Business Chat with Victor Madzinga

Contract Farming

WHENEVER two worlds clash, the victims are bound to suffer “culture shock”. A kind of psycho-social disorientation. A case in point is when the Western cash economy collides with the indigenous subsistence economy.

Incoherent worldviews emerge from stitching together disjointed cultural pieces. My favourite illustration is when our people take to juju to boost business. Compatibility of the two worlds is a delicate condition which can only be attained through a lot of learning and unlearning.

Contract farming has on its hands, the blood of a number of indigenous small-scale tobacco growers. During this tobacco sales season only, I got wind of small scale tobacco growers who took their lives after salvaging miserly proceeds from a season of hard toil and heavy expenditure.

About two months ago, a cousin of mine threw himself in the way of an oncoming vehicle in Headlands and died on the spot. He was coming from selling his tobacco in Rusape. After the contractor had ruthlessly deducted expenses for inputs, he had only US$100 to show for his sweat. The people who had helped with the harvest, were eagerly awaiting his return at home for their share of the proceeds.

It is unfortunate that at the height of his dilemma he had had no-one with whom to share his anguish. To this day my conscience haunts me. On many occasions I had put off visiting him. Had I made it on time, he would have probably shared his tribulations with malume. May your dear soul rest in eternal peace umzunkulu.

Our indigenous culture is famed for its robust social safety net which derives from the extended family. Unfortunately this is getting eroded fast by the emergence of the individualistic, nuclear family of the West. People no longer give support to one another as used to happen in the past. If we cannot undo that change then we have to cope with it.

There is an ex-policeman who was growing tobacco in a resettlement area near Marondera, who was reported to have committed suicide because of a huge debt he had accrued in his farming enterprise.
I heard of yet another case of a resettled farmer near Bindura who took his life by drinking a highly lethal pesticide.

These few cases could be just the tip of an iceberg. The rosy stories that are told of contract tobacco farming belie the devouring monster lurking beneath. If these contract farming-induced suicides were to be documented systematically, the statistics may be staggering.

Many small-scale farmers, including a very large number of those in the communal lands have taken up tobacco growing with a lot of enthusiasm. The enterprise has proved to be very lucrative, at least in the early years. Initially growers, who were using their own wherewithal, were selling their produce at the auction floors, notably Boka.

In time, contractors came onto the scene, ostensibly with a view to assist the farmers by loaning much needed inputs such as seed and chemicals. The contractors were assured of good business as many peasant farmers joined the seemingly profitable bandwagon.

The arrangement with contract farming is that the contractor would loan inputs to the farmer, who in turn was bound to sell exclusively to the contractor. This arrangement would make it easier for the contractor to recoup the loan plus costs. Probably after taking cognizance of the small-scale farmer’s production capability which was limited by lack of machinery and equipment, the maximum quantity of inputs provided by the contractor would only be for one hectare.

However the farmer, eager to get higher proceeds, would spread the inputs over two hectares. This lack of agricultural know-how was disastrous. It would result in much reduced crop yields-inadequate to cover the loan and let alone any return to the farmer.

When the indigenous buyer came onto the scene in 1994 the hope was the farmer would benefit from the competition between the increased numbers of buyers. Paradoxically, this only accentuated the plight of the small-scale tobacco farmer. Some of the indigenous buyers would connive with tobacco graders at the auction floors to force low prices on the hapless farmer.

The indigenous buyer would then come in on the pretext of rescuing the farmer by offering to buy at slightly higher price than that offered at the auction floors after which they would sell to the same auction floors at a higher price. This would leave the small-scale farmer worse off.

Tobacco is a big foreign currency earner. The participation by communal and resettlement farmers in tobacco farming had raised hopes of putting the country’s economy on a firm growth trajectory.

If the effective participation of the small-scale tobacco farmer in growing the national economy is to be guaranteed-and some poor souls saved in the process, then the farmer has to be protected from the predatory practices of the contractor, the unscrupulous buyer and employees of the auction floors.

While deregulation can improve efficiency, the same benefit can be easily offset by self-serving players.

It is only the Government which can rescue the small-scale farmer. The Government, through the Tobacco Industry Marketing Board (TIMB), may have to intervene. For a start, the TIMB may need to enhance the farmer’s know-how by offering the farmer specialist extension services covering the technical aspect of growing the crop, including basic farm management and holding field days – and even counselling services in times of distress.

Taking into account fiscal constraints, the provision of inputs could be left to the contractor. The TIMB may, however, need to closely monitor the loan terms, ensuring the farmer is not fleeced. The operations of the buyer, who is effectively a middleman (izigebengu/makoronyera), need to be regulated closely or if need, be removed altogether.

Otherwise contract farming will continue to take its toll on the small-scale tobacco farmer.