Local farmers complain of being frozen out of the lucrative tobacco market

Self-sponsored tobacco farmers (farmers not enrolled on an out-grower scheme) in Zambia have bemoaned the lack support to access tobacco markets in the industry as priority is only given to those on sponsorship schemes.

A tobacco grower from Vubwi district of Eastern Province, Chishala Chilufya told the Zambian Business Times – ZBT in an exclusive interview that many self-sponsored farmers are challenged when it comes to accessing the tobacco market as buyers prioritize to source only from farmers on sponsorship schemes hence creating economic slavery.

Chilufya added that the current state of affairs has further led to buyers fixing lower local prices of tobacco without  considering the cost of production, hence pushing self-sponsored farmers to having their tobacco sold at a lower prices due to desperation.

He told ZBT that the tobacco industry has been captured by a few firms which have frozen out independent or self sponsored farmers. This has led to the sponsored or scheme farmers being trapped in a perpetual borrowing cycle and are kept in scheme out of  fear to continue having their produce bought under the sponsor’s scheme.

Chilufya stated that sponsors have concentrated on making their own profit and neglect improving the local farmers wellbeing despite farmers having the capability to increase produce and output if well supported.

He added that only white commercial farmers are given the opportunity to independently grow the crop with an already provided market while majority local farmers struggle to find a market if not captured on the buyer’s program. He has since called on government through the Ministry of Agriculture to revisit the industry and address the issue of pricing especially for self- sponsored farmers who end up being exploited.

He has noted the need for the Zambian government to fully involve itself in the tobacco industry stating that more responsibility has been left to the Tobacco Board of Zambia – TBZ who are also struggling to gain some level of control over how to run the industry without government’s support.

“Tobacco is a high value crop which can also compete with copper, sometimes it can even beat the price of copper per tonne and it can go up to $7,000 per tonne hence the need to critically pay attention to this industry because it has potential to greatly contribute to the growth of the economy,” he said.

Chilufya further said China is the biggest tobacco buyer and that the country should take advantage of its good bilateral ties with the people’s republic of China to link local farmers to a bigger market if the industry is to grow.

The Vubwi based tobacco farmer said that Zambia should emulate countries like Zimbabwe which has strongly supported its national tobacco industry, stating that it is producing 350 million Kilograms of tobacco per annum while Zambia is producing close to 30 Million Kilograms per annum, an indication that Zambia can do more.

Chilufya who is into growing irrigated tobacco owns 530 hectares of land with 30 hectares of tobacco already grown for the 2019/2020 season and has anticipated to produce 90 tonnes from the 2019/2020 marketing season compared to 25 tonnes produced in 2018/2019 session as he only grew 10 hectares of tobacco.

Self-sponsored tobacco farmers (farmers not enrolled on

Agriculture sector is 17% of the banking industry loan book

The Bankers Association of Zambia – BAZ has confirmed that the banking industry has K5.6 billion (US$43 million) of assets allocated towards the agriculture sector with 17.2% of the total loan book in the commercial banking industry sitting with the Agro sector.

Speaking at the official opening of the 2019 National Symposium on Agriculture organized by the Center for Trade Policy and Development – CTPD attended by the Zambian Business Times – ZBT, BAZ Chief Executive Officer Leonard Mwanza said the banking sector has provided platforms which bring together farmers, Agro traders, other private sector players and government that can help the Agro industry come up with sustainable and effective solutions that address challenges farmers are facing to produce at full capacity.

He said the banking sector is interested in ensuring that structural issues and export policies for small and medium scale farmers are taken into account when thrashing out regional integration into the Common market for Eastern and Southern Africa – COMESA and the Southern African Development Community – SADC regions.

“The financial service sector is already a step ahead, we have integrated the payment systems under SADC that will enable the movement of money from and to Zambia and any SADC country, we will soon be launching after piloting, a programme that will enable farmers move funds by use of mobile phones to pay for goods and services across the border,” he said.

Mwanza noted that the sector has had challenges with farmers that do not give a complete story of their Agro businesses and lifestyle, making it difficult for lending institutions to support them financially. He added that the sector with the help of the central bank is working to improve on gender based support by dis-aggregating data statistics that will showcase the number of customers segregated into youths, women and men.

At the same event CTPD Executive Director Isaac Mwaipopo said the symposium will help increase financial inclusion for farmers and address financial hiccups that farmers face in the agricultural sector. Agriculture finance especially for local and emerging farmers has been difficult to model with limited success rate of farmers graduation from small to emerging and finally commercial farmers status.

The Bankers Association of Zambia – BAZ

Pemba leaf backs over 300 tobacco out-grower farmers

One of Zambia’s top five tobacco buyers, Pemba Leaf Tobacco Company – PLTC said that tobacco is a high return crop but stressed challenges faced in the tobacco industry which include lack of a market for small-scale tobacco farmers in the country.

The Company which operates from Zambia’s Eastern Province in Chipata was formed in 2008 with the main aim of buying tobacco from sponsored and self-sponsored farmers who then sell the commodity on the regional and international market.

Pemba Leaf Agronomy Shepard Banda told the Zambian Business Times – ZBT in an exclusive interview that currently the company is has an out-grower scheme catering for over 300 small-scale tobacco farmers who have been provided with farming in puts and in return sell their tobacco to Pemba leaf.

He added that apart from buying tobacco from sponsored/scheme farmers, the company has also been buying from self- sponsored farmers disclosing that so far, the company has for the 2019 season bought over 800 tonnes of tobacco from both self-sponsored and sponsored farmers in Eastern province.

Banda further revealed to ZBT that this year’s projection in tobacco production is likely to reach 1,000 000 tonnes compared to 800 tonnes attained during the 2018/2019 farming season stating that the market has been favorable and farmers have not had many difficulties in growing the crop.

“The way tobacco is grown is different, when we have too much rain the crop doesn’t grow well but again when it’s completely dry production automatically goes down, however this kind of crop only grows well when there is just enough rain. However, this year’s projection in production is likely to go up because the season has been favorable and we have been buying about 600 tonnes about above compared to the 300 tonnes that we were getting last year,” he said.

Banda further stated that despite the progress recorded in the industry, the tobacco market has been under pressure as tobacco has been declared a harmful substance by the World Health Organization – WHO, which has driven away some customers and key stakeholders from supporting the industry  hence resulting in further challenges to getting on the world market.

He confirmed that response and support from farmers has been overwhelming and has since advised small-scale tobacco farmers to increase their production saying the market and the company is ready to support their Agro-businesses.

One of Zambia’s top five tobacco buyers,

2020 budget allocation for Agriculture declines 25%

The Indaba for Agricultural Policy Research Institute (IAPRI) have observed that there is need to get fully prepared with measures to mitigate the effects of climate change which is affecting the entire world negatively.

IAPRI Executive Director, Chance Kabaghe stated that the emphasis with reference to climate change for 2020 Budget should have been mostly been on Agriculture because technically it is the main economic sector that suffers worst from climate change.

Kabaghe was speaking during the deliberations of the 2020 Agriculture Sector Budget Analysis in Lusaka on 17 October 2019, attended by Zambian Business Times – ZBT.

‘‘This year’s budget was with emphasis on climate change, yes though climate change                                                                                                                                                affects power supply, we have the black out because of climate change, but technically, when you talk about climate change, the main sectors of economy that really suffers is the Agriculture sector. So true the emphasis with reference to climate change for 2020budget should have been on agriculture’’, said Kabaghe.

With information from the Intellectual departments on weather forecast, who have projected that this year there will be good rains, Kabaghe questioned how prepared the nation is, to respond to floods which is also an effect of climate change.

‘‘When you talk about climate change its not only drought, it is also floods, are we ready? How much money have we put in reserve for developing crop varieties, for developing Livestock varieties the breeds that can stand the average of changes in climate’’, he questioned.

Kabaghe said IAPRI wants to see actions on the ground on the much talked about climate change. He said the analysis carried out by the highly qualified analysts contains data collected from various ministries to reflect exactly how much has gone into Agriculture.

And delivering the analysis, IAPRI Research Associate Auckland Kuteya said Agriculture is so important because it is the biggest employer in the rural areas of the country and it is also recognized as one of the key sectors that can drive economic diversification and growth.

Kuteya however said despite this recognition of the importance of the sector to driving the economy, the budget allocations for the 2020 for Agricultural have declined by 25%. He stated that in monetary terms, it has declined from K5.3 billion in 2019 to K3.97 billion in 2020 budget and as a share of the national budget; the decline is from 6.1% in 2019, to 3.7% in 2020.

Kuteya noted that this decline is mainly attributed to more resources being channeled to servicing of the debt burden, which is seen in public spending.

‘‘Another worrying thing is that, the projected K31 billion for more borrowing in the coming year, will end up making the cost of servicing the debt to be even higher, now with these reductions in the allocations to the Agriculture sector, how then can we achieve more with less? There’s need to protect ourselves against climate change, and this can be achieved through increasing productivity and improve the resilient’’, said Kuteya.

The Indaba also pointed out the positives from the 2020 national budget as the specific allocation of funds for construction of dams at Mwomboshi irrigation scheme in Chisamba, Lusitu Irrigation Scheme in Chirundu, Musakashi South Irrigation Scheme in Mufulira and Chiansi Irrigation Scheme in Kafue saying there is need to expand to all provinces and especially areas that are more vulnerable to climate change.

The Indaba for Agricultural Policy Research Institute