Time to transform tobacco value chain long overdue – experts

19 Sep, 2022 - 16:09 0 Views
Time to transform tobacco value chain long overdue – experts Statistics released by the Tobacco Industry and Marketing Board (TIMB) show that a total of 589 bales weighing 51 323 kilogrammes were laid and sold on Day 122.

The Herald

Edgar Vhera Agriculture Specialist Writer

THE country’s 2025 goal of transforming the tobacco value chain into a US$5 billion industry remains a pipe dream if urgent steps are not taken now to operationalise the tobacco value chain transformation plan.

A local agriculture think-tank who requested anonymity singled out the lethargy in instituting the necessary measures saying that would derail the Government’s noble exercise.

“We have now entered the 2022/23 tobacco season following the start of the planting of irrigated tobacco on September 1. We have not heard anything from relevant authorities on what is spelled out in the tobacco value chain transformation plan,” he said.

Tobacco Association of Zimbabwe president Mr George Seremwe also concurred saying though he was aware of the plan, nothing had materialised to date on the ground.

“We are aware of the plan but nothing has been communicated to us – the farmers. We have heard about the US$60 million but have no clue as to whether it was released. Instead of increasing productivity and production, I foresee this season going down if last term’s issues are not addressed. Some farmers have not been paid for their tobacco deliveries, with some of the contractors having just disappeared. There is no engagement with the farmers who do the production,” said Mr Seremwe.

The Government in 2021 came up with the tobacco value chain strategic plan, which sought to achieve a US$5 billion industry through localisation of tobacco funding, increased production and productivity and value addition, beneficiation and export of cigarettes. All of these were meant to contribute to gross domestic product (GDP) growth, foreign currency generation, employment creation and raising household incomes pursuant to the Vision 2030 goal of a prosperous and empowered upper middle-income society.

“Since the strategic plan in August 2021 what has been done to show progress towards the commitment to the noble goal? Did any of the tenets in the whole spectrum see the light? Now that we have started planting irrigated tobacco for the 2022/23 season, has any of the provisions been implemented? These are some of the questions nagging on people’s minds,” observed Mr Seremwe.

Tobacco specialist with Agritex, Hillary Mugiyo, however, revealed that engagements were underway between the different stakeholders such as Tobacco Industry and Marketing Board (TIMB), Agriculture Advisory and Rural Development Services (AARDS) and Tobacco Research Board (TRB).

“Multiple alternative crops such as chillies, peppers, paprika, industrial hemp, sesame seed, melons, butternuts, berries, nuts and fruits have been identified for both small and large-scale farmers. Export markets are being explored with off-taker in Africa (Ghana, Rwanda), Asia and the Middle East showing interest. Plans are also underway for tobacco farmers to pilot market-oriented production for identified export crops such as melons, chillies, and sesame seed in the 2022/2023 season,” said Mugiyo highlighting success to date.

The tobacco value chain contributes significantly to the GDP and export revenues thereby aiding national economic growth. Tobacco production supports up to 160 000 households and accounts for more than 50 percent of agricultural exports and 25 percent of agriculture GDP.

Among the top tobacco producing countries, Zimbabwe is ranked 4th accounting for about 3, 85 percent of tobacco world production in 2019, after China (39, 06), India (12, 03) and Brazil (11, 51) with USA completing the last top five slot at 3, 17 percent.

Zimbabwe was ranked 17 in terms of world tobacco and manufactured tobacco substitute exports for 2020, having exported US$794, 957, 000 worth of tobacco with Poland, United Arab Emirates, Germany, Italy and Belgium taking the first five slots in decreasing order (Trade Map). Zimbabwe is ranked number one in African tobacco and manufactured tobacco substitutes exporting countries.

According to TIMB, Zimbabwe exported tobacco worth US$760, 528, 943 from 186, 807, 937 kg at an average price of US$4, 07 per kg in 2020. The year 2021 saw an increase in earnings at US$819, 140, 779 from 183, 507, 992kg at an increased average price of US$4, 46 per kg.

According to the World Health Organization (WHO) in a report titled: “Status of Tobacco Production and Trade in Africa,” Zimbabwe was Africa’s leading tobacco producer accounting for about 40 ,61 percent of Africa’s tobacco leaf exports in 2018.

Though on pole position in terms of production, Zimbabwe was ranked number nine within the African continent as regards the exportation of the highly-priced value-added cigarette accounting for a paltry 1, 45 percent of cigarette exports while South Africa was on pole position at 30, 02 percent in 2018.

Taking a cue from United Arab Emirates which is an insignificant grower of tobacco, yet according to Trade Map in 2019 imported raw tobacco worth US$1, 2billion, value-added it and then exported tobacco and manufactured substitutes worth US$4, 65billion (a 388 percent increase) and realising net earnings of US$3, 45billion.

Zimbabwe can reap significant foreign currency from her leaf tobacco crop through value addition.

Over the period 1991-2021 the exported volume of Zimbabwe’s tobacco exports has been fluctuating from a low value 50 347 tonnes in 2006 to a high of 217 696 tonnes in 1999. In value terms it hovered from a low of US$149 million in 2006 to a peak of US$934 million in 2017.

Over the period 1991 to 2021, Zimbabwean tobacco exports fetched average prices ranging from US$2, 03 to US$5, 94 per kg .

In 2010 the European Union (EU) was the largest Zimbabwean tobacco importer followed by Far East. The Far East overtook EU from 2011 to date as the largest consumer of Zimbabwe’s tobacco. The EU was the second largest consumer until 2014 and has since been relegated to number three in 2015 after Africa took the second spotw.

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