Zimbabwe, Africa's largest tobacco producer, opened its tobacco-selling season Wednesday, with a speech by the vice president and eager international buyers.
The size of the tobacco crop increased despite increased fertilizer prices caused by the war in Ukraine. Zimbabwe expects to harvest 230 million kilograms (254,000 tons) of the golden leaf this season, up from 212 million kilograms (234,000 tons) last year, officials said at the official opening.
The southern African country now wants to make its tobacco industry more lucrative by manufacturing more cigarettes at home and limiting foreign funding of farmers. Currently, China funds the bulk of production and buys the lion's share of Zimbabwe’s tobacco.
The war in Ukraine affected Zimbabwe's tobacco farmers “quite badly because it happened at the time when we were planting our crop, so we did pay more for fertilizer than we should have,” said Patrick Devenish, chairman of the regulatory body, the Tobacco Industry Marketing Board.
He attributed the spike in production to more growers taking up the crop, from about 123,000 farmers last season to about 150,000 this season. Land where tobacco was grown increased to 118,000 hectares (about 292,000 acres) from about 110,000 hectares (272,000 acres) last season, he said.
Tobacco is on a rebound in this southern African nation where production plummeted from a high of about 240 million kilograms (265,000 tons) in 1998, according to government figures, to less than 50 million kilograms (60,000 tons) a decade later following the eviction of several thousand white farmers who accounted for the majority of growers.
In recent years Zimbabwe has rapidly increased the size of its crop, regaining its spot as one of the world’s top five exporters of tobacco, peaking at 261 million kilograms (288,000 tons) in 2019.
China has been integral to Zimbabwe’s tobacco boom by establishing a grower contract system run by the state-owned China National Tobacco Corporation, the world’s biggest cigarette producer. Under the system, the Chinese firm loans seeds, fertilizers, food, and money for labor and wood to Black farmers who now make up the majority of Zimbabwe's tobacco producers. The farmers, in turn, are obligated to sell their crop to the Chinese firm or its agents. About 95% of Zimbabwe’s crop is financed through the contract system, say officials.
However, the system is bleeding the country as most of the proceeds of the tobacco sales return offshore, they said.
“The problem is that the contractors are unable to borrow money here so they borrow offshore. They bring it in, they advance the inputs to growers. The contractors then buy the crop and then they have to return the money to the offshore bankers," Devenish of the Tobacco Marketing Board told The Associated Press. "We want that money retained in our country so that our country can benefit.”
Vice President Constantino Chiwenga addressed this problem when he spoke at the auction opening.
He said that next season the government will advance $60 million to farmers under a tobacco transformation plan that seeks to improve local funding of the crop from the current 5% to 70% by 2025. By that time the country also hopes to have increased annual harvests to 300 million kilograms (331,000 tons), he said.
Under the same plan, Zimbabwe wants 30% of the crop to be processed, blended and made into cigarettes by 2025 to boost value-added exports, said Chiwenga. Currently, only 2% of the crop is locally processed into cigarettes.
“It is disheartening that we export 98% of our tobacco in semi-processed form, which means we are literally exporting jobs and value,” he said.