Tobacco firm launches $660m farmer scheme

ETHICAL Leaf Tobacco (ELT) last week launched a $660 million tobacco input scheme for smallholder farmers in Zimbabwe.

Ethical Holdings Tobacco chief executive, David Machingaidze

The company says it hopes the scheme, which is entering its fourth year and is said to be the largest indigenous inputs programme, will improve the plight of smallscale farmers who, according to a recent survey, have little access to credit due to their inability to meet financiers’ requirements. “We all agree that the smallholder farmer is largely marginalised, no one wants to take risk on them.

But we took that leap of faith in 2015 when we began this journey because what we knew then and what we know now is that the smallholder farmer has the skill and the land. Those two are very important factors and to us that is all that matters,” David Machingaidze, ELT’s chief executive, said at the scheme launch in Harare last week. “Fortunately for us the smallholder farmer from the onset believed in our brand and what we stood for, and we quickly gained their trust, a trust we hold in high esteem to this day,” he said.

The input scheme is divided into four groups according to tobacco production capacity. Under the programme, farmers get inputs, working capital, as well as “personalised” agronomy services.

The company says farmers also get an opportunity to witness the sale of their tobacco. ELT says it also considers equipment acquisition proposals from farmers under the scheme, which is said to be catering for more than 15 000 farmers. As a result of smallholder farmers’ inability to access funding through ordinary channels, contract farming has become the major source of funding for the subsector.

According to a smallholder agricultural productivity survey report published by Zimstat recently, “less than six percent of households in the smallholder agricultural sector are able to access agricultural credit loans”.

The survey showed that smallholder farmer funding constituted only eight percent of banks and micro-finance institutions’ loan books, while saving associations only provided one percent of agricultural loans to households. Government has tried to cover the deficit with state funded programmes, but access to these is limited. According to the survey, access to support from ‘Command Agriculture’ varied from 1,9 percent for communal farmers to eight percent for A1 farmers. As a result of lack of support, the sector’s productivity was stagnant between 2012 and 2017. Zimstat says total output from the sector in 2017 was US$1,1 billion from about US$1,2 billion in 2012. newsdesk@fingaz.co.zw