Berliner Boersenzeitung - Zimbabwe tobacco hits new highs under smallholder contracts

A few dozen aspiring tobacco farmers inspected the broad leaves on a field day of training in the cultivation of the plant, of which Zimbabwe is Africa's leading producer.

Among them was Read Sola, 64, one of more than 300 farmers now growing tobacco in the southern Matabeleland region, which historically is not tobacco country.

"Maize was not profitable as it was prone to disease," Sola told AFP, hoping for a "rewarding harvest" in his new venture.

The large man in blue overalls is contracted to the UAE-based Atlas Agri, one of the biggest of 44 registered merchants and contractors in the southern African country.

Around 95 percent of Zimbabwe's more than 127,000 registered tobacco farmers are contracted smallholders, who account for 85 percent of all output, the tobacco board said.

Most are contracted to Chinese firms in a model that has pushed Zimbabwe's tobacco crop to new highs, despite concerns about debt and deforestation.

From 306,000 tonnes in 2024, production soared to 355,000 tonnes in 2025, the board said.

A harvest of over 360,000 tonnes is expected this year after a 15-percent increase in the planted area, an official told AFP.

It is a dramatic turnaround for a sector that crashed to 48,000 tonnes in 2008 in the wake of a botched government land reform programme that led to the seizure of hundreds of commercial farms.

- Debt trap -

Under the contract model, buyers advance seeds, fertiliser and other inputs on credit and agree to buy the harvest at a set price.

Farmer Davis Tembo, 50, told AFP his contract with a Chinese firm brought mixed fortunes -- income to buy a bigger plot but a grinding dependence on his contractor.

He grew tobacco independently for four years but signed on in 2015 because he lacked the funds to plant a new crop.

While his contractor ensures that inputs arrive on time, unpredictable weather means he cannot always produce an expected yield, leaving him in the red.

"Farmers are compelled to return to the field and stick with contract farming, hoping that they will at some point break even," Tembo told AFP.

Since most smallholders do not hold titles to their land, they cannot access bank finance, which also carries interest rates at more than double the 15 percent offered by contractors, according to industry insiders.

Despite the lures, profitability is elusive, said George Seremwe, president of the Zimbabwe Tobacco Growers Association.

"You have insurance charges, floor charges, and various other levies that make production unsustainable," he told AFP, repeating allegations that contractors collude to keep prices low and "shortchange" producers.

"Farmers are rendered mere labourers of the contracting companies and a number of them become trapped in debt," he said.

- Shifting to Africa -

As in Zimbabwe's lucrative mining sector, Chinese companies dominate tobacco production, drawing criticism of a near-monopoly that contributes to price stagnation.

Chinese firms take 60 percent by value of the national output, which amounts to 30-40 percent of volume, the tobacco board's chief executive Emmanuel Matsvaire told AFP.

They will purchase about 10,000 tonnes less this season, he said, acknowledging the need to "reduce the risk of overexposure to the Chinese market".

Zimbabwe also exports to around 60 other markets, Matsvaire said, confirming plans for US tobacco giant Philip Morris International to resume activities in the country after several decades.

Critics like the World Health Organization (WHO) say tobacco companies are shifting cultivation to Africa, taking arable land away from food production and contributing to deforestation.

From 2005 to 2020, the area under tobacco decreased globally by 15.8 percent but increased by 19.8 percent in Africa, said the WHO, which campaigns for tobacco-free farms.

Its figures for 2020 show Zimbabwe was Africa's top tobacco leaf grower, making up a third of the continent's production.

The country aims to increase output in the coming years and triple domestic value addition of tobacco, such as cigarette production, which currently stands at 11 percent, Finance Minister Mthuli Ncube said at the launch in March of the new marketing season.

(A.Berg--BBZ)