ZIMBABWE
A projected 44 million kilograms of tobacco from farmers who benefited from the US$28 million credit facility from the Reserve Bank of Zimbabwe is expected to go a long way in shielding the auction system, which had come under serious threat from the contract system.
Zimbabwe has a dual marketing system where the produce is sold through auction and contract. However, according to official data, the auction system, which determines minimum grade prices for contract sales, has been falling with 80% of the crop now sold through the contract system, leading to warnings that the collapse of the auction system would lead to massive price manipulation through contract sales as the majority of farmers are contracted by private firms.
The auction system used to be the marketing model of tobacco around the world, but “free” tobacco volumes have shrunk as farmers, mostly those who benefited under the land reform, joined contract schemes as they did not have the funding to finance themselves.
However, analysts have expressed reservations over the projected 44 million kg, arguing the dry spell, which hit most parts of the country, could affect expected production. An official with a local tobacco contractor said, “On paper yes, but looking at the situation on the ground, it is difficult to meet the target. The dry spell really affected farmers and part of the crop is a write-off.”
In early February, Tobacco Industry and Marketing Board (TIMB) chief executive, Andrew Matibiri, said the dry conditions had withered the tobacco crop and prevented farmers from applying top dressing fertilizer. He also said the prolonged dry spell made it impossible for some of the crop to grow. While he hoped the rains currently received could redeem some of the crop, Matibiri stressed that part of the crop had already been lost.He also said a countrywide crop assessment exercise would be conducted to ascertain the extent of the damage to crop.