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Elita Chikwati Senior Reporter
CONTRACTED tobacco growers have so far this year sold 53,1 million kg of tobacco worth US$120 million as the system has proved to be effective in solving farmers’ funding challenges, observers say.

The Tobacco Industry and Marketing Board (TIMB) statistics show that the bulk of the crop is being produced by contracted growers.

Out of the US$124 million raised from tobacco sales since the opening of the 2020 marketing season, contracted growers have earned US$120 million.

So far, 688 220 bales have been sold through the contract floors compared to 23 075 bales sold through the auction floors.

The contractors have also been offering high prices with the highest recorded so far pegged at US$6,60 per kg while at the auction floors, the highest price has remained at US$4,99 per kilogramme.

TIMB licensed 33 contractors this year .

Tobacco Association of Zimbabwe president, Mr George Seremwe, yesterday confirmed that the bulk of tobacco was being produced under contract system.

He said most farmers were finding contract farming viable as they got inputs on time and would be able to go back to the land even if the prices of inputs shot up.

“Farmers have realised that it is a viable way of producing tobacco. They get inputs on time. Most contractors also have extension officers who are on the ground monitoring the production of their crop and this reduces side marketing,” he said.

Mr Seremwe, however, said having the bulk of farmers producing under the contract system could also pose challenges as the contractors can also connive and offer low prices.

“This may not be a good development because the free market economy will not be at play, but it has been the only viable option,” he said.

Mr Seremwe bemoaned the fixed exchange rate of US$1:ZWL$25 and said it was negatively affecting farmers who would find it difficult to buy inputs considering that all goods were being priced using the parallel rate.

“This means more farmers will continue going for contract farming,” he said.

Indigenous Commercial Farmers Union president, Mrs Mayiwepi Jiti said the selling of tobacco at the contract floors has been going on smoothly.

She said farmers were getting contracted because they could not afford inputs or access funding from banks.

“Financial institutions do not want to lend money to individual farmers.  The situation is made worse by the fact that some institutions do not accept 99-year leases as collateral. Most farmers do not meet the requirements to access funding from loans as individuals so they end up going the contract farming way.

Tobacco production has been on the increase for the past years and this has also been attributed to an organised contract system.

At the opening of the 2020 tobacco marketing season, Lands, Agriculture, Water and Rural Resettlement Minister Perrance Shiri attributed the success of the tobacco industry to Government policies, involvement of contractors who bring inputs on time, expert advice from agriculture extension workers and others from tobacco auction floors.

“We may have some problems in other crops but in tobacco, which is difficult to grow, we are excelling. We should take lessons and experience from the tobacco industry and utilise it in the production of other crops.

“We should emulate the tobacco industry to boost production in maize, wheat, cotton,” he said.