eBusiness Weekly
Business Reporter
TOBACCO contractors or growers involved in side marketing of the crop will be required to compensate three times the loss suffered by any affected financier.
This comes as the Government moves to curb the illegal practice through the new regulations published last week to ensure sanity in and sustainability of tobacco growing in Zimbabwe.
Statutory instrument (SI) 77 of 2022, which details the new regulations, says any person who participates in side marketing of contracted tobacco crops shall also be liable to a fine not exceeding level five or to imprisonment for a maximum of six months or both.
“This serves to notify all stakeholders that the Tobacco Industry and Marketing (Prohibition of Side Marketing) Regulations, 2022 (SI 77 of 2022) (hereinafter titled the Regulations) were published through the Government Gazette of 15 April 2022,” reads an excerpt of the Government gazette issued last week.
Tobacco players say side marketing presents a “huge challenge” to growth of an industry sustaining nearly 150 000 households. They said while the regulations were a welcome development, effective enforcement was critical to curb the practice.
Commenting on the issue the Tobacco Industry and Marketing Board (TIMB) said “We trust that all stakeholders will abide by the new regulations and join TIMB in creating a viable and orderly market.”
Historically, Zimbabwe’s tobacco industry has proved to be strategic in terms of providing livelihoods for many people, both rural and urban.
The crop–also referred to as the “golden leaf” is also key to economic development, contributing about 10 percent to the gross domestic product and one of the most valuable export commodities.
According to the United Nations’ Food and Agriculture Organisation (FAO), tobacco production makes an important contribution to Zimbabwe’s economy and to export revenue, and plays a major role in the national economy.
“The crop normally accounts for more than 50 percent of agricultural exports, 30 percent of total exports and nearly 10 percent of gross domestic product (GDP),” FAO says.
While tobacco production took a dip at the turn of the millennium due to several factors including droughts and challenges related to the integration of smallholder farmers, who benefited from the Government’s land reform programme, into the mainstream production of the commodity previously regarded as more technically challenging for black farmers, output has steadily increased with production reaching a record level of 252 million kilogrammes two seasons ago.
While Zimbabwe used to pride itself on a vibrant auction marketing system, the viability of tobacco farmers has, however, been seriously eroded as a result of the introduction of the dual marketing system now dominated by contract floors.
Presently, there are more than 65 contract floors around the country, with the majority being makeshift facilities that present major transparency risks and are seen as compromising efficiency of tobacco marketing. Moreso, the current state of affairs erodes the appetite for genuine investors to invest in modern marketing facilities in line with global trends.
This poses a major threat to the industry, which is arguably one of the most successful empowerment stories not just in the history of Zimbabwe but at a global level.
Analysts say the mushrooming of the “fly-by-night” merchants may result in disorderly marketing of the crop, a major export earner for Zimbabwe.
Strengthening of the marketing system by eliminating fly-by-night merchants has been identified as key to improving transparent and efficient marketing of tobacco.
This can lead to improved production in line with the Government’s target of reaching 300 million kilogrammes and encourage investment in value addition and beneficiation.
