Zimbabwe’s annual auction of tobacco, once the motor of one of Africa’s most vigorous economies, closed on Monday at its lowest volume in nearly 50 years, with even an even gloomier future for the next season’s crop.
Sales on all three auction floors ended with 80,2-million kilogrammes of smoking leaf — less than half last year’s 166-million kilogrammes and a third of the record 236-million kilogrammes sold in 2000.
The Zimbabwe Tobacco Association, which represents growers, is forecasting a crop next year of 60-million kilogrammes, but officials admit it may drop to 40-million.
President Robert Mugabe’s seizures of white-owned farms — a large proportion of which produced tobacco — and the accelerating economic collapse driven by the 79-year-old former guerilla leader’s economic policies are said to be behind the tobacco collapse.
This year’s crop — nearly all of it exported — earned about US$179-million, less than half of what the record bumper crop of 236-million kilogrammes earned in 2000, before Mugabe’s ”revolutionary land reform programme” had taken full effect. Since well before independence in 1980, tobacco has been the country’s most important source of foreign currency.
”Without a significant tobacco industry, there are almost no other sources of foreign currency,” said Harare-based economist Tony Hawkins.
”It means fertilisers, crop chemicals and fuel will be harder than ever to get. We will have to import more and more food. Hard currency will be harder and harder to get on the black market, and the exchange rate will disappear into the stratosphere.”
”The industry is dying,” said David Machingaidze, the managing director of Tobacco Sales Floors. ”We are going into the dark. We don’t know which farmers are going to take the risk of planting a crop.”
”If the (white) commercial sector continues to dwindle significantly without any meaningful growth from the new farmers (who have taken over white-owned land), that is probably the biggest question,” he said.
Commercial farmers, nearly all whites, with generations of experience in growing and curing high grade leaf, accounted for 75% of this year’ crop. The small-scale peasant farmers crop is not only much less, but of low quality.
Even if commercial farmers were left alone to grow, they would face the task of trying to produce in a hyper-inflationary environment, with the annual inflation index at the end of September at 455%.
”Chemicals and fertiliser are not only expensive, but also difficult to find,” Machingaidze said. ”There are serious shortages.”
Last year it cost farmers 1,8-million Zimbabwean dollars to grow a hectare of tobacco. Forecasts by farmers’ unions of 30-million Zimbabwean dollars now are ”not entirely wild”, he said.
The government worsened conditions for growers by pegging the exchange rate at one US dollar to 800 Zimbabwe dollars, as the unofficial ”parallel” rate soared unchecked to about one US dollar to 5 500 Zimbabwe dollars.
Twice in the five-month growing season, peasant growers withdrew their crop from sale in an attempt to force the state to devalue and give them a better price. Their action went unheeded. – Sapa-DPA