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Empowerment policy scares away investors

ZCFU’s upbeat outlook followed predictions that tobacco output will increase by at least 40% during the 2011 selling season.

The tobacco marketing season opened on Wednesday and the Tobacco Industry and Marketing Board (TIMB) said it expected sales of at least 170 million kg this year up from 120 million kg in 2010.

The country earned US$384 million from tobacco last year.

Tobacco sales used to be the country’s biggest foreign currency earner before President Robert Mugabe’s previous administration embarked on a ruinous land reform programme. 

Peter Gambara, the ZCFU acting director and chief economist said dollarisation had stabilised the agriculture sector and ensured that farmers can plan properly.

“In this regard, the ZCFU has embarked on a variety of schemes meant to assist farmers to make the most out of the agricultural season,” he said in an interview on Friday.

“The ZCFU is co-ordinating a private sector initiative to grow 30 000 hectares of winter wheat this year, among other initiatives in place,”he said.

Gambara said the union had embarked on a scheme that would see its members getting access to fertilizer, generators, tractors and tobacco inputs this season to support the revival of the sector.

He warned that financial institutions who were still reluctant to fund agriculture projects risked losing out as some private companies were now engaging farmers directly to increase production.

Following the chaotic land reform program in 2000, the banking sector started turning away farmers seeking loans as they had no title deeds.

Most farmers registered with government have offer letters or 99 year leases, which banks are reluctant to accept.

ZCFU said it was courting the private sector to structure finance deals that benefit will members.

“For instance, an official body in the form of TIMB effects stop orders for tobacco farmers, which is a secure arrangement that ensures a win-win situation for both farmers and bankers,” Gambara said.

Donald Khumalo, the ZCFU president said they were expecting the industry to grow further this year owing to the now favourable operating environment.

“We want to make it attractive to grow winter wheat by providing the necessary seed, fertilizers and chemicals, fuel and working capital at such a critical moment,” Khumalo said.

Agriculture recorded 18% growth last year up from 14.9% in 2009 and would contribute significantly to the projected economic growth of 8% this year.


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