Farmers have sold 29 million kilogrammes of tobacco since the opening of the 2019 marketing season, with the bulk of the crop coming from contracted farmers. Tobacco Industry and Marketing Board (TIMB)latest statistics show that farmers have sold 29,3 million kg worth US$51,1 million.
Of these, with 6,1 million kg worth US$10 million was sold through the auction floors, while the remainder was sold by contracted growers.
Deliveries at the auction floors have picked up as the variance between last year’s deliveries and this year’s volume has continued to decline.
TIMB statistics show that the 2019 volumes are 45 percent lower than those delivered by farmers during the same period last year, while earnings have dropped by 66 percent. During last year’s corresponding period, farmers had sold 53,9 million kg worth US$151,1 million.
So far, the average price of $1,75 per kg is 37,6 percent lower than the $2,80 that was obtaining at the floors last year. Tobacco growers continue to gripe about the lower prices being offered by buyers, while others are afraid they may have to reduce their hectarage next year.
The farmers said they also were not yet well conversant with the new payment system. This year, farmers are being paid 50 percent of their money in RTGS, while the remaining 50 percent will be deposited into the farmer’s nostro accounts.
The farmers may opt to get 100 percent of their money in RTGS and they will be paid using the prevailing interbank rate.
The bulk of tobacco is grown under contract farming. Under the arrangement, farmers are provided with inputs such as seed, fertilisers, chemicals and in some instances money to pay wages.
Besides the ready availability of inputs, farmers are also attracted to contract farming as the prices are favourable at the contract floors than at the auction floors.
For the past years, the highest price at the auction floor remained at US$4,99 per kilogramme, while prices at the contract floors could go as high as more than $5 per kilogramme.
Tobacco production has been on the increase, with the country benefiting from the foreign currency generated by the crop.
Source – Herald