Extend tobacco business model to other crops – Minister Biti

Harare – The agricultural sector’s contribution to Zimbabwe’s Gross Domestic Product (GDP) could be higher if the business model applied to the tobacco sector is extended to other crops, Finance Minister Tendai Biti has said.

“Presently, the most successful crop is tobacco because it operates with an effective business model, especially in respect of its marketing.

“If this model can be applied to other crops, we could see greater contribution of the agricultural sector to the country’s GDP,” said Minister Biti.

Agriculture has historically been the backbone of the country’s economy, however, it only contributes between 11 and 14 percent of the GDP.

Minister Biti commended tobacco farmers for producing a quality product that has helped the country reach its highest sales of the crop in the last decade.

Zimbabwe was once the world's biggest tobacco exporter, with sales accounting for 30 percent of exports, but production fell to a low of 55.6 million kilogrammes in 2006.

However, there has been an upturn in both output and sales of the crop since dollarisation in 2009.

The high tobacco revenues were despite the fact that the country failed to reach its initial sales target for the current season of 150 million kilogrammes.

“This year we have seen a significant improvement in the quality of tobacco that was exported.

“It meant that the crop fetched higher prices this year, which resulted in the country achieving record income from tobacco,” he said.

During the current selling season, a 45-percent improvement in the average price (from US$2.73 in 2011 to US$3.65 per kilogramme), resulted in the total value of tobacco sold increasing by 46 percent to US$527.6 million from US$361.4 million last year.

Figures from the Tobacco Industry Marketing Board (TIMB) show that the 2012 tobacco-selling season saw an increase in total tobacco deliveries by 9.1 percent from 132.4 million kg delivered last year to 144.5 million kg delivered this year.

Commenting on the performance of the tobacco sector this year, the African Development Bank said improved production in the sector reflected, among others, an increase in the number of farmers joining the only commercial crop that has been viable over the years.

Large-scale commercial farmers contributed 42.8 million kg of the crop while the medium-scale (A1 farmers) sold 41.1 million kg of the crop.

“This is an indication of the huge potential by A1 farmers to grow in the tobacco industry,” said the AfDB.

An analysis of the tobacco sales figures reveals an improvement in the handling of tobacco during the selling process. The statistics show that total bales rejected this season declined by 21 percent.

November 2012
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