Tobacco farmers gathering at the market floor. Photo: Supplied/Zimbabwe Tobacco Association
The commencement of the 2024 tobacco marketing season in Zimbabwe on 14 March marked a significant event for tobacco growers in the country. Vice president CGN Chiwenga, along with other high-ranking government officials, farmers, and industry stakeholders, were in attendance to witness the opening of the agricultural sector’s crucial moment. The presence of these prominent country’s hierarchy highlights the importance of tobacco in Zimbabwe’s economy.
In the presence of the vice president, the opening price for tobacco this season was set at USD4.92 per kg, a rise of 50 cents from the previous year’s opening price of USD4.35 per kg. This increase is a positive sign, suggesting that the prices will remain higher than last year and that the upward price trajectory will continue throughout the marketing window.
This season has elicited mixed reactions due to the El Niño-induced drought, which has resulted in a prolonged dry spell and may have severe consequences for tobacco production overall output.
According to the data provided by the Tobacco Industrial Marketing Board (TIMB), as of 2 February 2024, approximately 113 101 hectares of land had been planted, representing a 4% decrease from the previous year’s figure of 117 645 hectares. The primary cause of this decrease is attributed to the delayed rainfall at the beginning of the season and the uneven distribution of rainfall throughout the season.
Crucial role of smallholder farmers in tobacco industry
Tobacco production in Zimbabwe is primarily carried out by smallholder farmers with a larger share of 70-80%, the majority of whom lack access to irrigation facilities that can supplement insufficient rainfall. In contrast, commercial farmers, who account for the remaining 20-30% of tobacco production, operate under fully irrigated conditions and are less likely to be affected by the current El Niño-induced drought.
However, the plight of smallholder farmers cannot be overlooked, as they produce a significant portion of the country’s tobacco crop, and their production will undoubtedly be severely impacted, thus having an immense effect on the overall country’s output. It is essential to address the challenges faced by smallholder farmers to ensure the sustainability of tobacco production in Zimbabwe.
Zimbabwe achieved a noteworthy accomplishment in the tobacco industry last year, as it reached about 296 million kg in production for the first time in its history since its introduction in the early 1900s. However, it is anticipated that this year’s production will decrease by 10% as a result of the current drought threats, leading to a projected yield of 265 million kg. Despite the challenges posed by a severe drought, this target will not be bad.
Zimbabwe is known for its status as the leading producer of tobacco in Africa and fifth globally and is also recognised for producing premium quality tobacco that garners significant attention on the international market, resulting in higher prices. This underscores the importance of tobacco as a cash crop for the country, and it significantly contributes to the agricultural GDP as well as the overall GDP, with an annual contribution of nearly USD1 billion.
Since smallholder farmers play a pivotal role in the cultivation of tobacco, which serves as a crucial source for their livelihood, it is essential to give tobacco the serious consideration it deserves. By doing so, it is possible to unlock the immense potential of tobacco in overcoming barriers to upgrading smallholder farmers’ livelihoods.
Maximising opportunities and mitigating risks
The government has also committed to a target of USD5 billion in contributions from the tobacco industry by the year 2025, which will create numerous opportunities for tobacco farming and significantly boost the country’s economy, with a particular focus on uplifting smallholder farmers.
The opening of tobacco floors could potentially have a positive impact not only on farmers but also on the nation’s economy as a whole. It stimulates the business climate across a range of sectors, as farmers increase their spending during this marketing period.
The agribusiness sector is particularly likely to benefit largely, as they are part of the same value chain as farmers and stand to gain from increased demand for inputs such as seeds, chemicals, fertilisers, and farm machinery. In this way, these businesses will be able to capitalise on the boost in spending by farmers in preparation for the next season.
Although agribusiness dealers may receive a considerable stake, other business sectors such as food retailers, car dealers, clothing markets, banks, transport, and safaris will also enjoy their piece of cake during this period. Also, the government will inclusively benefit from revenue collection, directly from tobacco sales and indirectly from other business transactions.
The primary beneficiaries of this occasion are farmers, who typically receive a once-yearly income from it. As such, it is essential for them to exercise discipline and self-control in their spending habits, in order to sustain their livelihoods. Unfortunately, some farmers have been known to become over-excited upon receiving such a large sum of money and end up spending it recklessly, without considering the long-term consequences.
This can lead to financial difficulties during subsequent seasons, particularly for smallholder farmers who may engage in unreasonable spending during this period. Despite this, it is crucial to maintain a responsible approach to managing this income, in order to ensure its sustainability and to avoid falling into financial hardship.
Strategies for sustainable financial management
Tobacco farming, while ultimately lucrative, entails a laborious and frustrating process that demands blood, sweat, and tears to achieve financial success. Given the significant effort and dedication required, it is crucial for farmers to recognize and respect their hard work. Therefore, to ensure the sustainability of their profits, farmers must establish a framework for managing and allocating their earnings wisely.
To begin with, prudent planning is essential to allocate funds judiciously and prioritize sustainable spending. Seeking the guidance of financial advisors can further reinforce this process by outlining a comprehensive financial plan. Additionally, forming collaborative financial groups enables farmers to pool resources and purchase inputs in bulk at discounted rates. Moreover, conducting performance evaluations and learning from previous production seasons can aid in identifying wasteful expenditures and focusing on essential areas. By adopting these strategies, farmers can maximise their profits and secure a stable financial future.
It is indisputable that this tobacco marketing season will bring joy to farmers and the country at large and hope that they will receive their fair share of what they have tirelessly worked for, amid the El Niño-induced drought.
- Hamond Motsi is a PhD student at the faculty of agrisciences at Stellenbosch University. He holds an MSc in agronomy (cum laude) from Stellenbosch University, BSc Hons in crop science, and BSc in crop and soil science (cum laude), both from the University of Fort Hare. You can contact him at onehammond2@gmail.com. The views and opinions expressed in this article are those of the author and do not necessarily reflect the views or positions of Food For Mzansi.