With the tobacco season starting next Wednesday, advocacy group, Tobacco Farmer Talk (TFT), has been summoned by the police regarding alleged issuance of loans to tobacco farmers for harvesting without regulatory authorisation, amid concerns this would have led to side-marketing.
TFT had reportedly secured a working capital agreement with a “leading” local institution providing a wholesale financing facility to benefit its members to support tobacco curing.
TFT was tasked with identifying eligible members for the initial phase of the revolving financing model, which included support for alternative crop production post-tobacco season.
However, before member selection, the Tobacco Industry and Marketing Board (TIMB) summoned TFT chief executive, Phineas Mukomberanwa, expressing concerns that the funding initiative could potentially facilitate side-marketing and other alleged regulatory breaches.
This led to the matter being referred to the police.
Harare provincial police spokesperson, Inspector Luckmore Chakanza, said TFT was providing loans to tobacco farmers without the necessary registration with the TIMB. “Consequently, Mukomberanwa was questioned in the presence of TIMB representatives,” said Ins Chakanza.
“The loans (extended to farmers) are designed to be repaid through a TIMB stop order system, but unfortunately his association is not licensed. As a result, the TIMB, whose responsibility is partly protecting the farmers, will impose a fine for violations of the regulations.”
With the tobacco selling season set to commence next Wednesday, industry stakeholders have called upon the regulator to strengthen “oversight and prevent contractual breaches.”
Previous instances of side-marketing have caused substantial losses for certain contractors who lost their crops.
Although tobacco marketing has seen significant improvements in the last three years, driven by improved regulatory enforcement, industry participants stress the importance of the TIMB continuing to enforce regulations.
This is crucial to maintain orderly marketing practices and reduce side-marketing, which have historically crippled genuine financiers, resulting in poor investment recoveries and, in some cases, business failures.
“When people offer financial assistance to farmers at the curing phase, it strongly suggests an effort to steal tobacco that has been financed by genuine contractors,” said an official from a contracting company.
“This represents superficial financing, with the sole purpose of acquiring crops they have not invested in.
“We find this highly concerning and believe other similar schemes are being formulated to promote side-marketing. We call on regulators and law enforcement agencies to be alert to these activities.”
This season, the industry players are projecting a harvest between 280 and 300 million kilogrammes.
In 2023, Zimbabwe achieved a record 297 million kgs, just shy of the 300 million kg target set by the country’s tobacco transformation plan. However, drought conditions subsequently led to a decline in output to 231 million kg per year.
Despite the El Nino induced drought, the worst that the country experienced in more than 40 years, tobacco outperformed other crops, including the typically drought-resistant cotton
