smoke out

Zimbabwe is revitalising tobacco farming, but at what price?

By Farai Shawn Matiashe

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Posted on August 8, 2023 04:00

A woman harvests tobacco at a farm outside Harare, Zimbabwe.
A woman harvests tobacco at a farm outside Harare, Zimbabwe. (Reuters/Mike Hutchings)

Zimbabwe has recorded the highest tobacco production in nearly 200 years, but farmers say they are choking on debts to the Chinese.

Africa’s top tobacco grower is poised to take its place as one of the leading tobacco-growing nations in the world. However, farmers who work on contract farming schemes dominated by Chinese companies maintain that they cannot make enough money to live on.

The acting information minister, Jenfan Muswere, announced at a cabinet media briefing in Harare in mid-June that Zimbabwe had a bumper tobacco harvest.

“The country’s tobacco output in the ongoing 2023 marketing season currently stands at 261 million kilograms, surpassing the previous record of 259 million kilograms,” he said.

Some 85% of the tobacco is produced by smallholder farmers, 60% of whom are beneficiaries of the Land Reform Programme, said Muswere, “demonstrating that government policies in the agriculture sector are sound and continue to bear fruit”.

Zimbabwe’s tobacco industry is dominated by smallholder farmers who contribute more than 50% of the country’s yearly produce, according to Zimbabwe’s Tobacco Industry Marketing Board (ZIMB).

The tobacco crop is one of the biggest foreign currency earners for the Southern African nation, along with gold and remittances.

Tobacco rebound

Zimbabwe’s tobacco output plummeted in the 2000s when it launched its chaotic and violent Land Reform Programme under then-president Robert Mugabe.

This saw the eviction of white farmers who accounted for the majority of tobacco growers when ZANU-PF politicians and some Black farmers were given land.

In the late 2000s, Zimbabwe was producing a paltry 50 million kg, a sharp fall from about 240 million kg in 1998, according to government figures.

Mnangagwa, Mugabe’s successor, since taking over the reins of power through a military coup in 2017 has been working to turn around the agriculture sector.

This year’s record tobacco output comes after Zimbabwe recorded the biggest wheat harvest in its history last year.

The country harvested 380,000 tonnes of wheat, which is 20,000 tonnes required to feed the nation, according to government officials.

This figure, which was the highest since 1962, increased from about 300,000 tonnes produced the previous year.

The tobacco harvest success, just like the wheat harvest record-breaking output, is attributed to the government’s strategic planning and favourable policies.

They [the farmers] are trapped by debt. There is not much profit being made.

“The tobacco industry is going for growth, and these large volumes are evidence of our purposeful implementation of the tobacco value chain transformation strategy,” John Bhasera, the agriculture ministry permanent secretary, tells The Africa Report.

Zimbabwe is looking to turn tobacco farming into a $5bn industry by 2025 with this initiative, using raw tobacco as a cut rag and cigarette production, increasing cigarette exports by 2025.

The tobacco record-breaking output is attributed to good agroeconomic practices, Bhasera says.

“We had a good season characterised by sufficient rain, improved leaf quality, and the average yield per hectare increased,” he says.

“Farmers reduced harvest and post-harvest losses by implementing the strategies that we introduced this season, which include barn door grading and natural air curing systems.”

There is an increased interest in tobacco farming because it is the only crop that gives cash immediately, says George Seremwe, president of the Tobacco Association of Zimbabwe, which represents the farmers.

“People tried maize and other crops in the previous years and the payment took some time,” he tells The Africa Report.

“Most of our smallholder farmers found that it is the only alternative crop which was paying immediately.”

Tobacco farmers trapped in debt cycle

However, tobacco smallholder farmers suffer under the contract farming system, where companies offer loans and inputs, such as seeds and fertilisers. Farmers are expected to pay back the loans after selling the produce to the same firms and their agencies, some of them told The Africa Report.

The majority of Zimbabwean tobacco farmers are financed by a number of Chinese companies operating under the state-owned China National Tobacco Corporation, the largest cigarette maker in the world.

Statistics indicate that some 95% of the country’s tobacco crop is financed through the contract system.

“I am under contract farming. I like it because I do not have to worry about the input. This enables me to increase production each year,” says Kudakwashe Mutee, a 30-year-old tobacco farmer from Nyazura, which is about 192 kilometres from Harare.

The contractors are usually the ones who set the price with the guidance of a tobacco regulatory body.

“But they are the ones who determine the price. I do not have a say. They will then take their expenses and interests, leaving me with nothing. I am even struggling to pay my own workers.”

There is less profit from the contract farming system, says James Katete, another tobacco farmer from Marondera, just outside Harare.

“If given an option I will end this contract. It is not working for me. The debts are too much,” says Katete, who grew tobacco on a two-hectare piece of land under contract farming.

If the farmers fail to pay their debts, the Chinese contractors take assets, such as livestock as compensation for the money owed.

Even though statistics on the total debt of those working under the contract farming system are hard to come by given the marketing season is still ongoing, the majority are struggling, Seremwe says.

“They are trapped by debt,” he says. “There is not much profit being made.”

China, which buys most of Zimbabwe’s tobacco to feed its huge market, has denied in the past through their embassy in Harare that they are choking farmers in debt.

Chris Mutsvangwa, of the ruling Zimbabwe African National Union-Patriotic Front, recently touted China’s involvement in the agricultural sector at a forum in the Asian country saying they have helped rebound his country’s tobacco farming through their support.

Contractors must engage with a measure of fairness, says Paul Zakariya, executive director of the Zimbabwe Farmers Union.

“Over-priced inputs erode profit margins on the part of producers. Smallholder producers who do not have the capacity to scale up, are perennially not profitable. This, and other logistical challenges, constrain producers,” he says.

There is a lack of enforcement of laws that protect farmers, Seremwe says.

“The laws protecting the farmers [from debtors] are there, but there is reluctance. Though [this] year there was an improvement; we are appealing to the authorities to enforce these laws,” he says.

TIMB is in the process of reviewing the contractors compliance framework, Bhasera says. “This ensures growers get enough inputs, and it also controls the interest rates contractors charge.”

Zakariya says as a farming organisation, they call for efforts to be put in place to finance tobacco production locally, which the government is considering.

“Local finance will ensure that producers access inputs and other production requirements at fair prices. This will also enhance value addition locally,” he says.

In the next farming season, the government has committed to advance $60m to farmers under a plan targeted at increasing local funding of the crop’s production from the current 5% to 70% by 2025.

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