ZIMBABWE’S tobacco auction floors face closure next year after farmers failed to repay loans amounting to $1 trillion at a time when the floors are operating at 8% of capacity due to reduced production.
align=justify>In submissions to the Parliamentary Portfolio Committee on Lands and Agriculture on Tuesday, a representative of the auction floors, William Nyabonda, said the introduction of the dual tobacco auction system had compounded their woes.
He said the system had seen declining levels of output with only 17-20 million kg expected to be traded at the auctions this season from a peak of 237 million kg in 2000.
“The signals are that with this trend, auctions will soon become a thing of the past with the possibility of closure in 2007,” he said.
From the 237 million kg in 2 000, output went down to 69 million kg in 2004 and 73 million kg the following year. This year the forecast is 55 million kg, blamed on the ruinous land reform programme and lack of inputs and incentives.
In 1999 before the government embarked on the land reform programme, output for the leaf stood at 250 million kg. The decline over the years is in contrast to the country’s neighbours such as Zambia and Malawi since 2000.
In Zambia tobacco output rose from 4, 3 million kg in 2000 to 7, 3 million kg in 2003 to 24 000 million kg in 2005, representing a more than 500% increase in five years.
The committee, which is chaired by Zanu PF Masvingo South MP Walter Mzembi, also heard that in 2004 the auction floors supported farmers with $1 trillion at today’s rates which they have failed to repay due to poor yields.
“Zimbabwe has a serviceable infrastructure of curing facilities for a crop of 250 million kg. However, a lot of the infrastructure is in the hands of non-tobacco growers,” he said.
Commenting soon after the hearing, Mzembi said: “The sooner we realise that we are losing ground to other players like Brazil which has increased from 440 million kg to 650 million kg and India which was behind us followed by the United States, the sooner it should spur us into urgent action.”
He said it was regrettable that although the country had infrastructure which can handle a crop of 250 million kg, currently it was beset by a number of problems that have seen three primary processing plants and five cigarette manufacturing plants failing to operate at full capacity due to shortage of tobacco.
Mzembi said mechanisms should be put in place for tobacco to take centre stage in the agricultural industry “because if it is grown to maximum it can earn in excess of US$7 billion—enough to cover all our cereal grain imports without growing them”.