Zimbabwean farmers are growing tobacco again. But some say it’s the lenders who profit from farmers’ debt.
Rosemary Dzodza is a small farmer who recently traveled 200 kilometers to the capital, Harare. She brought her tobacco crop for what she hoped would be a profitable day.
But the 60-year-old farmer ended up sleeping outdoors for two weeks while awaiting payment. When the money arrived, it was only a small portion of what his tobacco was selling later.
She was angry. “My tobacco sold for $ 7,000, but I only get home for less than $ 400,” she says. The rest of the money went to the Merchant who had given him a loan to pay for fertilizers, seeds, labor, firewood and goods for his house.
Dzodza had to repay the loan with interest and sell his crop to the merchant at a fixed price. The merchant then sold the tobacco to the highest tenderer in a public sale. Often the highest price is paid by buyers who export the crop to China.
Tobacco has been a profitable crop in Zimbabwe for over 60 years. White farmers took advantage of this during this period. When supporters of former President Robert Mugabe began to violently take over white-owned farms, tobacco production plummeted. The tobacco harvest increased from 260 million kilograms in 1998 to 50 million kilograms in 2008.
Since then, tobacco production by black farmers has increased. The number of black growers, mostly on small farms, has grown to more than 145,000. Experts estimate this year’s tobacco crop will be 200 million kilograms. This is an increase from 180 million kilograms last year.
Zimbabwe’s banks provided loans to white farmers for tobacco cultivation. But the banks pulled out years ago because the government didn’t provide acts to black farmers on land once owned by whites. Deeds are documents that show ownership of land or property.
Merchant loans helped black farmers get involved in the tobacco industry. The demand started with Chinese buyers. But now many Zimbabwean traders want to take advantage of it.
The Tobacco Market Industry Council oversees the tobacco industry in Zimbabwe. It indicates that 96 percent of tobacco growers were financed through loan contracts. This year, the Tobacco Industry Marketing Board released 20,000 farmers from contracts with traders.
Many say this system has helped Zimbabwe revive the tobacco industry and become the largest producer of the crop in Africa. But many black farmers say the merchants make them poor.
George Seremwe is the president of the Zimbabwe Tobacco Association. He said farmers are always in debt because as soon as they pay off one loan, they have to take another. “Year after year they are in debt,” he said.
He said some farmers are losing animals, their only wealth, to merchants after failing to repay their loans due to poor harvests.
A study published in the publication Tobacco Control found that more than 90% of tobacco farmers want to end their contracts but cannot find other ways to raise money. The study found that nearly 60 percent of farmers said they were in debt.
Economist John Robertson said the problem is that farmers who have taken over land from white people are unable to borrow from banks. He said the banks feared that if a farmer did not repay a loan, they could not sell the farmer’s land to cover the cost because ownership of the land was unclear.
The government says the answer lies in the state-owned land bank, established in April. He said the bank would loan farmers money for their tobacco crops at lower interest rates.
Not everyone is sure this will work. Farmers like Dzodza say they may have to continue contract farming.
I am Jill Robbins.
Farai Mutsaka reported this story to The Associated Press. Gregory Stachel adapted it for VOA Learning English. Mario Ritter, Jr. was the editor.
Words in this story
Merchant – not. someone who buys and sells goods especially in large quantities
tenderer -NOT. a person who offers to pay a fixed price for something that is sold in a public auction (usually the item is sold to the highest-priced bidder)
act – not. a legal document that shows who owns a building or land