THE Tobacco Industry Marketing Board (Timb) is targeting to export tobacco worth US$1,5 billion this year, surpassing the 2022 figure by 67%. Our business reporter Belinda Chiroodza (BC) spoke to Timb acting chief executive officer Emmanuel Matsvaire (EM), who said he was optimistic the industry would achieve this target. Below are excerpts of the interview:
BC: Please give us an overview of tobacco exports.
EM: About 105 million kilogrammes of tobacco have been exported at an average of US$5,04 per kg, compared to 93 million kg exported during the same period last year at an average price of US$4,62 per kg.
The far east remains the top destination for Zimbabwean tobacco, making up about 41% of total exports. The region also has the highest average export price due to high quality tobacco that goes here. We are expecting US$1,5 billion exports this year.
BC: What are you doing as Timb to curb side-marketing?
EM: We have sold 295,5 million kg of tobacco. We estimate that about five million kg have been side-marketed, which is less than 2% of the total crop that we have. We have made a lot of efforts in fighting side-marketing. We have brought in a new compliance framework, the compliance administration framework document, which sets conditions of operation for all stakeholders. We have also established a new department that ensures that compliance is up to date. We also have an inspectorate department and field officers on the ground. These efforts will fight side-marketing.
Last year we had 90 selling points. We have significantly reduced them to 35, which we can easily monitor. Increased monitoring will definitely reduce side-marketing.
BC: But what do you think is the cause of side-marketing in the industry?
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EM: There are several factors that cause side-marketing. But we believe that growers can start side-marketing out of their own will. Factors that push growers to do side-marketing include price and poor market conditions. Some growers are pushed into side-marketing by personal factors. Others are pushed by structural issues within our economy, such as the exchange rate.
Huge debts with contracting firms also push growers into side-marketing. The cost of production also pushes growers to side-marketing.
BC: We understand contractors have been fleecing farmers through fraudulent inputs schemes, which leave them in huge debts. What is your comment and what are you doing to curb this challenge?
EM: If there are those reports and they are given to us, we will definitely act. We donot hesitate to suspend a contractor if they are fleecing farmers. Those are undesirable elements. If there is that information happening in the industry, we certainly would want to know and we will act upon it by way of immediate suspension of that contractor. We want to ensure the viability and sustainability of farmers.
BC: Farmers have been struggling to finance their businesses and they rely on contractors. Isthat not the reason why contractors are taking advantage?
EM: We need to ensure that the farmers are very productive. They should produce five tonnes so that they remain profitable and they should be awarded fairly to ensure that they go back to the fields. As an institution, we ensure that farmers produce to their fullest potential. We ensure that farmers receive the fairest price in relation to other markets regionally or internationally.
BC: For farmers, who want to report corruption and other ills by the contractors, how accessible is Timb?
EM: We have structures within our growing system, toll free numbers and field officers on the ground who relate to farmers daily. We have structures where we have grower representatives. We also have decentralised outside Harare and we have recruited 20 more field officers to interface with farmers. Farmers can use these platforms to report corruption and poor governance.
BC: What is the industry’s production capacity at the moment?
EM: I am sure the only limit is in terms of infrastructure. Tobacco needs to be cured, so the capacity of curing facilities determines to what extent we go in terms of volumes. But we can go over 300 million kg in any year because our irrigation and curing facilities support the production of over 300 million kg of tobacco.
BC: Why then are we not yet there?
EM: We need to ensure that there is a balance between price and what is produced, and quality as well as quantity. We donot wish to increase volumes without good quality. We ensure that we are also growing sustainably using the right sources of energy and labour. We donot need to use children in growing tobacco. We also need to ensure that our environment is safe. Our growth has to be sustainable growth.
BC: Talking about sustainability, how compliant have farmers been?
EM: We have made awareness in terms of labour and the environment. The government has also initiated the concept of afforestation, where funds are now available to the Forestry Commission. Internally, we have partnered Sustainable Afforestation Association (SAA) to ensure that there is enough forest used to cure tobacco. We are also looking into making sure even coal is affordable to farmers. So, our farmers are very sustainable. We are in the right direction in terms of sustainability efforts.
BC: In your financial statements, you mention that operational expenses were a bit high, what are the issues around that?
FM: These are our day-to-day needs in terms of running a business. We have too many selling points. If they are 90, we cannot have 90 vehicles moving around regions and everything else.
We have to make sure that we govern the industry within our financial capacity as an institution where we can afford to have our mandate of regulating the industry. However, other revenue leakages have to do with the stakeholder system exports and imports. We ensure that all merchants declare correctly what they have bought. We ensure that everything passes through the stop order system, not bypassing the system. We have ensured integrity of our system so that no revenue leakages are passed on.
BC: Are tobacco farmers accessing loans?
EM: For this season, the system has been up and running. We opened contracting to everyone willing to contract farmers. Farmers are receiving fertilisers and seed bags, and contracting is ongoing currently.
BC: What is the outlook?
EM: The industry is growing. We also believe the tobacco industry is the vision 2030 accelerator. We believe we have gone from strength to strength every year to ensure that government’s 2030 objectives are met. We are also looking into making sure that 295 million kg or 300 million kg by 2025 is grown in a sustainable manner. We have reformed, we have rebuilt and we have restructured our institution so that we deliver our mandate.