process, and export it to Asia and Middle East. In Africa we export to South Africa and Angola. We are also among the first to decentralize in response to the Covid-19 outbreak. We have four contract buying floors in Marondera, Mvurwi, Chinhoyi, and Karoi. This way we assist farmers cut transport costs. Instead of them travelling to Harare, a long distance away, they travel to local contract floors we built. They sell their crop there and get paid.”