The Zimbabwe Tobacco Growers Association (ZiToGA) has said the contract system has failed to empower growers to be independent and instead, it has turned them into indirect workers for the contracting companies.
Tobacco contract farming involves an agreement where tobacco buyers provide the necessary inputs (such as fertilisers, and chemicals) for tobacco production.
In return, these buyers assure to purchase all the tobacco produced under the contract, either at the same prices or higher than those prevalent on the auction floors.
ZiToGA said some of the contracted farmers are always in debt, owing contracting companies huge sums of money which they cannot repay. It said:
The key producers (tobacco growers) have nothing to celebrate given that nothing has significantly changed compared with the previous seasons.
The situation for this season was worsened by poor and unreliable rainfall patterns, which affected crop production, resulting in poor-quality tobacco and a huge decline in harvest.
Considering that most farmers are under the contract system, the decline in the harvest will leave farmers with no bread on their tables but drowning in credit.
The tobacco farming contract system in Zimbabwe has failed to empower tobacco growers to be independent, it has created farmers who rely on credit not viewing farming as a business and the system has turned growers into disguised workers for the contracting companies…
Growers are always in credit owing contracting companies huge sums of money which they cannot repay as companies charge exorbitant interest rates on their inputs straining the farmer who spends more than six months working on the crop.
ZiToGA also said the contracting companies were manipulating prices and buying tobacco at very low prices despite that the crop will be of high quality. It said:
These companies are not worried about the welfare and financial empowerment of the key producers but mainly focus on making huge profits and self-enrichment.
The system also compromises the independence of the growers as it strips off their powers to choose a market of their choice.
The Association urged the Government to review the forex retention ratio which was pegged at 75:25 taking into consideration the economic situation in the country.
It also recommended the establishment of State-controlled interest-free loan input schemes specifically for tobacco growers.
ZiToGA called on the Ministry of Agriculture and the Tobacco Industry Marketing Board to assist growers with skills development and training on tobacco production, financial management and the tobacco value-addition chain.
More: Pindula News