Grandicore intensifies blitz against side marketing

LOCAL tobacco company Grandicore has intensified efforts to recover tobacco and money channelled to farmers and inputs under the Tobacco Contract Farming Credit Scheme.
This comes as the Tobacco Industry and Marketing Board (TIMB) recently raised concerns over side marketing amid fears contractors may hold funding for the golden leaf, one of Zimbabwe’s foreign currency earners.

Tobacco is mainly financed by contractors and a few individuals with the capacity to plough money into the billion dollar industry. Contractors account for close to 70 percent of the tobacco delivered at the floors.

Grandicore finance director Donald Ganyaupfu said their company and the industry was worried about the selling of contracted crop to a buyer other than the one who financed it.

A blitz by Grandicore in Nyanga has seen the arrest on a prominent farmer .
Circumstances are that one Kerina Sanyarukowa signed inputs for and neglected to repay the funds forwarded for inputs through delivery of tobacco.
The matter was reported under reference number CR1906/21 and the accused will appear in court on June 22.

“I implore growers who haven’t delivered to deliver their tobacco and own up on their loan repayments.
“For those we have identified to be guilty of side marketing, we have instituted legal proceedings.
“This is a complete attack on government policy on increasing the GDP realised from agriculture,” said Ganyaupfu.

The crop is now being produced through the contract system where farmers are given inputs and expert advice/ only a paltry of the crop is being produced by self-financed farmers. The increase in tobacco production saw a number of contractors.

Contract farming  is a situation whereby a farmer enters into an agreement with a company, mainly referred to as a merchant or contracting company. The company then advances inputs and other essentials required for the growing of tobacco to the farmer, who will in turn make use of his land for the production of the crop.

The farmer is then required to sell the now joint-crop to the company as per the agreed terms between the two parties. Over the years the contracting model has been working well for the country but there is now an elephant in the room known as side-marketing.

Usually side-marketing happens when the crop is ready for marketing, and farmers are at their most vulnerable because they can literally smell the dollars.
Farmers have so far sold 152 million kilogrammes of tobacco worth US$415 million, which is 40 percent higher than the volume of tobacco sold over the same period last year.

Statistics from TIMB show that lower volumes were sold on the auction floors compared to what was delivered to contract floors.
A total of 136 218 bales have so far been sold via the auction floors while 1 880 326 bales have been sold through contract floors.
Buyers have thus far offered the highest price of US$4,99 per kg for deliveries to the auction floors while the highest price of $6.70 per kg was recorded at the contract floors.

To date, 78 868 bales of tobacco have been rejected with 22 211 bales rejected at the auction floors while 50 657 bales were rejected at the contract floors.
This implies that rejection rates were lower at auction floors than contract floors. Tobacco is normally rejected for being mouldy, mixed hands and dirt. About 200 million kilogrammes of tobacco are expected this season. Last year farmers sold 186 million kg.