Chinese funding sows hope among Zimbabwe’s tobacco farmers – NewZimbabwe.com

By Xinhua

MARONDERA – It’s harvesting season, and tobacco farmer Ian Nhata is making final preparations before transporting his golden leaf to the market in Harare, the capital of Zimbabwe.

Nhata, a commercial farmer from Marondera, a farming area about 70 km east of Harare, produces tobacco under contract farming with Tianze, a subsidiary of China Tobacco. Under the contract growing scheme, Tianze provides financing to the farmer for the acquisition of inputs and other needs including labor. In turn, the farmer sells the crop to the firm.

“We started working with Tianze in 2012,” Nhata told Xinhua. “Currently we have a hectarage of 200 under tobacco production. Out of this 200, about 70 is dry land and the remainder is irrigated tobacco.”

Tobacco is a capital-intensive crop and has traditionally been a reserve for elite white farmers. Through contract farming, Tianze has enabled farmers like Nhata to participate in the lucrative business.

“Tianze is giving us these favorable financing terms with zero percent interest which is helping us, especially us as black farmers because we don’t have a lot of collateral to be able to farm big hectarage,” Nhata said.

Apart from financing the whole production process and providing a ready market for the crop, Tianze also offers technical services to the farmer.

Before Tianze entered the Zimbabwean market, the highest price for tobacco was around 2.99 U.S. dollars per kg. This year the first kg fetched 4.35 U.S. dollars when the tobacco auction season opened on March 8.

Li Wenjie, Tianze’s Public Affairs manager, said the company has over the years worked closely with farmers to ensure maximum returns.

“For all our contract farmers, we provide inputs with zero mark-up. The same price we get from our supplies is the same price we bill our farmers,” Li told Xinhua. “So currently we have about 150 commercial farmers. The average hectares is about 60-70 hectares for each farmer.”

Nhata said throughout the years, the partnership with Tianze has been beneficial considering that many farmers do not have collateral.

“If you go to a regular financing company, or regular bank, they will need collateral. They will ask to hold something whilst they give you money, but Tianze is waiving that option. They only need you to be professional, stick to the contract, and deliver what you promised,” he said.

Tianze started tobacco contract farming in Zimbabwe in 2005. Since then, the company has been pivotal in helping revive the country’s tobacco output which had plummeted to a low of 48 million kg in 2008 following the implementation of the land reform program by the government in the early 2000s.

Through its support over the years, tobacco production in Zimbabwe rebounded and reached 212 million kg in 2022.

In a recent interview with Xinhua, Christopher Mutsvangwa, Information and Publicity secretary for Zimbabwe’s ruling Zimbabwe African National Union (ZANU-PF) party, said the emergence of Tianze played a huge role in reviving tobacco production in Zimbabwe after the land reform program.

Following the land reform exercise, which aimed at correcting colonial land ownership imbalances, tobacco production plummeted in Zimbabwe as newly resettled farmers had no collateral.

Mutsvangwa said Tianze modified the tobacco production model from the auction system which depended on Western banks to a contract farming scheme that relied on a direct relationship between the merchant, which is China Tobacco, and the farmers who were beneficiaries of the land reform.

“So had it not been for China Tobacco and its new model which gave prosperity to the new farmers who had benefited from the land reform, the land reform in Zimbabwe would have been a failure,” he said.

In addition, Mutsvangwa said what used to be a reserve for around 3,000 white commercial farmers has now been opened to a wider section of the Zimbabwean farming community.

With continued support from Tianze, Nhata now hopes to increase his hectarage.

“For the future — right now we are at 200 (hectares) hopefully if everything goes well, and we get what we need, we are looking at maybe 250 to 300,” said Nhata.

Zimbabwe is one of the biggest producers and exporters of the golden leaf, with China ranking as the biggest buyer of the crop.

China imported tobacco worth 650 million U.S. dollars last year, a record high, according to the Chinese Embassy in Zimbabwe.

Zimbabwe is projected to produce 230 million kg of tobacco this year, up from 212 million kg last year following good rains and increased sown area.