DEVELOPMENT-ZIMBABWE: Low Tobacco Price Hits Small Farmers

By IPS Correspondents Reprint | | Print |

Morris Nyakudya

MOUNT DARWIN, Zimbabwe, May 19 1998 (IPS) - A slump in the global demand for tobacco has caused sleepless nights for people in the industry but it is small-scale farmers who have been the hardest hit.

Farmers at Nembire, Mt. Darwin, located some 157 kms northeast of the Zimbabwean capital, Harare, say they are facing imminent ruin following unprecedented low prices for the cash crop.

“There is simply no correspondence between what we are earning and what we have put in in terms of labour and inputs like fertilisers,” says Evaristo Mukurunyora, a well-known tobacco farmer here.

Flue-cured tobacco, the main leaf grown here, has been selling between 20 and 21 Zimbabwe dollars a kilogramme on average since the season started last month.(One US Dollar is equal to about 17 Zimbabwe dollars.) Farmers had hoped the price would improve as the season progressed, but it didn’t. In fact, it has remained much lower than last year’s: farmers earned 2.15 U.S. dollars a kilogramme for their tobacco in 1997, as against this year’s tariff of around 1.31 U.S. dollar a kg.

What is particularly disheartening is that this year’s “crop (yield) is better than last year’s”, says Mukurunyora.

The president of the Zimbabwe Tobacco Association (ZTA), Roy Webb, says Zimbabwe’s big commercial farmers have been taking their crop back home to wait for improved prices. Their smaller counterparts, on the other hand, do not seem to have that option.

“The biggest problem for us, small-scale black farmers, is that we are poor,” says Mukurunyora. “We don’t have enough money to take our tobacco back home like the big commercial white farmers when the price is too low. We have to think about buying basic things like sugar for our families.”

The problems facing the small farmers appear enormous. “We need cattle to plough our fields. We need school fees. Many farmers here are now selling one or two of their cattle to finance their children’s education,” Mukurunyora explains.

He fears that the depressed tobacco price will not only threaten his community’s livelihood but will also have adverse effects on farming over the next years.

“Most tobacco farmers here had hoped to finance their expenses through the money earned from tobacco. Now with the slump in its prices, it will be very hard for many,” says Mukurunyora.

The only business people who do not seem to be complaining are local transporters. “We are doing good business this year. Even better than last year,” says Danfy Katanda, who has been operating a haulage business here for the past few years.

But Katanda, too, is worried about the future. “We raised the price of transport because it costs more to run a truck. But I think next year we will do less business because farmers are going to grow less tobacco,” he says.

Mukurunyora agrees. “Farming production will inevitably go down because we will not be able to buy inputs for next season,” he says.

According to the Tobacco Industry and Marketing Board, 27.5 million kilogrammes of flue-cured tobacco valued at 500 million Zimbabwe dollars have been sold since the selling season started in April. In January-April 1997, farmers sold 38,9 million kg, earning almost one billion Zimbabwe dollars. The average price then was 2.24 U.S. dollars per kg.

Webb says if prices remain low, Zimbabwe, now experiencing serious economic difficulties, will lose 2.5 billion Zimbabwe dollars in much-needed foreign exchange earnings. Farmers had expected to gross about nine billion Zimbabwe dollars through the export of 220 million kg of flue-cured tobacco, but this now appears unlikely.

Economists here have warned that the slump will have an effect on overall export earnings expected from the agricultural export sector and projected at about 14 billion Zimbabwe dollars this year.