A coalition of five Southern African countries met recently in Malawi to discuss ways to address the growing global anti-tobacco lobby which is imposing tighter regulations and heavy taxes on the golden leaf, a major source of export earnings for the countries.
The countries calling themselves – ‘T5’ – a grouping of tobacco industry stakeholders from Malawi, Mozambique, Tanzania, Zambia, and Zimbabwe gathered in the Malawian capital, Lilongwe, to share experiences and explore strategies to save this strategic industry which is increasingly coming under threat.
“Delegates from these countries are meeting here in Malawi to discuss some of the challenges facing the leaf tobacco sector and to collectively find a way to address them in the most satisfactory way,” Kondwani Nankhumwa, Malawi’s minister of agriculture was quoted saying in the media.
“No-one forces people to smoke, as no-one forces farmers to grow tobacco. We need a plan of action. Sharing information is important to take the right decisions.”
Most of the countries under the T5 coalition are increasingly finding it difficult to battle the anti-lobby campaign which are calling for the imposition of tighter regulations and heavy taxes on their tobacco industries – which are a major source of foreign currency and major employer.
Anti-tobacco regulations are tightening over public-place smoking, point-of-sale communication and display, graphic health warnings and plain packaging among other restrictions.
The tobacco industry is a complex web with various competing interest of both African and global multinational corporations. Multinationals still earn billions from tobacco produced by African countries.
“Government would continue informing and civic educating the consumer on the dangers of tobacco and its products thereby giving them the freedom of informed choice,” said Nankhumwa.
“However, we will also be promoting tobacco production and protecting it from the negative effects of unbalanced and poorly informed tobacco control legislation adopted by countries which import our tobacco.
“We are therefore here to discuss some of the challenges facing the leaf tobacco sector and to collectively find a way to address them in the most satisfactory way. Sharing information is important to take the right decisions.”
He said cooperation among members of the T5 coalition was vital.
“This cooperation among our governments gives us all the chance to exchange our opinions on how to address several challenges of the tobacco sector, and also to be heard more than if we spoke alone,” the Malawian minister said.
“We have seen many good results of our efforts. Finding time to discuss among each other and to be fully informed of the challenges ahead of us is not easy but we can make it, and we have made it.”
Despite a drought that ravaged Zimbabwe in the 2018/19 cropping season, the country still managed to produce a record-breaking tobacco output, reaching an all time high of 258 million tonnes.
This year’s output is higher than the previous record of 252.5 million kilograms recorded in the 2017/18 farming season.
Tobacco is a major cash-cow for Zimbabwe and it generates an average US$1 billion annually helping the country to import fuel, pharmaceuticals and other key industrial raw materials.
Burley leaf from Malawi makes up 6.6 percent of the world’s tobacco exports and accounts for over 70 percent of Malawi’s foreign earnings.
Tobacco sales generate US$165 million per year for Malawi, with tobacco making up 53 percent of the country’s exports.
Last year, Zambia produced 31 million kilograms of tobacco while production of tobacco declined from 105 million kilograms in the 2013/2014 period to less 50,5 million kilograms in 2017/2018 owing largely to low demand of the commodity in international markets following anti-tobacco global campaigns.
Mozambique produces nearly 100 000 metric tons of tobacco a year. Tobacco growing makes up a small fraction of agriculture in Mozambique, with only 0,15% of agricultural land devoted to tobacco cultivation.
China is a major buyer of tobacco produced in these five countries which are aiming to boost tobacco production in the short-term despite the intensity of the anti-tobacco lobby campaigns.
The World Health Organisation (WHO) has been spearheading the anti-tobacco lobby estimating that smoking tobacco kills about 6 million people around the world every year.
It argues that the tobacco industry is a major obstacle in the global drive to stop people dying early from cancer and heart diseases.
But despite the intense anti-tobacco campaigns over the last few decades, the tobacco industry continues to survive almost unabated, surviving wave after wave of public legislation, from plain packaging to increased taxation.
“Everyone can make the choices which are the most appropriate for themselves,” said Nankhumwa.
“As a government of Malawi, we will continue promoting tobacco production and protecting it from the negative effects of unbalanced and poorly informed tobacco control legislation adopted by countries which import our tobacco.”
Herald
October 06, 2019
Southern African Countries Battle To Save Tobacco Industry
July 30, 2019
Zimbabwe: 2019 Tobacco Seed Sales Drop 55%
Tobacco seed sales have plummeted 55,2% as Zimbabwean farmers grapple with viability challenges ahead of the 2019/2020 season.
As of July 22, 2019 only 320 kilogrammes had been bought by farmers against 715 kilogrammes purchased during the same period last year.
These seedbeds should have been planted in June, but many growers were not in a good enough financial position to start the process. So, more bad news might be on the way We sincerely hope seed sales and farmers crop preparations improve in the next month,” Zimbabwe Tobacco Association chief executive Rodney Ambrose said.
While farmers were entitled to 50% retention of foreign currency ... the process of withdrawing the hard currency was poorly communicated to them and as a result they resorted to the less valued local currency.
The 50% hard currency tobacco retention is an important income in making tobacco farming viable and re-tooling for the next season.
Poor prices have also posed serious viability challenges for the over 200 000 farmers who grew the crop this season.
Tobacco selling, which commenced in March, is heading towards the end with deliveries now at one million kilogrammes per day from 10 million at the peak of the season in June.
The tobacco crop is a top forex earner and plays a key role in funding the importation of key commodities into the country.
While the season was affected by poor weather, at least 235 million kilogrammes has been delivered so far surpassing the target of 220 million kilogrammes. However, it is well below last year’s output of 253 million kilogrammes, which earned the country about US$1 billion.
Full article...
June 23, 2019
Tobacco Prices Go Up In Smoke In Zimbabwe
A sudden drop in the price of tobacco could not have come at a worse time for Zimbabwe. Halfway through the selling season, the price is about 37% lower than in 2018 — at a time when, on its current trajectory, inflation could hit 100% by year-end.
It’s a blow for a country already in dire economic straits. Tobacco is a leading foreign currency earner. It accounted for nearly a fifth of Zimbabwe’s $5.3bn export earnings in 2018, bringing in almost $1bn.
It’s also a large employer: there were about 172,000 growers this year — up from 111,000 for last year’s bumper season — but only about 2,000 grow more than 2ha.
The average price at last count was $1.82/kg, against $2.87/kg a year ago, with little wriggle room. Insiders predict that, at the outside, it could rise by US20c.
The situation will put the screws on producers already under strain. According to tobacco expert and opposition MP Rusty Markham, tobacco is an expensive crop, costing about $12,000/ha to farm.
In the wake of the post-2000 land invasions, the state’s land bank collapsed. Then, as a result of the nationalisation of agricultural land in 2005, commercial banks withdrew from the tobacco market, citing a lack of security to cover loans.
It means that about 80% of tobacco operations are financed in US dollars — mainly from tobacco contractors and merchants in the US, UK and Zimbabwe. Farmers, large and small, are paid in real-time gross settlement dollars (RTGS$) — but they have to repay their funders in US currency, at a crippling rate of about RTGS$5.7/$1. Though they can later claim 50% of their earnings back in US dollars, that process has not always proved easy.
Industry insiders, including Markham, predict the low price will leave top growers in debt. "They will not cover costs — and will therefore not be able to pay back all the money they borrowed from contractors to grow their crop. The [exchange] rate will also hit them hard," he says.
Those in the know doubt that defaulting growers will be closed down ahead of the planting season, as the tobacco merchants and contractors need to ensure continuity of flavour and quality in their products. But there must surely be a limit to that patience.
But part of the problem is the contractors/merchants themselves. The auction system no longer works for the large growers, who produce about 80% of the crop. So they are beholden to merchants — China’s Tian Ze, British American Tobacco through Northern Tobacco, and several other local and international buyers — and the prices they dictate.
t’s unclear what exactly is pushing the price down, but industry speculation points to the US-China trade war, a glut of Zimbabwe’s main flavours on the market, contractors punishing the government for paying growers in RTGS$, and fewer people smoking, including in Asia, the primary export market.
The potential fallout of the price drop does not seem to have sunk in yet. Some speculate that this is because of the glut of other bad news, including electricity load-shedding — 10 hours a day — which will continue at least until the end of the year.
But until the country’s currency woes are resolved, it’s unlikely that the bad news cycle will be arrested.
BusinessLive
June 20, 2019
Bleak Future For Zimbabwe's Tobacco Farming Sector
by Mthandadzo Nyoni
The future of tobacco farming in Zimbabwe is bleak due to viability challenges, and farmers are calling for an emergency meeting with the regulatory body and government to solve the issues affecting them.
Tobacco, which is Zimbabwe’s second-biggest foreign currency earner after mining, is currently under siege as producers are not given full value for their golden leaf.
Farmers who invested foreign currency to produce the best crop are their counting losses after the Reserve Bank of Zimbabwe (RBZ) told them that they were only allowed to retain 50% of their earnings in forex, with the rest paid in a rapidly depreciating local currency..
Farmers needed to retain 100% of their proceeds in order to be able to improve productivity, but the central bank spurned them.
To make matters worse, the Tobacco Industry Marketing Board (TIMB) recently hiked floor-clearing charges, weighing and auction fees, further eating into the earnings of farmers already hard-pressed by depressed prices this season.
In its June 13 report, the Zimbabwe Tobacco Association (ZTA) said the 2018/19 marketing season had been the most challenging ever for many farmers and early indications were that tobacco production and USD earnings from tobacco would decline this season, unless there was urgent intervention to save the industry that directly employs close to half a million people with two million dependants downstream.
“Many farmers have been unable to clear their US dollar debts and will exit the once attractive industry. Tobacco will, more worryingly, also become a lesser of an important key foreign currency earner, social and employment contributor to the economy,” the report reads in part.
ZTA said high selling charges both on auction and contract floors were a major concern to all farmers as it impacted on viability.
Selling charges vary from US$7,50 to US$9 per bale, settled at the prevailing day’s rate of exchange.
“Just recently, auction floor charges were raised by over 60%, yet farmers’ real returns are on a decline. Farmers already incur other high marketing charges and levies,” the report reads.
On 50% forex retention, ZTA said as the entitlement was based on a farmer first clearing his US$ loans, and in a season with depressed US$ prices against high US$ seasonal borrowings, very few farmers have been in a position to benefit from the retention to date.
“Farmers also need to have generated sufficient RTGS$ (local currency) income from their sales to buy back their entitlement, which again has further reduced the number of farmers benefiting. The process of crediting farmers’ tobacco FCAs with their entitlements is slow,” it said.
“Many farmers are therefore trying to retool, using RTGS$ revenues generated at official exchange rates, at inputs being priced at close to parallel rates, which is an almost impossible task to accomplish.”
“There are minimal surpluses being generated and coupled with the high inflation environment, farmers will have little income once completing their tobacco sales to sustain themselves,” ZTA said.
Last year, tobacco farmers delivered 252 million kg, an all-time record, raking in US$892 million.
Zimbabwe Commercial Farmers’ Union director Jeremiah Tevera said farmers were counting their loses and some could scale down their production or pull out from tobacco farming altogether.
“Tobacco farmers are losing out. Quite a number would be making a decision whether to go for it next season or not. All production has been compromised by this environment,” he said.
ZTA said prices on the auction floors had remained fairly static throughout the season at US$1,65/kg, although a price ceiling of US$4,99/kg has been maintained on the floor there has been very little tobacco that has attained this pricing as compared to previous years.
In recent days, ZTA said there had been an improvement in prices, though daily volumes were declining. On contract floors, after a significant weakening of prices to well under US$2 per kg, there has been a welcome improvement, with daily averages above US$2 per kg, as higher quality leaf grades of commercial tobacco come onto the market and firmer prices are being paid for some lower leaf styles.
However, with close to 70% of the national crop sold, this recent improvement in prices has come too late.
As at June 12 2019, ZTA said 171,2 million kilogrammes at an average price of $1,87/kg had been sold after 57 days of trade, a decrease of 11,1 % in volume and a significant 36% decrease in seasonal average price.
Seasonal auction price was down 41%, while seasonal contract price was down 36% when compared to 2018. Auction volumes remained on a decline, accounting for just 13% of the total volume sold to date.
Daily volumes during the month increased significantly with close to 80 million kg sold in the month of May 2019. Daily deliveries in the month of June have dropped on certain days as a large number of small-scale farmers start completing their sales.
It is estimated that by the end of June, close to 190 million kg should have been sold and with farmers estimated to complete sales in mid-August, the national crop size could reach plus or minus 230 million kg.
Tobacco export earnings have been growing over the years from $772,6 million in 2014, rising to $855 million in 2015.
In 2017, tobacco accounted for a quarter of Zimbabwe’s $3,8 billion export earnings. It is also one of the largest employers in the country, where formal employment is scarce, but workers in the sector are classified as working poor.
TIMB is projecting tobacco output of over 260 million kg from 252 million kg obtained last year.
Full article...
June 12, 2019
Energy Efficient Tobacco Curing Barn Introduced In Zimbabwe
...uses coal, leading to hopes that tobacco farmers will rely less on the use of firewood for tobacco curing, which has caused a massive increase in deforestation in recent years.
Whether small scale tobacco farmers will find purchased coal cheaper than 'free' firewood remains to be seen.
Article...
August 02, 2015
'Malawi will not feel guilty for growing tobacco,' says president
Tobacco is Malawi's main cash export crop (contributing 60% of foreign exchange earnings), although the sector's fortunes have waxed and waned over the years. Production for the 2014/15 season was 181 million kilograms, down from the previous year's 191 million kg. Prices for the various types of tobacco on the auction and contract-farming systems ranged from as low as 25 U.S. cents to $4/kg, depending on cultivation as well as curing quality.
What about the world's growing anti-smoking efforts? Should not a small economy that is disproportionately dependent on tobacco be seeking to move way from it? What about the issue of being so steeped in a product with now almost universally accepted as being harmful to human health?
These are provocative, fighting questions to President Peter Mutharika. "We are not forcing them to smoke, we are just growing tobacco so we don't have to feel guilty," he said. 'The market is going to go down, no doubt about it; but somebody is
always going to smoke, whether it is in Vietnam or China or Taiwan."
It is said that 'Malawi's draft economic growth strategy proposes a diversified
agricultural sector, where tobacco will be replaced by crops like cotton
and cassava.' This should be cause for deep worry. Cotton is a dying, increasing unviable crop/sector for countries like Malawi, and cassava is very far from being a crop with any near-term potential to be a substitute for the export revenue that tobacco for now can still provide.
In other words, there is no post-tobacco plan in place at all! The crisis of a pretty much one-commodity economy (which commodity is being demonised in much of the world) can be dealt with at some time in the future-why stress over it now?! Besides, with any luck that will be a problem for some successor long after the current president's tenure to deal with.
African Agriculture
October 16, 2012
Japanese tobacco company to source from Zambian farmers
Japan Tobacco Inc. has signed a contract to source the leaf from 7,000 Zambian farmers. The company has had a presence as a buyer of Zambian tobacco for some years.
Zambia Daily Mail
October 07, 2012
Tobacco growers worried about growing anti-smoking efforts
A representative of African tobacco growers gives his reasons for opposing the World Health Organisation’s Framework Convention on Tobacco Control (FCTC).
Francois van der Merwe is the Chairman of the Africa region of the International Tobacco Growers Association (ITGA). He argues that WHO's plans will:
* threaten more than 30 million jobs worldwide.
* drive tobacco growers out of business without offering economically viable alternative crops.
van der Merwe argues that:
* restricting the periods during which tobacco can be grown will not protect the environment and ensure food security and is impractical.
* many tobacco growing areas are not suitable for the cultivation of food crops
van der Merwe also points out that the FCTC's plans for signatory countries to stop financial and technical support to their tobacco sectors does not guarantee success for anti-smoking efforts because some tobacco-growing countries (e.g. the U.S.) did not sign up to the convention.
African Agriculture
September 19, 2012
Zimbabwe tobacco forecast good, but still shy of record
Zimbabwe's agriculture in general continues to struggle to recover under the vastly changed farming and overall economic environment brought in by radical, controversial land reform that began in 2000. But tobacco is the clear bright spot in the post-land reform picture.
Tobacco cultivation is now in the hands of tens of thousands of mostly small to medium scale black farmers, rather than a smaller number of white large-scale farmers as before. Chinese buyers are significantly more active at the tobacco auctions, although western buyers still play an important role.
In order to be able to take their crop to the handful of auction companies, tobacco growers have to register their intention to cultivate the crop before the start of each season. This requirement makes it possible for the Tobacco Industry Marketing Board to have fairly precise figures of cultivation patterns and possible yields long before harvest.
According to The Herald newspaper, the TIMB says 8,000+kg of tobacco seed have been sold to farmers up to early September, 24% more than the 6,500kg sold during the same period in 2011. 46,431 farmers have registered to grow tobacco during the upcoming
2012/13 season, compared to 19,975 for the same period last year.
The registration cut-off date is October 30, so the numbers could still increase significantly.
The just-ended 2011/12 tobacco marketing season saw 144 million kg of tobacco being sold, a little shy of the target of 150 million kg. Zimbabwe's tobacco record was achieved in 200, when 236 million kg were sold. The worst year was 2008, when hyperinflation and other economic woes were at their worst, and only 48 million kg of tobacco was sold.
Among the attractions of tobacco farming for the many new small-scale farmers who are gravitating towards it are a guaranteed international market that comes to Zimbabwe during auction season, and instant cash payments in hard currency.
African Agriculture
June 13, 2012
The awkwardness of defending tobacco farming
World No Tobacco Day 2012 was on May 31. This year the World Health Organization focused on efforts by the tobacco industry to undermine efforts 'to expose and counter the tobacco industry's brazen and increasingly aggressive attempts to undermine the WHO Framework Convention on Tobacco Control (WHO FCTC) because of the serious danger they pose to public health.'
The FCTC includes recommendations for governments to limit where tobacco can be grown as a step to its eventual elimination, and to do away with tobacco marketing boards.
With tobacco-related health awareness campaigns increasing in many developed countries, both tobacco marketing and consumption, along with the increased health problems, are shifting to many of the developing countries where tobacco is grown. The small scale farmers who dominate tobacco cultivation are part of the same socio-economic group that suffers most from the harmful effects of tobacco consumption.
It is therefore understandable but extremely awkward that groups of small scale tobacco producers who depend on the crop for their livelihoods must oppose the public health efforts of the WHO FCTC.
Tobacco growing is an important part of the economy in countries like Malawi, Tanzania and Zimbabwe. It accounts for a significant source of foreign currency earnings, and has the advantage of being a usually fairly lucrative international cash crop which is accessible to small scale producers. So despite whatever harmful human health effects tobacco smoking accounts for, in important growing countries there is a subset of people who bear the brunt of these effects who nevertheless also depend on tobacco cultivation for their livelihoods.
A May 29 meeting in Lusaka, Zambia of the International Tobacco Growers Association (ITGA) complained that the WHO FCTC was 'putting farmers’ livelihoods at risk while failing to offer an economically viable alternative crop.'
To which a reasonable response might be that tobacco consumption puts the health and lives of many more people at risk than the hardships that tobacco growers and dependent economies would suffer from the reduction of its cultivation. And while it is within the mandate of the WHO to highlight the harmful effects of tobacco, it is not its business to find a 'viable alternative' crop for tobacco farmers.
Tobacco will probably continue to be viable, lucrative crop for growers for some time to come yet. And as long as it remains a legal substance to consume, whatever the health effects, the ITGA has a valid point in arguing that it should be the market that should determine whether it makes sense for farmers to grow it or not, rather than government bans.
But the writing is on the wall for tobacco farmers, and they would be wise to begin to diversifying into less controversial crops.
African Agriculture
February 19, 2012
Zimbabwe 2012 tobacco auction starts: good prices, more women farmers involved
Zimbabwe’s 2012 tobacco auction season began on February 15, with starting prices higher than those of 2011, and with more women farmers taking part.
Media reports said prices of flue-cured Virginia tobacco ranged from $1.70 to $4.77 a kilogramme, depending on quality. Most of the crop was old for between $3.25 and $4.55 a kg, compared to $3.50 to $4.50. The seasonal average price for 2011 was $2.75 a kg.
“It is rare to see such prices on the opening day as farmers try the market with poor
quality crop,” said an official of one of the four licensed auction companies. “We are expecting higher prices as the season continues.” He said his company had 1 600 bales of tobacco booked for sale for the opening day of the seasonal auction, compared to the 2011 figure of 500.
Although the starting prices look promising, there was some grumbling from farmers who said the prices they were offered for their crop did not cover their high production costs.
“Input costs, labor costs and the general management of tobacco demands that we get paid a price above US$5 per kg,” one farmer said.
An official of a farmers’ group said, “The quality this year is good but the price is questionable. We cannot say it’s a good price for such good grades; maybe it’s a fair price. It’s not exciting, it’s not encouraging; we expected prices above US$5 per kg.”
Industry insiders who the starting prices good instead encourage farmers to work on cultivation and post-harvest management to ensure their crop fetches prices in the higher ranges.
Flood and drought -caused production shortfalls in major growers Brazil and the US are expected to benefit farmers in firmer prices. Global market leader Brazil produced 750 million kg of tobacco in 2011, a figure predicted to go down by as much as 150 million kg in 2012. The US produces between 200 million and 300 million kg per year.
Zimbabwe is the world's sixth largest exporter of flue-cured Virginia tobacco after Brazil, India, the United States, Argentina and Tanzania.
Zimbabwe has also had a late starting and initially erratic rain season, but some tobacco sector insiders were still predicting a season total of 150 million kg. The output of 132 million kg for 2011 was almost double the pre-auction season estimate of 77 million kg.
11,000 hectares had been planted under irrigation by November 2011, compared to 13,000 the year before (out of a total of 65,000 hectares for tobacco). Late plantings by farmers waiting for rains which came late in the year could close the planting figures gap between the two years.
Zimbabwe’s best tobacco year to date was in 2000, just before the land reform process started, when 236 million kg were auctioned. The worst year was 2009, when only 59 million kg found their way to the auction markets.
The profile of Zimbabwe’s tobacco sector has changed significantly in recent years. Most of it was previously grown by large scale white farmers, who numbered about 4,000 until a decade ago, but are now thought to number less than 500 after the country’s decade old land reform drive. It is now mostly grown by black small scale farmers. The head of one auction company said 66,000 small scale farmers had registered as growers this season, with the Tobacco Industry Marketing Board (TIMB), compared to 52,000 in 2011.
Whereas buyers in previous years were mostly Western, Chinese buyers have recently become a major force. Some are also involved in financing farmers. More black-owned auction companies have been established in recent years to replace or join the sector’s once exclusively white-owned companies. The flood of new farmers to tobacco growing has in recent years found the auction companies struggling to cope with the numbers.
Another noticeable change in the tobacco sector in recent years has been the participation of many more women farmers.
African Agriculture
February 14, 2012
Gene-modified tobacco may give you lung cancer, but will fight off malaria
In what appears to be serious news, Xinhua news agency has reported that scientists at Israel’s Hebrew University of Jerusalem have developed genetically altered tobacco plants which contain artemensin, a natural compound that is increasingly used in drug-resistant malaria therapy.
Artemensin comes from the sweet wormwood plant but due to its small quantities and high price, millions of people cannot get access to it.
Although cigarettes are known to kill millions of people every year, Professor Alexander Vainstein and his research team spliced the wormwood enzymes that carry artemensin’s genetic code into tobacco plants, which then produced the drug.
Vainstein's development is being marketed through the Hebrew University's Yissum Research Development Company.
"The technology provides, for the first time, the opportunity for manufacturing affordable artemensin by using tobacco plants," said Yissum CEO Yaacov Michlin.
Approximately half a billion people suffer from malaria each year in Africa and East Asia, with a child dying every 30 seconds of this disease. Most of them have no means to purchase medicines to treat the illness.
This will present interesting new scenarios for major tobacco growing countries like Malawi and Zimbabwe. Malaria drug manufacturers may now bid for tobacco at the countries’ tobacco auctions alongside cigarette makers. Perhaps this will firm tobacco prices, which in some cases low in Malawi in 2011.. The low prices made many Malawian farmers abandon cultivation of the country’s main cash crop for other crops in 2012. Industry sources say Malawi’s 2012 tobacco harvest may be as low as half of that of 2011 as a result.
Will the artemensin in tobacco be smoke-able in its malaria-fighting properties, or will it have to be extracted? If the former, people now have the new, bizarre ‘lifestyle choice’ of dying from tobacco smoking-induced lung cancer, but at least being cured of their malaria before that. Health professionals who have always thought of tobacco as a killer may now have to wrap their brains to thinking about it as a lifesaver as well.
It’s almost stranger than fiction.
African Agriculture
February 12, 2012
Poor rain, access to inputs and finance may slow Zimbabwe agriculture recovery in 2012
February 09, 2012
Africa’s mixed tobacco fortunes
Several African countries grow tobacco in low quantities. A few are large producers for whom the crop is an important part of agriculture and the economy. Yet it is a product that most African countries make at least half-hearted attempts to discourage their citizens from using, on health grounds.
Recent tobacco-related developments in three countries, Malawi, Senegal and Zimbabwe, show the contradictions Africa faces over a lucrative export crop that is also a known human health hazard.
Senegal is not a grower of tobacco, but up to one in three adults and 20% of young people are said to be smokers. Except for warning signs on cigarette packs and advertising, there are no high profile anti-smoking campaigns as in some countries. However, there was uproar in December 2011 when major cigarette company Philip Morris International slashed the price of its Marlboro products in what it says was a move to be competitive with other brands on the market. The price of a pack of 20 went from about US$1.25 to about 80cents. The same packet is said to cost more than $7 in some markets in Europe, and to average $6 in the US.
The response was immediate and widespread. If smoking is mostly well tolerated, this was seen as a renewed assault on public health, especially of impressionable young people, who would find it much easier to purchase a leading cigarette brand.
For Malawi, tobacco is a vitally important crop, and accounts for 60% of its exports. The projection by Tobacco Association of Malawi (TAMA) president Reuben Maigwa that this year’s harvest may have to be revised downwards by as much as 50% is therefore a grave matter for the country’s economy. This year’s so far poor rains and last year’s lackluster auction prices are given as the cause of the expected slump.
Previous efforts by the government to set floor prices for tobacco have simply led to international buyers staying away.
TAMA represents 80% of Malawi’s tobacco growers. MalawiToday.com reports that Maigwa said in his tours of traditional tobacco growing areas he had observed much lower cultivation of the crop this year.
MalawiToday.com says the Tobacco Control Commission (TCC) had initially projected tobacco production to reach 160 million kilogram in 2012. A 50% reduction of this figure would represent a huge drop from the 237 million kg total for various tobacco varieties for 2011.
Malawi is already reeling from various economic problems. The Malawi kwacha currency has dropped in value in recent months, sharply raising consumer prices and shortages. Long queues have been experienced for fuel. Frequent and long power cuts have also affected economic activity. Normally peaceful Malawi has in recent months experienced violent demonstrations against the government over economic and political disgruntlement.
A diplomatic spat with former colonial power and major donor Britain caused the latter to withdraw significant aid to Malawi. Among programmes scaled back was the country’s successful agricultural inputs subsidy scheme. It has been credited with making the once famine-prone country produce bumper maize harvests several years in a row. Poor rains during the current cropping season are also expected to cause a slump in the yield of maize, the country’s staple crop.
A 50% reduction in the tobacco crop would only compound Malawi’s economic problems, and possibly lead to more political unrest.
Zimbabwe, Malawi’s neighbor, is also a major producer of tobacco, with 50% of export earnings coming from the crop. The tobacco sector is one of the earliest farming sectors to recover from a now decade-old land reform effort, with production now mostly by small scale farmers instead of large scale commercial farmers. Another recent shift is the increasing role of Chinese companies in supporting farmers and in purchasing the crop.
The country’s best tobacco year was in pre land reform 2000, when 237 million kg of tobacco was auctioned. The lowest year was the 49 million kg of 2008. The years in between saw steadily declining production as the country faced a variety of severe economic and political problems. There has been rapid recovery since then. 60 million kg was sold in 2009, more than doubling to 123 million kg in 2010. Auctioned in 2011 were 132 million kg, according to the Zimbabwe Trade Association. The Tobacco Industry and Marketing Board says the 2012 target is 150 million kg.
Whereas in Malawi low tobacco auction prices are said to be making many farmers shift to growing other crops, in Zimbabwe many farmers are abandoning other crops, including price-controlled maize, to shift to growing tobacco. 2011 auction prices averaged about US$2.70, compared to much less than $2 in Malawi. Poor rains are expected to affect all crop production in 2012, but the different needs of tobacco and maize may mean the country finding itself in the position of a relatively good tobacco harvest and a poor maize harvest.
However, the ‘green gold’ that increasing numbers of Zimbabwean farmers are flocking to growing has been blamed for encouraging deforestation. Few of the small scale farmers have access to standard coal-fired curing barns, and so they cut down trees for use in their tobacco curing.
While the agriculture and finance ministries encourage and welcome the growth of the tobacco sectors, the health and environment ministries must quietly contend with the many ill-effects on human health and the environment. These are just a few of the many contradictions that tobacco growing presents.
African Agriculture
November 25, 2011
Zimbabwe: 11,000 hectares of tobacco put under irrigation
At least 11 000 hectares of irrigable land has so far been put under tobacco for Zimbabwe's current agricultural season, an official said on November 23.
Last season, 52 000 farmers registered to produce tobacco on 65 000 hectares, 13 000 hectares of which was under irrigation. Tobacco Industry and Marketing Board (TIMB) chief executive officer Dr Andrew Matibiri told New Ziana much of the crop would be planted as soon as the country began receiving rains.
"Most of the planting will start this week since the country has begun receiving rains," he said.
The bulk of Zimbabwe's tobacco is grown under rain-fed agriculture.
Tobacco farming has attracted more farmers in the past two years due to the multiple currencies.
Analysts have tipped tobacco production to increase on the back of attractive prices and orderly marketing. Zimbabwe is the world's sixth largest exporter of the flue-cured Virginia tobacco after Brazil, India, the United States, Argentina and Tanzania.
More than 120 million kilogrammes of tobacco were sold last season with the contract system contributing the bulk of the sales.
The country is determined to return to the peak production levels of more than 200 million kg reached in the late 1990s before Western countries imposed economic sanctions which saw most sectors going on a free fall. Last season the industry had projected an output of 77 million kilogrammes to go under the hammer but this was later revised twice, first to 93 million kg and then 114 million kg.
An estimated 250 000 people are directly employed in the production of tobacco.
The Herald
November 04, 2011
Zimbabwe: Small-scale farmers boost tobacco production
by Tabitha Mutenga
Zimbabwe is expected to net over US$500 million in export earnings from the 2010/2011 tobacco crop after initially raking in US$361 million from direct earnings during the marketing season.
Marking the end of the 2010/2011 tobacco season, the Minister of Agriculture, Mechanisation and Irrigation Development Joseph Made said the tobacco crop size had increased by seven percent to 132,4 million kilogrammes, from 123,5 million kg in 2010.
Made said the continued increase in production should be attributed to improved production from small scale farmers who increased output to over 132 million kg this year.
"The contract growing and marketing scheme, which is now about to enter into its eighth successive season, has played an important role in maintaining tobacco production in the country," he said.
At the inception of the dual marketing system, which allowed contract sales to operate concurrently with the auction sales, contract sales accounted for 23 percent of the national crop in 2004, rising to 39 percent in 2005 and to 56 percent this year.
Made called for a pricing and purchasing pattern that ensures growers' viability although this should not create arbitrage opportunities for the two marketing systems of auction and contract.
Tobacco growers have increased from a register of 8 500, growing an average of 10 hectares each to over 66 000 growers, growing an average of 1,3 hectares each, of whom 80 percent are small scale growers.
Speaking at the same occasion, Tobacco Industry and Marketing Board chairperson, Monica Chinamasa, remarked that the just ended tobacco-selling season was characterised by inadequate funding from the financial institutions.
"This has become a perennial problem that militates against rapid recovery of production.
The A2 sector is the most affected by this lack of funding, resulting in this sector accounting for 12 percent of total production, compared to 28 percent for A1, 18 percent communal, 11 percent small scale and 31 percent large scale producers," she said.
Chinamasa said there was need for a concerted effort to train growers to reduce handling losses, which were as high as 21 percent during the just ended season.
Production was also affected by continuous power cuts that increased the cost of production and reduce viability.
Financial Gazette
November 03, 2011
Zimbabwe: Small-scale farmers choose tobacco over maize
Zimbabwe’s small-scale farmers are favouring tobacco over maize because they are paid immediately on delivery, while the Grain Marketing Board (GMB), the state-run cereal distribution monopoly, often takes months to pay for the staple, say some farmers.
The country has suffered consistent bouts of food insecurity since 2000 after President Robert Mugabe’s ZANU-PF implemented its fast track land reform which saw thousands of white farmers displaced, often violently, to make way for landless black Zimbabweans.
Tobacco production - a major foreign currency earner - plummeted from 237 million kg in 2000 to 49 million kilograms in 2008. Production has since recovered and the Zimbabwe Tobacco Association (ZTA) said 132 million kg was auctioned in 2011.
The profile of tobacco farmers has changed in the last decade. Prior to 2000, 1,500 of the then about 4,500 commercial farmers produced 97 percent of the tobacco delivered to sales floors, while other commercial farmers generally shunned maize production because of price controls - which remain - and opted for cash crops such as paprika, cut flowers and cotton, while growing yellow maize for stock feed.
Cereal production for food security before 2000 was largely the domain of small farmers who benefited from the sophisticated agricultural input system which supported commercial farmers and were able to easily source cheap fertiliser and seeds. The disruption of commercial farming activities also saw the collapse of Zimbabwe’s agricultural input industries.
ZTA's chief executive officer, Rodney Ambrose, said 67,000 tobacco growers - resettled on former white farmland - registered in 2011, of which only about 17,000 were considered large growers, including 300 white farmers still active in the sector, and that by and large the quality of tobacco delivered to the auction floors was “very good”.
Samuel Chizemo, a new tobacco farmer in Karoi about 150km north of Harare, said more farmers were opting to grow tobacco in place of maize, because of GMB delays in payment, although some was grown for personal consumption.
“Unlike crops which are delivered to the GMB we get paid cash on delivery (for tobacco),” he said and estimated he earned about US$8,000 from his tobacco crop this year and was paid promptly.
Some farmers, he said, were forced to sell the maize to third parties at a lower price than the controlled price of US$285 a ton, so it was the middlemen that profited from the grain, who could afford to wait for payment from the marketing board.
The USAID-funded Famine Early Warning Systems Network (FEWS NET) said in its September 2011 factsheet that about 1.68 million people would require emergency food assistance during the lean season, from January to April 2012. This was a 12 percent decline from the previous year for the same period.
Chizemo is one of 36 small-scale farmers working six hectare divisions of formerly white-owned farmland which was redistributed in 2001. They are all cultivating tobacco as contract farmers.
This year the average price of tobacco per kg was $2.73, slightly lower than the previous year of US$2.89.
Initially, Zimbabwe’s hyperinflationary environment - which was effectively ended through the scrapping of the local currency and its replacement in 2009 with the US dollar, Botswana pula and South African rand - financial difficulties, and the farmers’ inexperience of growing and curing tobacco hamstrung their first attempts in 2003.
“Besides us not having the know-how, it is a very expensive crop to grow,” Chizemo said.
Irrigation systems were also removed by the evicted farmer, which limited the area under cultivation, as the new farmers had to carry drums of water from a nearby river to ensure the crops did not wither in the early stages.
The refusal of banks to grant loans to the new farmers because of concerns over the security of land ownership saw the Tobacco Industry and Marketing Board (TIMB) petition President Robert Mugabe’s ZANU-PF government in 2004 to permit tobacco companies to offer farmers contracts whereby the necessary inputs, such as fertilizer and chemicals, were provided ahead of the planting season.
Under the contract agreement the farmers must sell to an agreed auctioneer until they have paid the loan for the inputs and are then free to sell the surplus to whoever they choose.
New farmers were also offered advice, assisted in the paying of wage bills and in some cases supplied with food.
However, it was the scrapping of the local currency, which saw tobacco’s renaissance.
The farmers also lack access to a curing facility.
“The farmer who took over the farm infrastructure does not allow us to use the [curing] barn as he says it’s on his land,” he told IRIN. “He is a cellphone farmer,” a term describing new farmers who received land, but are employed elsewhere and conduct their farming activities by calling their workers on cellphones.
Gwata and his fellow small-scale farmers built their own curing barn, but it was not as efficient as the barn constructed by the former white farmer.
Without a coal supplier the tobacco farmers have resorted to tree-felling to get fuel for tobacco curing. “This is causing serious deforestation but we really do not have a choice,” he said.
“We have the land but we are not benefiting enough; agriculture is the driver of our economy so government should seriously look into putting money into the sector,” said Gwata. That may not happen any time soon though as the government remains cash-strapped.
TIMB chief executive officer Andrew Matibiri said the new farmers had also yet to come to grips with the tobacco industry systems, including notification of how much of the product they intended to grow.
“Some farmers are not aware of this and just bring their crop to the already overcrowded three auction floors in Harare which were designed for 4,000 growers,” he said.
However, Matibiri said the sector was being rejuvenated. “Besides earning the country much needed foreign currency, tobacco is now benefiting thousands of families rather than the small minority who grew it before.”
He forecast that tobacco production could grow to 350 million kg annually in three to four years - provided there was adequate financial support - thanks to demand from the European Union and China, which each purchase about 40 percent of the country’s tobacco crop.
IRIN
October 08, 2011
Zimbabwe maize production in four-fold increase since 2008, tobacco five-fold
Zimbabwe's finance minister Tendai Biti, speaking in parliament in answer to questions about government support for maize farmers, said, "In 2008 the maize production was 400 000 metric tonnes but in 2011 the production of maize stands at 1,5 million metric tonnes. It could have been 1,7 million metric tonnes but because of the drought between December 2010 and January 2011 we lost 11 percent of hectarage.''
"The second crop is tobacco. In 2008 we produced 34 million kg and in 2011 our expected delivery will be 174 million kg and as I stand here 134 million kg have been delivered. In fact, with all the crops and livestock in Zimbabwe there has been a fundamental increase in production between 2008 and 2011 with the exception of two crops, tea and coffee. Even milk has risen to 94 million litres although this is still below the over 200 million that we need," he said.
Zimbabwe, he added, was set to meet its target of 500 000 tonnes of strategic grain reserves due to increased deliveries to GMB.
Minister Biti said Government had spent US$1,9 billion on agriculture since 2008, adding that they are also crafting an input scheme for vulnerable groups and large scale and A2 farmers this farming season.
Government had released US$10 million to pay farmers that have delivered grain but part of the money they are owed would be offset by inputs.
"What we have done is that we are gathering inputs to the tune of US$30 million and a farmer can liquidate his indebtedness with seed and fertiliser. But we will be able to pay any cent we owe by December 31 in the year of our Lord 2011," he said.
Minister Biti, however, took a swipe at the GMB for having a large salary bill that is chewing upUS$10 million a month. The parastatal would soon be unbundled into two companies dealing with collection of the strategic grain reserve and the other commercial activities.
Minister Biti, however, said the long term solution to ensure that farmers are paid on time was to have a commodity exchange.
The Herald
October 03, 2011
Zimbabwe: tobacco season's final 200,000kg auctioned
by Victoria Mtomba
Two hundred thousand kilogrammes of flue-cured tobacco were sold during mop-up sales last week, Zimbabwe's Tobacco Industry Marketing Board (TIMB) said.
The final sales brought the total of tobacco sold so far to 132,3 million kg at an average price of $2,73 per kg.
In a weekly bulletin for the 32nd week of the selling season TIMB said a 7,69% change was recorded compared to the previous year same period where 122,9 million kg were sold at an average price of $2,85 per kg.
TIMB indicated that two more contractors were yet to conduct their final purchases before the close of the 2011 buying season.
A total of 1 702 036 bales were laid compared to 1 587 034 bales same period last year while 1 582 852 bales were sold this year compared to 1 458 684 in 2010.
During the period under review seasonal exports stood at 88,5 million kg at an average price of $4,83 per kg.
A total of 28 million kg were sold to China while 10,6 million kg and 9,6 million kg of tobacco was sold to South Africa and the United Arab Emirates respectively.
TIMB said besides 18 million kg permit for the import of tobacco being issued only eight million kg had been issued.
At least 260 812kg of burley tobacco were sold compared to 25 640kg last year same period.
A total of 22 865 registered growers participated this year in the tobacco selling season.
Newsday
September 15, 2011
Some U.S. farms switch from tobacco to crops for African immigrants
by April Fulton
For the last 10 years, U.S. farmers in tobacco-growing states have been slowly saying goodbye to that old leaf in favor of other crops.
Of course, there's lots of corn and soy replacing tobacco, but some farms are testing out specialty crops that appeal to recent immigrants.
George Bowling's farm in southern Maryland is one such place. He started growing African vegetables about a year ago, but he has worked on farms growing corn and tobacco for much of his 70-something years.
"I've had the African eggplant, I've had the hot peppers, yellow tomatoes, red tomatoes, okra, and potato leaves, watermelon, cantaloupe," Bowling says, pulling his dusty baseball cap down to shade his eyes.
This year, seven acres of his 60-acre farm were dedicated mainly to new African crops he hadn't planted before — something of an experiment, he says.
Bowling's wife, Julia, says they started researching African crops after some customers asked for sweet potato leaves to cook with. Sweet potato leaves are used like spinach in many cultures, added to a stir fry or an African stew
"We'd never heard of anybody that ate sweet potato leaf, and when we plowed our sweet potatoes last year, that's when they first started coming in," she says.
Customers asked Bowling to plant African produce and said they would come to pick it, she says, so he gave it a shot. He ordered specialty seeds for vegetables like "garden eggs" — tiny green African eggplants — and chocolate habanero peppers, and planted them.
And now many customers come to Bowling's farm, picking 16-pound bags of hot peppers at a time. They load up their cars, drive home, tell their friends and come back for more. It's mostly word-of-mouth marketing.
If you can find these peppers at a specialty market, they are often expensive or dried out, says Gladys Fontem, who is originally from Cameroon. She wears surgical gloves to protect her hands while picking the hot peppers. She comes to pick, she says, because the peppers here are fresh and the farm is clean.
"You can't cook without peppers," says Fontem. "We love that spicy stuff."
But there's another reason they come, according to her sister, Ara: "It gives us a taste of home. The smell, the fields, it's like we're back home."
There's a big market for African crops in the D.C. area. Nearly 120,000 people born in Africa live in the metro area, according to the U.S. Census.
In other parts of the country, the foods of home are different. A recent study by Rutgers showed that the demand for Mexican, Indian, Chinese and Puerto Rican produce is worth more than a billion dollars — on the East Coast alone.
As tobacco taxes have gone up and imported tobacco has flooded the market, many farmers are looking to try new things.
In Maryland, the state gave some farmers an incentive. In 2000, it offered to buy out farmers who grew significant amounts of tobacco if they promised to stop growing tobacco but keep their land in agriculture for 10 years. More than 80 percent took the offer, according to Christine Bergmark of the Southern Maryland Agricultural Development Commission, the agency that administers the tobacco program.
So some farmers are trying out wine grapes, some are giving public farm tours and Halloween hayrides, and some are testing African and other specialty ethnic crops.
African crops are fairly new, but they are not just limited to the ethnic market. Some farmers are even starting to take their products to urban farmers markets and high-end restaurants.
Growing new crops in this climate isn't easy.
Yao Afantcho came to Maryland from Togo about 20 years ago. He missed the taste of home, and brought seeds with him to experiment. He tried peppers and melons, and more exotic things like edible hibiscus and jute leaves. Turns out they grow fairly well, but they take some adjustments.
"We have few problems. We have a weather problem. This is a temperate zone and so the growing period is shorter," he says.
Eventually, the University of Maryland hired him to help set up a program that would educate farmers about how to grow the crops and find markets. He still works with several Maryland farmers, as well as with city garden farmers through the University of the District of Columbia.
But farming is not easy work, no matter what is growing. With the hot, rainless July and the downpours of August, it's been tough, says farmer Bowling. He lost a field full of cantaloupe.
"A total loss almost," he says, pointing to the withered vines. "But that's farming."
Still, Bowling doesn't miss tobacco. Even though he says he's retired, he puts in 15-hour days now. I ask him if he makes any money.
"I probably got a net return of a dollar an hour now... this is a lot of hard work and kind of a minimal return," he says.
So, why do it?
"I just love dealing with people," he says.
He also loves the farm, and this area — Charles County — where he grew up.
"We've got it all, we've got mountains in the back, [the Chesapeake] Bay on the East, Potomac River there, I can go to the bay and fish and crab, I mean, what else could you want?"
NPR
