TOBACCO merchants — Golden Barn Tobacco and Dynamic Tobacco — were this past week hogging the limelight, albeit for the wrong reasons after the Tobacco Industry and Marketing Board (TIMB) suspended their operations for allegedly violating stop order regulations, manipulating the booking system and facilitating side marketing.
This unfortunate incident comes on the heels of the fining of more than 30 illegal tobacco buyers and sellers by the TIMB as part of a raft of measures the authority is rolling out to restore sanity in the industry.
TIMB has also de-activated 438 grower numbers for suspicious trade in the push to encourage best practices with strict adherence to the law, which all stakeholders in the industry are required to adhere to.
A list of the illegal tobacco traders that were fined was subsequently released last Monday amid revelations that the clampdown was being extended to all selling points across the country.
These measures and subsequent penalties implemented by TIMB in the fight to contain graft in the industry must serve as lessons for all stakeholders and must, therefore, be deterrent enough to achieve the desired effect.
Tobacco is among the key export earners for the country alongside minerals like gold, which makes it prudent for all stakeholders to observe set regulations.
Non–compliance should be punished with stiff penalties that will help restore order in the trading of the golden leaf following many seasons of crisis-ridden marketing times.
Once penalised for such offences, people must naturally think twice about repeating them so TIMB must remove gloves and go all out to identify and discipline these truant stakeholders before it is too late.
TIMB chief executive officer Mr Meanwell Gudu has since indicated that the regulatory authority has also started investigations to uncover possible underhand dealings that could be taking place and jeopardising the efficient and smooth trading of the golden leaf for the benefit of the economy.
It is worth noting that regardless of the current low deliveries of the golden leaf compared to other seasons, the leaf’s high quality and the good prices it is fetching had easily gotten all players in the tobacco value chain excited, but to allow a few bad apples to soil that mood would be outright folly on the part of the authorities.
The measures TIMB is putting in place, therefore, need the support of all players along the value chain and beyond to be effective. It is not a secret that a discord of some sort has been simmering since the start of the tobacco selling season, with many players flouting regulations and going unpunished.
The move by TIMB to stamp its authority and eradicate vice has come at the right time when those that have been involved in the illicit dealings can now be easily identified and dealt with.
It is sad to note that these party spoilers were taking advantage of the seemingly smooth flow of business to nurse their vice by throwing in illegal, but attractive schemes they knew farmers would find difficult to resist.
Tobacco sales have since gone past US$278 million regardless of this litany of problems, hence the need to acknowledge that the corrective measures by TIMB will ensure no one contravenes Section 36 (1) & 44 (1) of the Tobacco Industry and Marketing Act [Chapter 18:20] and Section 5 (1) of Statutory Instrument 61 of 2004 and illegally trades in tobacco prejudicing the country of its deserved revenue.
TIMB’s decision not to register contractors who would have failed to pay their debts or honour their contractual obligations with farmers essentially set the tone for the current purging of such unscrupulous stakeholders, which will bring professionalism into the industry.
All surrogate contractors who fail to disburse recommended minimum inputs to farmers they would have contracted were therefore disqualified.
TIMB regulations require a contractor to disburse a minimum of US$1 000 worth of inputs to small-scale farmers, while commercial farmers get a minimum of US$4 000 worth of inputs.
In recent seasons, many farmers were prejudiced of their dues with contractors failing to deliver complete packages or doing so very late, but still proceeded to get a full repayment from the farmers.
On the one hand, TIMB’s recruitment of informers within farming areas to curb side-marketing activities this season should be lauded but needs strict vetting and monitoring with chances still high that some of the informers may be bribed into protecting offenders.
It is laudable to hear that the board is currently working with relevant authorities to come up with a Statutory Instrument on side-marketing amid revelations that there will soon be a naming and shaming of individuals and contractors perpetuating the practice.
This should not just end there, but be followed with a permanent ban of such characters from officially doing any business with tobacco farmers or other value chain players.
The board should also investigate and act on farmers who are availing their growers’ numbers to be used in the process of side-marketing and getting tokens of appreciation in return.
Of course, TIMB has warned that such numbers will be blocked while it will suspend sales and revoke licences from contractors involved in side-marketing.
This should be implemented and not end in threats so that would-be offenders will always know that it does not pay to try and make money through unorthodox means.
Side-marketing is on its own a form of contract default where a contracted tobacco grower sells his or her tobacco to a third party in breach of a legally binding contractual agreement stating that contracted tobacco shall only be sold to or bought by the licensed contractor who provided inputs for its production.
It is also a form of breach of law when auction tobacco is sold otherwise than through auction floors.
Doing so is in breach of S40 of the Tobacco Industry and Marketing Act (Chapter 18:20).
Side marketing can also take place when a contracted farmer sells his or her tobacco to a licensed contractor other that the one who supplied him or her with inputs.
As a parting shot, TIMB’s current efforts will need the support of all stakeholders to be successful.
It is, therefore, critical for the public to report any side marketing taking place to TIMB in their areas and help plug loopholes that continue to bleed the country’s economy.