Tobacco is Zimbabwe’s second-biggest foreign currency earner after gold, which accounted for $1,6 billion of the $3,2 billion derived from exports last year. As the country’s most lucrative agricultural export, tobacco generated $892 million from 184,1 million kilograms exported to China, South Africa, Indonesia, Belgium and the United Arab Emirates, last year. Earnings were higher in 2017, at $904 million from 182,4 million kilograms of exported tobacco.
Zimbabwe is Africa’s leading tobacco-growing nation and the world’s fourth-largest after China, Brazil and India. The Zimbabwe Tobacco Association says the crop offers higher economic returns per hectare than other major annual crops grown in the country. Attracted by the high returns, more people are growing tobacco. The Tobacco Industry and Marketing Board (TIMB) reports that there were 171 743 growers last year, which is a significant increase from the roughly 1 500 growers in 2000.
Known in Zimbabwe as the ‘golden leaf’ crop because of its colour and its contribution to the economy, the tobacco value chain is estimated to support 2 million people. The beginning of the tobacco marketing season in March is an important event presided over by the president, or one of his deputies, who opens the season by auctioning off the first bale of tobacco.
Deforestation a major problem
Tobacco farming and its related activities come with a high environmental price tag. “We have concerns about this, but a lot is being done at farm level and in the use of improved technology to address the environmental concerns,” says Monica Chinamasa, a tobacco grower and president of the Zimbabwe National Farmers’ Union.
The Forestry Commission of Zimbabwe (FCZ) says 330 000ha of the country’s forest resource, covering approximately 45% of its surface area, is lost every year. Clearing land for agricultural expansion, infrastructure development, collection of wood for energy purposes and tobacco curing, all contribute to deforestation. FCZ reports that tobacco curing is responsible for 15% of the country’s deforestation. In 2016 a total of 50 000ha of forest was cut and burnt for tobacco curing. Last year, 60 000ha was lost to the same purpose.
Tobacco curing is a process that artificially creates favourable conditions for the tobacco leaf to ripen. Heat is used in the curing barns to subject the tobacco to specific temperatures and humidity. Coal or wood are the most commonly used fuel items in Zimbabwean curing barns. Large-scale commercial producers use coal that they buy from the Hwange Colliery Company, about 770km west of the tobacco growing area in the northern part of the country. Most small-scale tobacco growers, constituting 80% of Zimbabwe’s tobacco growers and producing two-thirds of the annual output, use wood to generate heat in their curing units.
The FCZ recently established that eucalyptus wood weighing 425kg per stacked cubic metre with approximately 13% moisture, converts to 8,5 to 9,8kg of firewood fuel used to produce 1kg of cured tobacco. Heat for curing generated by coal needs 0,8 to 2,5kg of coal to produce 1kg of cured tobacco.
“Assuming that the 133 million kilograms of tobacco sold in the 2011 marketing season was cured using firewood, the national wood requirement for that season would have been between 1,1 and 1,3 billion cubic metres of firewood,” says FCZ managing director Abedinico Marufu. “The values would change under the influence of factors such as energy output of the type of wood used and efficiency of the curing system,” he explains.
Reforestation a partial solution
Environmentalists have been pushing the government and farmers to be more conscious of the environmental damage wrought by tobacco curing. As a result, in 2013, the government proposed an initiative in which tobacco companies would contribute 1,5% of their sales towards afforestation in tobacco-growing provinces. The industry opposed the proposal, forcing the government to defer its introduction by two years. Through its national budget in 2015, government introduced the Tobacco Levy Fund, but in the 2016 marketing season, the deduction was reduced from 1,5 to 0,75% of sales earnings.
The money collected through this levy is channelled to the Sustainable Afforestation Association (SAA). This organisation raises awareness among farmers of the dangers of stripping the forest resources and works with them to grow eucalyptus woodlots. However, reforestation lags way behind deforestation as SAA reports that only 10 800ha had been replanted from 2014 to 2017. The numbers for 2017/18 are still being processed but are unlikely to be anywhere near SAA’s target of 5 000ha of reforestation a year.
“Even this target (5 000ha) will not be enough to cure the 200 million kilograms of tobacco produced annually, so additional solutions are urgently needed. Coal is available, but it is not sustainable, and unless furnaces have electrically powered fans to assist combustion, it is expensive and inefficient,” says the SAA.
Technology to the rescue
In addition to promoting reforestation, farmers are encouraged to use more fuel-efficient technologies, rely less on firewood and cause less pollution when curing their crop. Two important technologies have been introduced over the past five years.
In 2014 the Rocket Barn, made by the Tobacco Research Board (TRB) using the design of a Malawian prototype, was rolled out in Zimbabwe. This barn gets its name from its ability to draw in dry air using exhaust smoke, similar to the way a rocket gains upward thrust from its exhaust gases. In June this year, the Twin-Turbo Barn, manufactured by Mamsen Engineering, was launched. These barns are suitable for small- and large-scale growers.
A research paper, Evaluation of the curing efficiency of the rocket barn in Zimbabwe, published in the International Journal of Agriculture Innovations and Research, says environmental concerns have been growing since 2000 when the government expropriated farmland.
According to the study, “the unique feature of the Rocket Barn is its double-exhaust chimney which exhausts both smoke and barn moisture, maximising the drying rate of the tobacco leaf. Due to its smaller furnace diameter, the Rocket Barn uses smaller pieces of firewood, allowing the farmer to use tree branches for curing rather than cutting down the entire tree.
The barn makes it easy for a farmer to use his own woodlot on a rotational basis for many years without going off the farm for firewood. The bulk of the Rocket Barn’s building components are farm bricks, which can be made by a small-scale farmer from materials sourced on his farm.”
The study concluded that the barn produces heavier, better-quality tobacco, with a uniform colour. A farmer burns 4kg of wood to produce 1kg of cured leaf, compared to the conventional barn, which consumes 9kg of wood to produce 1kg of cured leaf. The Rocket Barn can cure 15 000 leaves, which is equivalent to 0,5ha of crop area and its curing cycle is five to six days, while the conventional barn has a cycle of seven to ten days.
The Twin-Turbo Barn
“We have three types of barns: the Kutsaga Counter Current, which is the conventional barn, the Rocket Barn, and the Twin-Turbo Barn, which is the most energy-efficient model so far,” says TRB training manager Goodson Khuddu.
“The Twin-Turbo uses any flammable material, from wood to sawdust and liquefied petroleum gas. It is so efficient that it requires only 1,5kg firewood to produce 1kg tobacco. This is substantially less than the 2,5kg coal needed to cure 1kg.”
According to Mamsen Engineering, the Twin-Turbo model is easy to assemble and suitable for small-scale farmers. “Farmers can use alternative sources of fuel such as wheat stalks, maize stover and hay to cure their tobacco,” the company states.
“The multi-purpose Twin-Turbo Barn can also be used in the timber, fruit, biltong and paprika industries for drying purposes. The barn can be retrofitted into existing brick barns. It is easy to transport, assemble and disassemble, as it can be delivered in a knock-down kit form.”
The TRB also runs a eucalyptus seedlings distribution programme aimed at helping tobacco growers. It provides the seedlings through SAA, which is the biggest buyer.
“We are researching other fuel types, one of which is coal briquettes made by compressing coal fines to form briquettes. We would like to manufacture briquettes from paper, wheat straw, wood shavings, hay and other material. If we use these technologies and run a successful reforestation programme, deforestation could become a problem of the past,” says Goodson.
Tobacco will continue to be a key economic player in the Zimbabwean agricultural sector, but the country could be earning more from its tobacco crop were it not for the smuggling of cigarettes, chiefly to South Africa, Botswana and Namibia.
Cigarettes retail cheaply in Zimbabwe but sell at higher prices in South Africa, where import taxes on cigarettes are at 80%, making legal trade unprofitable. This encourages smugglers to move cigarettes into South Africa illegally.
The high prevalence of tobacco smuggling from Zimbabwe into South Africa is regarded as a major reason why some cigarettes sell below the minimum tax payable price of R17,85 per pack.
In March this year, the Atlantic Council observed in a report, The Illicit Tobacco Trade in Zimbabwe and South Africa: Impacts and Solutions, that while cigarettes are smuggled from Zimbabwe into Botswana, Namibia and Mozambique, these three countries have small populations and low rates of disposable income. It is the South African market that remains the focus of cigarette smugglers interested in big profits.
The numbers on Zimbabwe’s estimated loss to illegal trade are not easily come by. “The financial prejudice is huge on both sides but as with all crime, it is not easy to come up with an accurate figure,” says Tendai Mavima, managing director of Harare-based firm Tax Management Services. “If goods are smuggled, they are not recorded as exports. Sales happen abroad, and any income raised remains unknown.
If, for example, a packet of cigarettes which costs $1 is exported for $1,50, there was a profit of $0,50. At the current tax rate, the government is entitled to 25% of the $0,50 profit. But since we are talking about goods that have left the country illegally, it means that from an income tax perspective, the government has lost $0,125 for that illegally exported packet of cigarettes. Considering the volumes of cigarettes known to be smuggled out of the country, the loss is big,” says Mavima. “There is also a loss in foreign currency.” A report by Japan Tobacco, The Illicit Tobacco Trade in South Africa, published in March last year, states that South Africa may have lost at least R27 billion in tax revenue to the illicit tobacco trade between 2010 and 2016. – Ian Nkala, FarmBiz