The ManicaPost
Samuel Kadungure
Senior Reporter
ABOUT 200 tobacco growers have been convicted for side-marketing, while eight contracting companies were suspended for non-remittance of stop order deductions as the sector gravitates from a free-for-all to compliance with legal instruments.
Suspended tobacco financing companies include Voedsel International Tobacco, Agritrade, Chevron, Munakiri, Bindura Leaf, Mbaluk, Huruyadzo and Sub Sahara.
The companies will only have the embargo lifted when their payments are up to date, failure of which their licences will be revoked and alternative markets sought for affected farmers.
The Tobacco Industry and Marketing Board (TIMB) has introduced stringent measures for growers and merchants to safeguard the integrity of the contract system to avoid the shortchanging of farmers and guarantee contractors a return on their investments.
Contract farming is a strategic tool for agri-business.
About 96 percent of tobacco in Zimbabwe is financed through this model.
Under the arrangement, a grower enters into a contract with a company that provides inputs upfront.
The costs are then deducted from the grower’s earnings at the end of the season through a stop order system.
Farmers are on record saying the low prices offered by contractors and poor yields are the main drivers of side-marketing in the industry.
Contracting companies are also accused of charging high interest rates or administrative charges on loans extended to growers.
Inactive growers are also allegedly fueling side-marketing through either buying the flue cured leaf at farm gates, or selling on behalf of the actual grower for a commission.
So far, 438 grower numbers have been deactivated for suspicious trade in a move that has helped stop surrogate buyers from wreaking havoc in the sector.
Tobacco is a specified crop, governed and produced under the Tobacco Marketing and Levy Act, Chapter 18:20 (Revised Edition 1996) – with TIMB being the regulatory authority.
Each grower, contractor, buyer or merchant must be registered with TIMB to operate and growers are mandated to sell their crop to licenced buyers only.
TIMB communications manager, Ms Chelesani Moyo confirmed the suspension of the eight contractors, adding that they have a week to rectify the anomalies or risk having their licences cancelled.
“The fact that these companies have been failing to remit stop order deductions and pay farmers within the stipulated two days means they have financial constraints.
“TIMB is protecting the farmer and if the problem persists for over one week, we will look for alternative markets for the affected growers.
“Suspension does not mean cancellation of these companies’ licences for now. It means, do what you are supposed to do within a specific time frame or risk having your licence cancelled for good,” said Ms Moyo.
TIMB chief operating officer, Mr Emmanuel Matsvaire said their inspectorate department is out to curb all illegal activities in the industry, with 200 people having been arrested, convicted and fined so far because of side-marketing.
“The enforcement of Statutory Instrument (SI) 77 of 2022 (Prohibition of Side Marketing) by the inspectorate has seen 200 people being convicted for contravening Section 6 (5) of the SI under the mantra ‘zero tolerance against side-marketing’,” said Mr Matsvaire.
Mr Matsvaire said TIMB is exploring the GIS technology to solve the challenges being faced by the tobacco industry.
The technology seeks to address inaccurate crop estimation and inaccurate figures for area planted.
It will also facilitate data collection on GPS coordinates.
“Side-marketing is widely driven by these inactive growers with grower numbers and the GIS system is going to assist in cleaning the grower register. It is now a condition for approval for all new grower applications to have GPS coordinates captured first,” said Mr Matsvaire.
Last month, TIMB suspended Golden Barn Tobacco and Dynamic Tobacco for the violation of stop order regulations, manipulation of the booking-in system and facilitation of side-marketing.
Contracting companies have been urged to offer above-market prices to tobacco farmers and partner Government to spearhead training programmes to ensure higher yields.
