Tobacco Crop Reaches Record Prices In Zimbabwe

Zimbabwe Tobacco

Zimbabwe Tobacco

Zimbabwe’s annual tobacco auc­tions this year were notable for record prices and the sec­ond small­est crop in more than 50 years. Thou­sands of new small-scale tobacco farm­ers failed to grow tobacco this sea­son because nei­ther com­mer­cial banks nor the gov­ern­ment had money to lend for inputs such as fer­til­izer. Zimbabwe’s 2009 tobacco crop will earn about $160 mil­lion this sell­ing sea­son. The aver­age price was about $3.60 a kilo­gram. Most tobacco will be exported to Europe with China now also an impor­tant buyer.

About 50 mil­lion kilo­grams was pro­duced, more than 80 per­cent of that grown by the few remain­ing white farm­ers on the tiny por­tions of land left untouched by Pres­i­dent Robert Mugabe’s ongo­ing seizures of white-owned land.

Until land inva­sions began in 2000, large-scale white tobacco grow­ers and grow­ing num­bers of black farm­ers pro­duced more than 220 mil­lion kilo­grams of tobacco each year. This was the bedrock of Zimbabwe’s econ­omy and the country’s largest for­eign cur­rency earner.

Farm inva­sions cause uncer­tainty

This year, as farm seizures were stepped up by those loyal to Pres­i­dent Robert Mugabe in the wake of the for­ma­tion of the unity gov­ern­ment, cash strapped banks refused loans to farm­ers. The banks said the cur­rent wave of farm inva­sions resulted in uncer­tainty about the farm­ers’ tenure on their land, and that the farms or poten­tial har­vests were there­fore no surety for the lenders.

Con­se­quently these farm­ers sold their crops to for­eign buy­ers who fund their inputs, such as fer­til­izer. Andy Fer­reira, out­go­ing pres­i­dent of the Zim­babwe Tobacco Asso­ci­a­tion says it is a pity the econ­omy is so dif­fi­cult, because com­mer­cial farm­ers forced to for­ward sell their crops are get­ting about 20 per­cent less than prices on the auc­tion floors in Harare — the largest in the world.

He said until land tenure was set­tled and banks felt secure to lend money to com­mer­cial farm­ers, this sys­tem would con­tinue, to the detri­ment of Zimbabwe’s for­eign earn­ings.

Nowa­days, only small-scale farm­ers sell at the auc­tion floors, and their num­bers dropped to about 8,000 from 15,000; many who would nor­mally be sell­ing say they were unable to raise loans to buy inputs.

A small-scale pro­ducer in north­ern Zim­babwe, said his out­put was affected this sea­son because he could not bor­row enough money to buy inputs. Ide­ally, he would like to dou­ble his out­put.

“I am at Karoi, Hurungwe, I am an old farmer. Last year it was bet­ter than this year; and last year I [planted] one hectare [and] I pro­duced more [kilo­grams] than this sea­son. I haven’t any inputs,” he said.

Some small-scale farm­ers now grow­ing tobacco were given white-owned land by Pres­i­dent Robert Mugabe.

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