Government has come up with a $20 million loan facility to benefit small scale tobacco growers and ensure auction floors remain functional. This follows realisation that the bulk of flue-cured tobacco was being grown under the contract system.
Few farmers were now selling through auction floors. Addressing farmers at Howgate Farm in Murehwa yesterday, Agriculture, Mechanisation and Irrigation Development Minister Dr Joseph Made said the existing contract companies were not going to be affected by the move.
"We have realised that the bulk of tobacco is produced under contract farming and this has been affecting operations at auction floors who were losing business.
"We are not going to close the contract companies, but we have set aside a fund to assist small holder farmers who finance themselves to produce tobacco. Auction floors were collapsing so Government saw it prudent to come up with a facility to assist small scale farmers who sell on the auction floors. Farmers should apply early as the facility will be on first come fist serve basis," he said.
Dr Made said small scale tobacco farmers normally experienced challenges accessing top dressing fertiliser and this could be an opportunity for them to boost their operations.
"We are also concerned about the increase in the cutting down of trees as a result of tobacco production. The facility can also be used by farmers to procure coal for curing their tobacco.
It is the farmer who will make a choice on what he or she wants from the facility," he said. Tobacco production has been on the increase for the past years due to the favourable price offered by buyers.
According to the Tobacco Industry and Marketing Board statistics, the bulk of the crop is grown under contract farming.
Farmers have sold 157, 1 million kilogrammes of tobacco worth $469 million through the contract floors while 31,1 million kilogrammes worth $89 million were sold through the auction floors.