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Natasha Chamba, Business Reporter

THE Tobacco Industry and Marketing Board (TIMB) has applied to the Reserve Bank of Zimbabwe (RBZ) seeking US$12 million for the purchase of inputs.

The application comes at a time when contractors have said they are struggling to service their offshore loans as most farmers failed to honour their obligations due to subdued prices in the last selling season.

TIMB chief executive officer, Dr Andrew Matibiri, said that the US$12 million would help independent tobacco farmers to purchase key inputs towards tobacco growing this season.

“As TIMB we have applied for in excess of US$12 million from RBZ to purchase key inputs so that we can empower independent farmers to increase productivity,” he said.

“We have learnt that some merchants will have limited funding due to the failure to service their offshore forex obligations so, we have come in to finance some farmers to avoid subdued productivity.

“We are also requesting the Central Bank to increase the ZWL$52 million input scheme to sustainable levels as we move to grow the tobacco sector.”

Dr Matibiri said failure to service offshore loans will mean reduced influence of contractors in the sector.

“Currently, contracted tobacco accounts for over 85 percent of the total output. This was mainly because of the financial muscle that the merchants had,” he said.

Despite beating last year’s record of 252 million kg, this year farmers grossed US$524,6 million after selling 258.1 million kg due to subdued prices. This year, the golden leaf’s average price dropped by 30 percent to US2.03/kg from US$ 2.92/kg last year owing to excess output from Brazil and China.

In 2010 tobacco auction floors were collapsing due to a failing system hence Government saw it prudent to come up with a facility to assist small-scale farmers who sell on the auction floors under Agribank.

The bank’s strategy, marketing and business development director, Mr Joseph Mverecha, said the tobacco facility, which is under his bank’s supervision should increase to ZWL$400 million to help tobacco farmers to improve tobacco output.

He said farmers can apply as early as possible because the facility will be on a first come first served basis.

Mr Mverecha explained that small-scale tobacco farmers normally experienced challenges accessing top dressing fertiliser and this could be an opportunity for them to boost their operations.

“If more independent tobacco farmers could get funding from TIMB via our bank, the country will be able to balance between the auction and contract farming as the growing of the later will destroy the sector in the near future,” he said.

Tobacco was knocked out by gold to second place after three years of being the country’s largest forex earner. Last year tobacco generated US$900 million against gold’s US$1,6 billion. — @queentauruszw