TIMB partners ZSE/VFEX to raise funds for tobacco farmers
Harare (New Ziana) – The Tobacco Industry and Marketing Board (TIMB) has signed a Memorandum of Understanding (MOU) with the Zimbabwe Stock Exchange and the Victoria Falls Stock Exchange Limited through which it hopes to help raise funding for small- scale growers.
Small scale farmers currently grow most of Zimbabwe’s tobacco with at least 67 000 farmers having already registered to grow and sell tobacco during the 2021/22 tobacco season.
The MOU forms the basis of cooperation in fundraising for tobacco farmers and local merchants, compilation and distribution of production and marketing data and the establishment of a tobacco derivatives market.
“Given the funding and marketing challenges faced by small scale tobacco farmers, funding challenges faced by local tobacco merchants and the limited hedging instruments for farmers in terms of price and weather risks, the Tobacco Industry and Marketing Board, the Zimbabwe Stock Exchange, the Victoria Falls Stock Exchange Limited are pleased to announce the signing of a Memorandum of Understanding which forms a basis for cooperation…
“The full implementation of this MOU is expected to result in increased productivity and smoother cash flows for small scale farmers and improved capacity for local tobacco merchants,” said the parties in a joint statement.
At least 90 percent of the tobacco produced in Zimbabwe is grown under the contract system, which is currently dominated by foreign firms.
But early this week, the Government announced a plan for the localization of the financing of tobacco which will see TIMB contracting 50 000 ha of tobacco in the 2021/22 cropping season, up from the 12 000 ha contracted last year.
This is estimated to cost USD 60 million, and will be financed by local banks, including the Agricultural Finance Company.