Failed deal with Alliance One cost East tobacco farmers

About twenty (20) tobacco farmers from Eastern Province who delivered their crop expecting it to be bought off by Alliance One have been left stranded and in a precarious situation after the deal fell off, threatening to cause them huge losses.

Alliance One Zambia is a local unit of Alliance One International which is a leading independent leaf tobacco merchant serving the world’s cigarette manufacturers. The company was formed on May 13, 2005, as a result of the merger of DIMON Incorporated and Standard Commercial Corporation, both world leaders in tobacco processing.

And the Tobacco Board of Zambia – TBZ has explained that the twenty farmers from Eastern Province who brought one million kgs of tobacco to be sold to Alliance One in Lusaka arrived two days after the company fulfilled its buying quota.

When asked what caused this situation which leaves the affected farmers in huge possible losses, TBZ Chief Executive Officer James Kasongo stated that this situation arose due to miscommunication between the company’s officers in Eastern Province and the headquarters in Lusaka.

Kasongo said the farmers signed agreements with Alliance One officers in Eastern Province but there was no confirmation of sales by the headquarters in Lusaka as they had established that their quota was fulfilled and their budget was exhausted.

He said TBZ held discussions with the farmers and allowed the one million kgs of tobacco to enter the sales floor despite having no buyer, adding that TBZ then negotiated with Alliance One who this month agreed to buy up about 684,000 kgs of tobacco leaving a balance of 330,000kg of tobacco.

The TBZ CEO added that Alliance One later agreed to buy an extra 123,400 kgs from the remaining 330,000kgs of tobacco which the company will buy before the end of next week.

Kasongo further revealed that TBZ has signed a contract with a Chinese company that will buy 50,000 kgs of the remaining tobacco and Rolland Imperial Tobacco will buy 10,000kg with Associated Tobacco Company buying the rest.

“People want to have their tobacco bought [off like] today, they are dealing with a company which has other headquarters, so they don’t understand that if we talk to Alliance One, it’s not just Alliance one in Zambia that will make the decision, It’s the corporate office that will make the decision and in the corporate office it’s not one person who makes the decision, it’s a board that decides and that can take a month to get feedback”, he said.

Tobacco continues to be a strategic cash crop that Zambia can utilize to boost its export exchange earnings as over 90% of the crop is exported. The country has good soils and weather conditions that can make Zambia turn this crop into a multi million dollar industry. Efforts to get a comment from Alliance One were underway at the time of going to press.

About twenty (20) tobacco farmers from Eastern

TBZ assures farmers that all Tobacco will be bought

The Tobacco Board of Zambia (TBZ) has confirmed that 36 million kgs of tobacco has so far been bought this year and has assured Tobacco farmers that all the tobacco grown in Zambia will be bought off from them.

TBZ Chief Executive Officer James Kasongo told the Zambian Business Times – ZBT that the board has put in place a systematic method were all the Tobacco Farmers are registered which enables the industry to plan and ensure all the farmers produce has a ready market.

He revealed that a total number of farmers that were registered to sell tobacco this year was 20,073 out of which 19, 953 farmers have had their tobacco already bought off from them, making the crop very attractive to farmers.

Kasongo expressed happiness that some companies have shown interest in buying the remaining 330, 000 kgs of tobacco which has not yet been bought from twenty farmers who are from Eastern Province out of the total 20, 073 registered farmers.

Speaking in an interview with ZBT, Kasongo said he was hopeful that the remaining tobacco would be cleared by next week so that preparations for the next marketing season scheduled for opening in April can begin.

Kasongo noted that tobacco prices are competitive depending on quality and grades of the final crop. He stated that the average market price for this marketing season for cured tobacco is about $2.67 per kg, though other traders were buying at 20 cents, $1 dollar and upto as high $5 dollars depending on quality with the average price for burley being about $1.67.

He added that some Chinese buyers are offering $2 per kg and Alliance One is offering between $1 and $3 noting that the price is also dependent on the quality and grades of the tobacco, which is determined by professional graders on the Tobacco trading floor.

The Tobacco Board of Zambia (TBZ) has

MUSIKA backed e-FISP approach

Leading Agro non-governmental organisation Musika says it has not been part of the Farmer Input Support Programme (FISP) in its current form for the past three years, but was in support of the initial electronic voucher FISP (e-FISP).

Musika which was formed following the successful market development interventions achieved under the USAID-PROFIT private sector development programme, which was run in Zambia for more than seven years by a consortium of two USA-based organisations, NBCA-CLUSA and Cardno has stated that they rather supported the e-FISP approach.

Musika Corporate Affairs Manager Pamela Hamasaka noted that the organisation participated actively during the incorporation of the agribusinesses side in terms of agro dealers as it actively participated in the capacity building of the agro dealers so that they could actively participate in the initial design of the FISP programme.

Speaking in an exclusive interview with the Zambian Business Times – ZBT, Hamasaka clarified that the Agro NGO the last time they actively supported and participated in the FISP was three years ago, she stated that Musika specifically focused on supporting the E-FISP approach.

The e-FISP approach is different from the traditional FISP approach. Under the conventional FISP, government distributes only seed and fertiliser, but under e-FISP, farmers  chose what they require. Those in livestock can purchase feed while others can get farming implements

Under e-FISP, registered farmers receive the input subsidy through pre-paid bank cards or electronic vouchers as opposed to receiving physical inputs centrally procured by Government. Moreover, the e-FISP improves beneficiary targeting and promotes timely access to inputs by increasing private sector participation.

The FISP ‘E-voucher’ programme has the potential to accelerate diversification of the smallholder sector by allowing farmers to purchase a wide range of recommended inputs such as veterinary drugs, agricultural equipment, livestock, poultry and fingerlings.

The new government led by President Hakainde Hichilema has halted the distribution of inputs which is done under the conventional method and stakeholders are whispering to ZBT that there are plans to scrap the program.

However, other Agro stakeholders say the program has largely been successful a-bait having some areas for improvement such as now switching to the full e-FISP system as the extended mobile network coverage has massively expanded and that mobile money growth also offers the banking side that had posed challenges when conventional banks were initially engaged.

Leading Agro non-governmental organisation Musika says it

Scrap off of FISP – Moobwe

The Small Scale Farmers Development Agency (SAFADA) has called on the new dawn government to scrap off the Farmer Input Support Program (FISP) as it is not serving its intended purpose due to challenges in the implementation of the programme.

SAFADA Executive Director Boyd Moobwe said the programme was meant to support vulnerable but viable farmers for three years who would graduate from the programme in order to pave way for other farmers, which has not happened.

Moobwe said government intended to run the FISP programme for a while then gradually withdraw and give leverage to the private sector to work with farmers but that has failed too, noting that the programme could only work effectively when it is depoliticized and run by a private entity owned by the farmers.

Speaking in an interview with the Zambian Business Times-ZBT, Moobwe said farmers have in the past expressed concerns over delays in the distribution of fertiliser, inequality and unknown people benefitting from the programme adding that the problem starts with farmer registration, which was not up to date.

Moobwe however admitted that FISP has been in existence for the past 10 years and has benefitted many farmers and improved some farmers’ way of life despite the various challenges experienced in the implementation as some people who did not qualify for the programme received fertiliser.

He noted that government sets up programs intended to help farmers but the challenge is in the implementation of the programmes, as the target group does not benefit.

“You cannot just register all the people in the village as farmers, just because they are staying in the village automatically they are farmers, there was supposed to be a systematic way of registering farmers and ascertain who exactly is a vulnerable but viable farmer”, he said.

“Instead of getting eight bags of fertiliser, they were getting four, two and in other cases two people were sharing one bag of fertiliser but they have paid a K400 and am happy that government is aware of that”, he said.

Moobwe however said this is not the right time to restructure, audit or scrap off the programme, as it is two months to the rain season therefore government should now focus on distributing fertiliser as the farmers are waiting for the inputs.

He said information going round is that the new government wants to replace the FISP programme with Agriculture Support Programme, which has always been in existence unless the UPND government has a different approach, then they should engage various stakeholders as well as ask farmers how they think they can be assisted.

He emphasized that there should be proper consultations with stakeholders and farmers before deciding what to replace the FISP programme with in order to ensure that the new programme is designed strictly for farmers adding that technocrats in the Ministry of Agriculture may have the knowledge but it is important to ask the farmers how to move forward.

He noted that countries such as Malawi, Tanzania and Kenya have implemented the FISP programme, which is working well.

Some Agro stakeholders have however cautioned the new dawn government to look at how the overall crop output has expanded over the last few years and use the results to just fine tune the program rather than scrapping it. Maize and other crops production has been on an increase with the country now exporting about 1.2 million tons of maize which is expected to earn the country about US$200 million in the latest authorized export quota.

The Small Scale Farmers Development Agency (SAFADA)

More investments needed to close fish deficit – Aller Aqua

Aller Aqua Zambia, a local unit of Denmark’s Aller Aqua group, which is one of Europe’s largest producers of environmentally friendly fish feed has called for more investment in the Aquaculture value chain of Zambia is to close its deficit gap.

An Aquaculture and fish farming expert at Aller Aqua has cited lack of funding,  lack of technical know-how, lack of production of quality fingerlings and the high cost of fish feed as some of the core reasons that Zambia has continued to experience fish deficit.

Emmanuel Nyirenda,  the Technical Advisor at the company’s Zambia unit has disclosed that the lack of funding is one of the major reason why individuals who would like to venture into fish farming have not ventured into the practice. He added that the other hindrances is the price of fish feed which remains high.

Nyirenda said the Zambian government should consider finding ways to cut the price or subsidize the price of feed as producers are having challenges with raw materials, which are expensive, therefore fish feed producers cannot reduce prices, as they would be spending more money to produce the feed than they would be making from their sales.

Speaking in an interview with the Zambian Business Times – ZBT, Nyirenda explained that most of the raw materials used in the production of fish feed such as bone meal, fish meal and other sources of protein are imported from mostly Kenya and South Africa. The landed cost of these imports are high and expensive, therefore making it difficult to sell the feed at a low price.

He confirmed that the company currently sells a 25kg bag of fingerling fish feed at K600, K450 for grower fish feed and K400 for finisher fish feed, noting that it also exports some of the locally produced fish feed to Uganda and Kenya.

The Aller Aqua technical advisor noted that access to feed is a common challenge that fish farmers currently face, noting that choosing feed that is of low quality means farmers will spend more time growing the fish, which also results in spending more money on maintenance and feed in order to grow the fish to the right size.

He said there is need for government to consider introducing a programme similar to the Farmer Input Support Programme (FISP) in the fisheries sector in order to improve the production of fish, as access to funds remains one of the biggest challenges facing fish farmers.

There is also need for establishing well financed outgrower schemes that would entail having companies that provide credit services to fish farmers, supply them with feed and once they harvest, they would pay back adding that government would have to be part of such arrangements and sign a Memorandum of Understanding (MOU) with the private sector.

Nyirenda explained that there are no major or large scale suppliers producing fingerlings throughout the year, which has affected the supply of fingerlings thereby limiting the production of fish. He added that the supply of quality fingerlings is another big challenge.

He said there is need to have more people focusing on hatchery management and that people can be trained on how to produce quality fingerlings, which can help improve the production of fingerlings and in turn increase production of fish.

“Imagine someone travels from Luwingu and they can only get fingerlings from Kasama, we need to have a situation where we have three or four major suppliers of fingerlings in all the provinces of the country”, he said.

Nyirenda said government and stakeholders in the fisheries sector should also intensify training programmes for fish farmers, which can help them with the necessary knowledge on fingerling and fish production as it is a technical practice.

Zambia continues to grapple with a fish deficit despite having extensive fresh water resources in rivers and lakes, as well as a reliable underground water endowment. Zambia continues to spend on fish imports to cover its local production deficit.

Aller Aqua Zambia, a local unit of