Chinese firm contracts Zim tobacco farmers

The 2017 tobacco selling season got under way on the Boka Auction floors in Harare yesterday. More than 1 000 bales of tobacco leaves were expected to be sold on the first day. A new electronic system of selling tobacco has also been introduced. Photo: EPA

The 2017 tobacco selling season got under way on the Boka Auction floors in Harare yesterday. More than 1 000 bales of tobacco leaves were expected to be sold on the first day. A new electronic system of selling tobacco has also been introduced. Photo: EPA

Published Mar 16, 2017

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Harare - It is Tuesday afternoon and it’s a hive of activity at one of the farms 60km north-west of Harare as farm owner Paul Mattison prepares for the 2017 tobacco marketing season, which began on Wednesday.

Just a few hours before the selling season kicks off, Mattison and his managers are busy supervising the workers, some loading harvested tobacco leaves into a curing facility while others are busy grading the cured tobacco.

“I am expecting to produce 500 tons of tobacco this season and we have a better quality crop compared to last year.

Funding growers

"We are, however, down on yields this year due to too much rain and a shortage of coal,” said Mattison, one of the 195 farmers contracted by China’s Tianze to grow tobacco in Zimbabwe.

Mattison has been growing tobacco under contract farming with Tianze for 10 years, and has not regretted choosing to work with the Chinese firm.

“I love Tianze. They are absolutely brilliant. They have funded all the developments here including the tobacco barns and curing facilities.

“I have done a lot of capital projects this season, spending about $220000 (R2.8 million) on buying new tractors and putting up a grading shade.

"This was all funded by Tianze,” he added.

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One of the few white farmers remaining in Zimbabwe after the land reform programme, Mattison said he switched to Tianze after having worked with other companies due to Tianze's competitive financing and viable prices they offer for tobacco leaf, which is Zimbabwe’s top export earner.

Tianze currently offers the best tobacco prices in Zimbabwe and its cheap money, lent at zero percent deposit, was the best-ever deal for tobacco growers in the country, Mattison said.

He was lucky that just a small percentage of his crop, about five percent, was affected by hailstorms this year.

He said he hopes to maintain the 170 hectares of tobacco in 2018, and to further expand tobacco infrastructure on a farm that is covered under the Bilateral Investment Promotion and Protection Agreement (BIPPA) between Belgium and Zimbabwe.

He said his tobacco farming preparations were being affected by the lack of storage space as all the tobacco had matured at the same time due to excessive rains, and he hoped the beginning of the selling season would help alleviate the shortage of storage space on his farm.

He had already delivered 2000 bales for sale to the contractor Tianze in Harare and hoped to pay back in full the $1.1 million loan he borrowed from Tianze this season.

The 2017 tobacco auction sales started yesterday, followed by contract sales today.

But Mattison’s neighbour Kerry Ruzvidzo was not so lucky this season, as 60 percent of his 130 hectare crop was damaged by hail storms and disease. His tobacco output had reduced by 25 percent from last year, he said.

“I am expecting 400 tons of tobacco, down from 500 tons last year. This is the worst year I have had since I started growing tobacco under Tianze nine years ago,” he said.

Excessive rains, hailstorms and an incurable disease caused by the hailstorms had seriously affected output and quality of the tobacco crop.

He was also incurring extra costs hiring equipment to fix the road at his farm that had been damaged by excessive rains. “I will not make any profit this year. I am just fighting to pay back the $1.2 million I owe to Tianze and will hopefully be able to get another contract with the firm next year,” he said.

Technology

He said he was not expecting good prices for his spotty tobacco leaf due to its poor quality and added that he would reduce tobacco hectarage to 100 hectares next year due to poor returns this year.

Ruzvidzo said he wants to keep investing in technology in his tobacco farming venture to cut labour costs and improve viability.

Both Ruzvidzo and Mattison decried cash shortages in the economy, saying it had affected their ability to pay their workers. “We have resorted to paying them with plastic money, but the challenge is that workers are now spending more time looking for money at the banks instead of being at work,” said Mattison.

Tianze, a subsidiary of China Tobacco International, started tobacco contract farming in Zimbabwe in 2005 with the sole purpose of helping revive the country’s tobacco output after the land grab.

BUSINESS REPORT

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