Zimbabwean tobacco farmers are calling for increased investment in local processing and beneficiation of the crop, saying greater participation in the value chain would help them earn more from one of the country’s major foreign currency earners.
The bulk of Zimbabwe’s tobacco is currently exported as raw leaf or in semi-processed form, limiting the benefits that farmers and the wider economy can derive from downstream activities such as processing and manufacturing.
Zimbabwe Tobacco Growers Association president Mr George Seremwe said farmers should move beyond simply producing and selling tobacco and become active participants in processing and value addition.
“It is important that farmers do not remain at the production stage of the tobacco value chain. Farmers should be encouraged to participate in processing and beneficiation other than simply producing tobacco and selling the leaf,” he said.
Mr Seremwe said achieving this would require concerted efforts by Government, the private sector and farmers, with growers encouraged to organise themselves and pool resources towards investment in processing facilities.
“I think for that we need better encouragement from the Government side and all stakeholders and farmers to get organised and put our funds together to be able to do some beneficiation among ourselves,” he said.
He proposed that farmers could collectively acquire shares in tobacco processing plants, allowing them to benefit from profits generated beyond the sale of the raw crop.
“Farmers can organise themselves and contribute funds towards owning a share in tobacco processing plants. This will allow farmers to participate in the value chain beyond growing and selling the crop,” he said.
Mr Seremwe said farmer-owned processing facilities could enable growers to retain a greater portion of the profits currently generated by privately owned processing companies.
“Currently all the processing plants are owned by private players and their profit margins are quite high, so if we have our own, we will be eating into that as part of our profits as well,” he said.
He also called for collective ownership of machinery and equipment used in tobacco production and processing, arguing that this could lower costs and reduce farmers’ dependence on privately owned facilities.
“If we reduce the cost of production and processing is done locally and the value addition and the farmers participate in all that, that will encourage more farmers to produce,” he said.
Tobacco remains a key pillar of Zimbabwe’s agricultural economy, with production reaching record levels in recent years. During the current marketing season, farmers sold a record 358.9 million kilogrammes of tobacco.
However, more than 90 percent of the crop is exported as raw leaf and semi-processed tobacco, highlighting significant opportunities for domestic value addition.
Zimbabwe has the potential to generate about US$15 billion from tobacco if it increasingly exports finished products rather than raw and semi-processed leaf.
According to the Tobacco Industry and Marketing Board, Government and the private sector have made progress in promoting tobacco value addition, with the target being to increase processing into cut rag and cigarettes from 2 percent to 30 percent by 2025. So far, value addition has reached 10.15 percent.
More than 10 cigarette manufacturers are operating locally, with a combined production capacity of about 4.4 billion cigarette sticks annually.
As one of the world’s top five producers of flue-cured tobacco, Zimbabwe enjoys a strong reputation for the quality and flavour of its leaf. Increased investment in processing and manufacturing could therefore enable farmers to capture more value while boosting exports, employment and foreign currency earnings.
