Zim: High prices draw farmers to tobacco, but for how long?

High prices and a growing demand for Zimbabwe's tobacco crop on the international stage has led to small-scale farmers ditching food cereals in favour of the cash crop that was once the preserve of a small clique of white commercial farmers.

But agriculture experts warn that the hype around tobacco and the high prices that the crop is fetching might be a bubble that could burst in the short to medium term because of poor crop quality.

Nearly 88 000 tobacco growers have registered to sell their crop this season, a 29% increase from the 65 000 new growers that planted the crop last year.

The Tobacco Industry and Marketing Board estimates that it will sell 180-million kilograms of the crop this year, up from 166-million kilograms last year.

The agriculture sector is expected to grow by 9% this year, with tobacco largely fuelling the growth.

The ministry of agriculture says tobacco earnings contribute about 20% to the country's gross domestic product and the crop accounts for 40% of exports.

Real cash returns for growers
George Nheweyembwa, the director of finance and administration at Boka Tobacco Floors, said that, although tobacco farming is a labour-intensive exercise, the main attraction for small-scale growers is that they do not have to hire extra workers to generate high premiums.

"Over the years we have seen real cash returns for growers and this is what has attracted new growers," said Nheweyembwa.

"Unlike other crops, there is no intervention from external forces in tobacco farming; the market determines prices and the farmers have full confidence in the prices."

The move towards tobacco has dented the farming of staple cereals, especially maize.

Additionally, the debt-ridden Grain Marketing Board is understood to owe farmers nearly $10-million in unpaid maize deliveries from the past farming season.

About two million Zimbabweans are now food insecure, according to the latest Zimbabwe Vulnerability Assessment Committee report.

Money talks
For farmers, it's money that talks. Unlike maize, tobacco farming is well funded by private players, including Chinese firms now engaging in contract farming with local growers.

Rodney Ambrose, chief executive of the Zimbabwe Tobacco Association, said his organisation was addressing the anomaly of cash crops taking precedence over staple crops.

"The shortage of staples is man-made, but as the tobacco industry we are encouraging our farmers to grow other staples such as maize so that we don't have single-crop reliance."

An expert with the tobacco industry association said it would be interesting to see how much longer tobacco prices can hold out, because, although there are a high number of growers, this does not necessarily equate to high-quality crop production.

"Zimbabwe has a reputation for high quality and it must maintain that, otherwise the price bubble will burst sooner than anyone anticipates. As long as the quality remains high, the price will be high," said the official.

Indications of trouble ahead have already begun to show in the early days of the marketing season, with the small-scale farmers in a wrangle over some of the prices offered for their crop as buyers query the quality.

The latest figures from the Tobacco Industry and Marketing Board show that $5-million worth of tobacco has been sold to date at an average price of $2.42/kg.

This is significantly lower than the $6.1-million earned from 1.9-million kg at an average price of $3.25/kg a year earlier.

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