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CONTENTS PAGE

Contents

1.0 INTRODUCTION......................................................................................................... 2

2.0 ATTENDANCE REGISTER ................................................................................... 3-6

3.0 NATIONAL TOBACCO WORKSHOP PROGRAMME………………..……...7-8

4.0 REVIEW OF THE 2014 TOBACCO MARKETING SEASON ........................ 9-13

4.1 OFFICIAL CLOSURE OF THE 2014 MARKETING SEASON AND

OPENING OF 2014 NATIONAL TOBACCO WORKSHOP ........................ 14-18

5.0 PRESENTATIONS…………………………………………………………..…..19-82

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1.0 INTRODUCTION

The 2014 Annual National Tobacco Workshop was held on the 7thof November 2014 at Rainbow

Towers Hotel in Harare. The theme of the workshop was “Improved Quality, Value Addition and

Improved Sustainability”.

The workshop was attended by 154 executives representing all sub-sectors of the tobacco

industry. The workshop was also attended, by invitation, delegates from India, who gave a

presentation on e-auctioning of tobacco. The President of the International Tobacco Growers

Association also attended and gave an updated report on the 6th Conference of Parties (COP6) of

the Framework Convention on Tobacco Control that was held in Moscow in October 2014.

A total of seven papers were presented with quality discussions in-between the presentations.

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2.0 ATTENDANCE REGISTER

NAME COMPANY

1 J Gondo Tobacco Industry & Marketing Board

2 M Gudu Tobacco Industry & Marketing Board

3 A Matibiri Tobacco Industry & Marketing Board

4 Mrs Chizodza Tobacco Industry & Marketing Board

5 D J Simbi Tobacco Industry & Marketing Board

6 C Sukume Tobacco Industry & Marketing Board

7 T Dhliwayo Tobacco Industry & Marketing Board

8 Mrs Mumbengegwi Tobacco Industry & Marketing Board

9 V Zungu Tobacco Industry & Marketing Board

10 S Shanyika Tobacco Industry & Marketing Board

11 G Matenda Tobacco Industry & Marketing Board

12 L Chikweya Tobacco Industry & Marketing Board

13 R Sibanda Tobacco Industry & Marketing Board

14 S Baureni Tobacco Industry & Marketing Board

15 E Whingwiri Tobacco Industry & Marketing Board

16 F T Munetsi Tobacco Industry & Marketing Board

17 J Chitsike Tobacco Industry & Marketing Board

18 E Matsvaire Tobacco Industry & Marketing Board

19 J T Gonese Tobacco Industry & Marketing Board

20 R Boka Boka

21 W Bapire Tobacco Industry & Marketing Board

22 E Kapuya Tobacco Industry & Marketing Board

23 T Chindundu Tobacco Industry & Marketing Board

24 W Matizamhuka Tobacco Industry & Marketing Board

25 B Nyangombe Tobacco Industry & Marketing Board

26 K Kamba Tobacco Industry & Marketing Board

27 J Chadzimura Tobacco Industry & Marketing Board

28 F Munatswa Tobacco Industry & Marketing Board

29 N Madinga Tobacco Industry & Marketing Board

30 M Cremer Tribac

31 I Kewada Almar Distribution

32 R Kewada Almar Distribution

33 W Zidyambanje Boka

34 P Chagonda TSF

35 M Magaya MTC

36 C Foya I.L.T

37 N Kopeni Sunrise Tobacco

38 M Mashavave ACTA

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NAME COMPANY

39 B Sekate FINGAZ

40 E Shumba WWF

41 S Chingawo Twine & Allied

42 E Maponde ZFU

43 M Bias Boka

44 R Machube Munaku

45 P Pswarayi Regal Insurance

46 D Beaucamp TANZI

47 J Day Tobacco Today

48 N M Chakanetsa NECF

49 M Musa Midriver

50 R Chakona XDS

51 O Musemburi Industrial Twines

52 T Pilime ZFC Ltd

53 R Mapako EMA

54 M Mutasa ZPTFA

55 C Kashangura TRB

56 Z Acutt Delports

57 A Tofa TIANZE

58 W Mvehena I.L.T

59 B Nleya Ministry of Agriculture

60 N Mashaya Entomon

61 M Mutepfa Shasha

62 M Chikudo Regal

63 G Murehwa NECF

64 G de Jong Savannah

65 O Kupeta PROFERT ZIM

66 A Nyanzira Afriflex Packaging

67 K Butler C.T.P

68 H Moret Boost Africa

69 B Kaswaurere Sunrise Tobacco

70 S Chikandiwa T.P.Z

71 B Henck TANZI

72 G Gumbo STC

73 G Young N.T

74 P Tate Profert

75 A Mavuma M.L.T

76 C Koga T.R.B

77 T Sigobodhla T.R.B

78 J Mutambanesango T.S.F

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NAME COMPANY

79 S Munakiri Munakiri Leaf

80 D Njiva Gold Driven Group

81 T Nyamurera Alliance Insurance

82 S N Machaya CLARIFACT

83 S Chauruka K.M Agribusiness

84 K Langley M.T.C

85 S Masunga T.S.F

86 D Tapfira Leaf Trade

87 J Chidawanyika ZFU

88 D Maulani M.T.C

89 L T Gono Windmill

90 L Tendengu FDT

91 F van de Merwe FCTC

92 T Mahere T.R.B

93 DC Mhembere Z.F.U

94 L Mihoro T.P.Z

95 D Masasa Premier

96 C Rukweza Premier

97 T Moga Maxlucky Tobacco

98 E Mhishi Tacshen Investments

99 C Garapo Z.L.T

100 SDakwa Z.L.T

101 F Macheka Agribank

102 K Delport Delport Tobacco

103 L Gatsi TIANZE

104 C Mlambo Z.T.A

105 C Dhewa Knowledge Trust Africa

106 L Mujuru Leaf Trade

107 L Chipururu Olomide Trading

108 C Sithole T.S.F

109 T Chirindo Afriflex Packaging

110 P Mutero Leaf Trade

111 A Myburgh Maxlucky

112 J Kockott TRIBAC

113 A Molai Savannah Tobacco

114 N Bajpai NIIT Technology

115 E S Sriyathsa NIIT Technology

116 T Munhenga SP Advertising

117 Machini Boost Africa

118 C T Bokosho Midriver Tobacco

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NAME COMPANY

119 P Marandure Z.P.T.F.A

120 J Tevera Z.C.F.U

121 R Patrick B.A.T

122 T N Kanonge E.R.U

123 I Mahufe Voedsel Tobacco

124 Kevin Farming & Mining

125 S Koti B.A.T

126 P Mathemera Curechem

127 A Bganya Z.L.T

128 G Machingura Xinhua News Africa

129 R Ambrose Z.T.A

130 E Gono ZB Bank

131 C Nyakudya Boka

132 T Chinogwenya EMA

133 W Chabikwa Zimbabwe Commercial Farmers Union

134 C Charumbira Windmill/CropLife

135 M Mavesera Holistic Innovations(ZPTFA)

136 A Mambu Forestry Commission

137 T Machemedze Z.B.C

138 T Chapendama Hwange Colliery

139 T Makwinja The Farming Magazine

140 F Tapfumaneyi ZB Bank

141 A Ajento Shasha Tobacco

142 J Tugwete Clarion Insurance Company

143 L Chiyangwa ZB Bank

144 S Matshazi Farmers Development Trust

145 F Dyirakumunda XDS

146 J Gatsi Z.P.T.F.A

147 L Kasango Ministry Of Agriculture

148 G Sixpence Lurshurst

149 W Chakanyuka Freelance Journalist

150 S Majore Safel Insurance Company

151 P T Mangena Premier Tobacco Auction Floor

152 J Rupere Zimbabwe Broadcasting Corporation

153 J Kativhu The Farming Magazine

154 M Chiremba Afriflex

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3.0 NATIONAL TOBACCO WORKSHOP PROGRAMME

CLOSURE OF THE 2014 MARKETING SEASON AND 2014 NATIONAL TOBACCO WORKSHOP

"IMPROVED QUALITY, VALUE ADDITION AND IMPROVED SUSTAINABILITY"

Friday 7th November 2014

VIP Room, Towers Hotel, Harare

TIME PRESENTATION / EVENT PRESENTER DESIGNATION

0800 - 0825 Arrival and registration

0825 - 0830 Welcome remarks Dr A Matibiri CEO, TIMB

0830 - 0845 Review of the 2014 tobacco

marketing season

Mrs M Chinamasa Chairman, TIMB IN CHAIR: Mr N

Chiminya

0845 - 0900 Official closure of 2014 marketing

season and opening of 2014 National

Tobacco Workshop

Honourable Dr J M

Made

Minister of Agriculture,

Mechanization and

Irrigation Development

0900 - 0930 Update on the Framework

Convention on Tobacco Control

Mr F van der

Merwe

President, International

Tobacco Growers

Association

0930 - 1000 e-Auctioning of tobacco in India Mr E S Srivathsa Senior Project Manager,

NIIT Technologies, India

1000 - 1015 DISCUSSION

1015 - 1030 TEA BREAK

1030 - 1100 Prospects for value addition in the

tobacco industry

Mr A Molai Executive Chairman,

Savanna Tobacco

IN CHAIR: Prof D

J Simbi

1100 - 1130 Risk management in tobacco contract

farming

Mr K Butler Managing Director,

Chidziva Tobacco

Processors

1130 - 1200 Participatory forestry management

applicable to small-scale tobacco

farmers

Dr E Shumba Miombo Ecoregion

Conservation

Programme Leader,

WWF

1200 - 1230 Tobacco research highlights Dr D Garwe General Manager,

Tobacco Research Bd

1230 - 1255 DISCUSSION

1255 - 1300 VOTE OF THANKS Mr J T E

Mapondera

Board Member, TIMB

1300 – 1400 LUNCH

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4.0 REVIEW OF THE 2014 TOBACCO MARKETING SEASON

SPEECH BY MRS MONICA CHINAMASA, CHAIRPERSON TIMB

CLOSURE OF THE 2014 MARKETING SEASONAND2014 NATIONAL TOBACCO WORKSHOP

I. SALUTATIONS

1.1 Honourable Deputy Minister of Agriculture, Mechanization and Irrigation Development,

Cde Davis Marapira (for Crops, Mechanisation and Irrigation Development)

1.2 Senior government officials present here;

1.3 Fellow Board members, management and staff of the Tobacco Industry and Marketing

Board;

1.4 Captains of the tobacco industry, (buyers, contractors, auction floors and other industry

service providers);

1.5 Heads of other state enterprises and parastatals;

1.6 Tobacco farmers, leadership of farmers’ unions and relevant commodity associations;

1.7 Ladies and gentlemen,

1.8 Good morning to you all.

2. REMARKS

2.1 We are gathered here once again to review yet another successful tobacco marketing

season and also planning for the coming season.

2.2 This is the fourth year in a row that we witness the official closure of the marketing season

while simultaneously participating in the National Tobacco Workshop.

2.3 Honourable Minister, it is no accident that the theme for this year’s workshop is

“Improved Quality, Value Addition and Improved Sustainability” but that these are some

of the topical issues that should be addressed so as to consolidate growth in the tobacco

sub-sector.

2.4 In pursuit of bigger income, growers are normally tempted to increase their planted areas

without paying particular attention to improvement of quality.

2.5 Consequently, this strategy mostly generates results that radically contradict the grower’s

expectations.

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2.6 Aware of this possible outcome, I advise great caution against increasing hectares at the

expense of improvement in quality.

2.7 Zimbabwean tobacco is a high quality product, but there are market limits for its demand

depending on the prevailing market forces.

2.8 Thus, to survive under the unpredictable market conditions, growers must focus their

control on variables such as quality, costs and efficiencies.

2.9 Honourable Minister, at national level, ZIMASSET set a national developmental plan under

four key clusters of which “Value addition and Beneficiation” is one of these clusters.

2.10 The value addition and beneficiation strategy is anchored on the private sector taking a key

role in adding value to our primary products such as tobacco.

2.11 Therefore, the country needs more investments in cigarette manufacturing so as to realise

more revenue from the exports of cigarettes rather than exporting semi-processed leaf

which is tantamount to exporting jobs to other countries.

2.12 Similarly, more innovation is needed in creating value from other tobacco derivatives such

as stems and fines which can be incorporated into cigarette blends hence creating more

value.

2.13 Honourable Minister, this year’s workshop theme also looks at improved sustainability.

2.14 The need for sustainable tobacco production is not only limited to meeting the

requirements of certain market niches but that it is also an ethical obligation on our part to

share wealth from natural resources, developed over a long period of time with future

generations.

2.15 Honourable Minister, using moral suasion to encourage contractors and growers to comply

with sustainable production has not worked as per our expectations and I call upon

enactment of a policy framework that can bring about total sustainability in tobacco

production.

2.16 Honourable Minister, this workshop is coming after a very successful tobacco season.

2.17 I would like to applaud farmers for their hard work and contractors who assisted in the

funding of production.

2.18 The 2014 tobacco marketing season commenced on Tuesday, 16th February 2014 and ran

for a total of 129 days compared to 140 selling days during the previous year.

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2.19 The number of active registered growers for flue cured tobacco increased from previous

season by 21% to 87 166 of which 44% and 56% delivered to the auction and contract

respectively.

2.20 In addition, there were 53 and 37 registered burley and dark air-cured tobacco growers,

respectively.

2.21 The total hectares increased by 21% from previous season to 107 371 Ha.

2.22 Three auction floors, Tobacco Sales Floor (TSF), Boka Tobacco Floor (BTF) and Premier

Tobacco Floor (PTF) were licensed to operate this year.

2.23 This year, a total of 19 companies were licensed to operate as ‘A’ Class buyers.

2.24 Fifteen (15) companies were licensed as contract buyers.

2.25 For the consecutive third year, decentralised contract buying points were operated by one

contractor in Rusape and Karoi and for the first time in Mvurwi.

2.26 Honourable Minister, my Board welcomes the decentralised contract sales and would like

to encourage other contractors to emulate this noble idea.

2.27 Total flue cured tobacco sales increased from previous season by 30% to 216 196 683

million kg, with contract sales accounting for 76.5% of the sales.

2.28 The 2014 seasonal average price per kg for flue-cured tobacco was 14% softer at US$3.17

compared to 2013 season.

2.29 Notwithstanding the softer prices, the revenue to growers increased by 11.94% from the

previous season to US$685 244 013.

2.30 As for burley tobacco, a paltry 22 654 kg were sold this season.

2.31 Dark air-cured tobacco sales were down by 68% from previous season to 86 615.40 kg with

a total value of US$137 047.82.

2.32 Ladies and gentlemen, since inception in 2011, the national tobacco workshops have

helped to address pertinent issues affecting all phases of the tobacco value chain from

seed to smoke.

2.33 Last year, the stakeholders gathered at Wild Geese Lodge to address the following

challenges;

Deforestation

Growers’ failure to adhere to legislation

High default rate by contracted growers

Tobacco insurance challenges

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Food security

Contractors’ Challenges with the stop order facility

High input costs

Inadequate infrastructure

2.34 Honourable Minister, the industry is implementing a number of initiatives in order to

reduce negative environmental foot print associated with tobacco production especially

deforestation.

2.35 The industry is driven by the notion that the economic benefits derived from tobacco

production should never be allowed to sacrifice the associated environmental concerns.

2.36 Thus, the industry has put in place some initiatives to produce tobacco in a sustainable

manner to protect biodiversity and foster the development and maintenance of healthy

ecosystems.

2.37 These initiatives include aggressive re-afforestation programmes through Sustainable

Afforestation Association, afforestation programmes through contractors and other

organisations such as TIMB and TRB.

2.38 The Tobacco Industry and Marketing Board (TIMB) has partnered with Zimbabwe Tobacco

Association (ZTA) to produce more than 300 000 gum tree seedlings annually that are

disbursed to tobacco growers.

2.39 Additionally, the industry is also promoting the use of fuel efficient curing systems such as

the rocket barns.

2.40 One such programme is the rocket barn revolving fund set up by TIMB which will be

launched later today, where TIMB will fund construction of more than 100 rocket barns

annually.

2.41 Honourable Minister, research and development is at an advanced stage to facilitate use of

other renewable sources of energy for curing tobacco.

2.42 These include use of biogas and solar hybrid barns and giant bamboo.

2.43 Efforts are also underway to facilitate tobacco growers to use coal for curing tobacco by

packaging coal in smaller 50 kg packs that can be afforded by the small scale growers.

2.44 Additionally, the industry launched farmer awareness and education programmes to train

growers on the importance of legislation in tobacco production especially the destruction

of tobacco stalks.

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2.45 One such initiative is the partnership between TIMB and FDT where 100 different growers

are trained per month at each of the four FDT training centres. This is a calendar based

training covering all aspects of tobacco production.

2.46 Honourable Minister, to ensure food security at household level, I am happy that tobacco

contractors are also supplying inputs for food crops.

2.47 We have also seen some improvements since the last workshop as many contractors are

now providing inputs as agreed in the contracts.

2.48 The previous workshop also tackled issues to do with high default rate by contracted

growers.

2.49 Subsequently, TIMB will continue to engage all stakeholders to pursue means to curtail

side marketing.

2.50 One such effort being pursued is the tracking and barcoding of all tobacco bales which shall

be piloted in the 2015 marketing season.

2.51 Honourable Minister, It is expected that this workshop will continue to focus on challenges

in the tobacco industry.

2.52 My Board working together with the Ministry of Agriculture, Mechanisation and Irrigation

Development will embrace all the meaningful recommendations from this workshop as this

will ensure that Zimbabwe consolidates its position as one of the leading exporter of

quality flavour style tobacco.

2.53 It is now therefore, my pleasure to call upon, our Guest of Honour, the Honourable

Minister of Agriculture, Mechanization and Irrigation Development, Dr Joseph M Made

(MP) to deliver his address.

2.54 Thank you / Siyabonga / Tatenda

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4.1 OFFICIAL CLOSURE OF THE 2014 MARKETING SEASON AND OPENING OF 2014 NATIONAL TOBACCO WORKSHOP SPEECH BY: Hon Minister Dr J M Made. Minister of Agriculture, Mechanization and Irrigation

Development

I. SALUTATIONS

1.1 Permanent Secretary in the Ministry of Agriculture, Mechanization and Irrigation

Development represented by Mr Gondo;

1.2 The Chairman, Mrs Chinamasa, Board members and staff of the Tobacco Industry and

Marketing Board;

1.3 Senior government officials present here

1.4 Captains of the tobacco industry, (buyers, contractors, auction floors and other industry

service providers);

1.5 Heads of other state enterprises and parastatals;

1.6 Tobacco farmers, leadership of farmers’ unions and relevant commodity associations

1.7 Ladies and gentlemen;

1.8 Good morning to you all.

II. REMARKS

2.1 It is with great pleasure and satisfaction that I address this fourth edition of the National

Tobacco Workshop, which runs alongside the official closure of the 2014 tobacco

marketing season.

2.2 The tobacco sector has seen positive significant transformation over the past 5 years.

2.3 In this regard, I attribute this growth to hard working tobacco growers and to the

contractors who have played a pivotal role in financing production under the debilitating

illegal sanctions imposed by western countries.

2.4 Esteemed guests, it is indeed gratifying and commendable that stakeholders in the tobacco

industry are continuously being afforded an opportunity to deliberate on issues that affect

their performance.

2.5 Thus, as we deliberate on the day’s business, focus should remain on elements that

complement and enhance sustainable tobacco production, increase grower viability

through improved quality and tobacco value addition.

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2.6 As such, this workshop’s theme “Improved Quality, Value Addition and Improved

Sustainability” is relevant to pertinent issues affecting the industry.

2.7 This year’s workshop comes after a successful agriculture season and signals the start of

yet another successful new season judging from the news we received from the

Meteorological Department that we will experience a normal to above normal rainfall

season.

2.8 Madam Chair, pursuant to mitigating the vagaries of climate change and ensuring

successful cropping, Government has intensified the process of irrigation development and

rehabilitation to curb the effects of recurrent droughts that the country and the region

face.

2.9 Resultantly, my Ministry has mobilised a total of US$98 million Loan Facility from Brazil

under the More Food Africa (Zimbabwe) Programme.

2.10 This loan is in the form of supply of irrigation and mechanisation equipment.

2.11 To date, a contract between the Ministry and suppliers for the first tranche of

US$38million was signed and this first tranche has already been received and will be

disbursed in time before commencement of the imminent summer cropping season.

2.12 Esteemed guests, we have this year seen positive developments not only in tobacco but

maize and small grain production.

2.13 Accordingly, in conformity to the need to improve food security at both household and

national levels, and consistent with the objectives and priorities of ZIM ASSET, Government

in collaboration with other key stakeholders such as input suppliers, financiers and

farmers, is putting in place various financing strategies in support of the 2014/15

agriculture season.

2.14 Thus, Government is mobilising about US$252.3 million in support of agriculture under

Presidential Input Scheme.

2.15 At regional level, the recent SADC summit reviewed the regional food and nutrition

security and noted increases in food production in the 2013/14 season.

2.16 However, the summit also noted that humanitarian assistance and malnutrition still remain

a challenge and to this end, the summit endorsed a regional food and nutrition security

strategy for 2015-2025 to ensure improved food availability, accessibility and utilisation in

a more sustainable manner.

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2.17 At continental level, the Heads of State and Government of the African Union, having met

at their Twenty Third Ordinary Session of the AU Assembly in Malabo, Equatorial Guinea,

from 26-27 June 2014, declared the year 2014 as the African Year of Agriculture and Food

Security.

2.18 The focus of this declaration will be in “Transforming Africa’s Agriculture for Shared

Prosperity and Improved Livelihoods through Harnessing Opportunities for Inclusive

Growth and Sustainable Development and also marking the tenth Anniversary of the

Adoption of the Comprehensive Africa Agriculture Development Programme (CAADP)”.

2.19 CAADP focuses on improving and promoting agriculture across Africa, as a major tool for

enhancing food security and economic development.

2.20 Zimbabwe assented to the CAADP framework on 22 November 2013 and has made

significant millage in developing the roadmap to implement the framework.

2.21 To date, a Zimbabwe Agricultural Investment Plan, a CAADP implementation plan has been

developed and is being implemented.

2.22 Madam Chair, this year’s workshop theme also includes value addition which isa very

crucial aspect to enable the country to fully enjoy the benefits of tobacco production.

2.23 Consistent with ZIM ASSET, which emphasises the need to valueadd and beneficiate our

mineral and agricultural resources, it will be necessary that we buttress the value addition

initiative, extending this to such agricultural commodities as tobacco and cotton currently

being exported in raw form.

2.24 The country should take advantage of exporting cigarettes into the COMMESA region to

benefit from the trading policies of a common market and a free trade area.

2.25 Ladies and gentlemen, Zimbabwe at one time was a proud exporter of more than 4 billion

sticks of cigarettes and regrettably most of our traditional importers of cigarettes have

resorted to importing from other markets.

2.26 Currently, most countries in Sub-Saharan Africa are expanding their cigarette outputs in

order to benefit from rising cash income from many workers in cities and countries with

increasing exports of petroleum and other natural resources and Zimbabwe should benefit

from the same.

2.27 Regrettably, Zimbabwe with a huge competitive advantage in producing tobacco leaf is not

leveraging on that advantage to export cigarettes and yet other Sub-Saharan countries

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such as Senegal which does not produce a single leaf is the third ranked major exporter of

cigarettes in Sub-Saharan Africa after Kenya and South Africa.

2.28 Madam Chair, my Ministry is prepared to work with other Government departments and

the industry to conduct research on where we may find customers for cigarettes in Sub-

Saharan Africa.

2.29 This research will be a helpful tool in planning for the establishment of new cigarette

factories or expanding existing operations and other investment facilities.

2.30 Madam Chair, this year’s workshop theme also seeks to address sustainability issues in

tobacco production.

2.31 Government appreciates all the initiatives that are being done by industry players to

improve sustainability.

2.32 To consolidate these efforts, my Ministry will soon work on new policies that engender

sustainability in tobacco production.

2.33 At regional level, the 34th SADC summit held in Victoria Falls in August 2014 signed a legal

instrument regarding the protocol on environmental management for sustainable

development which will soon be ratified resulting in relevant legislation being enacted.

2.34 In short, ladies and gentlemen, my Ministry will engage any entity, nation or regional block

in every possible way, to ensure that tobacco remains the mainstay of our economy.

2.35 Esteemed guests, I do hereby re-affirm the Government’s support for tobacco production

in spite of unfavourable regulations from WHO’s FCTC and Europe’s Tobacco Products

Directive.

2.36 Madam Chair, I call upon Governments and public health communities to consider more

progressive approaches to health related issues of tobacco consumption rather than

considering tobacco producing countries and growers as partners who lack legitimacy in

any related public health discussions.

2.37 With these few remarks, allow me esteemed guests to officially declare the end of the

2014 marketing season and to declare this National Tobacco Workshop officially opened.

2.38 I wish you all a very productive 2014/15 agricultural season and fruitful deliberations

during the workshop.

2.39 May the Lord bless Zimbabwe. May God bless you all.

2.40 I thank you.

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5.0 PRESENTATIONS

5.1 UPDATE ON THE FRAMEWORK CONVENTION ON TOBACCO CONTROL

ZIMBABWE TIMB TOBACCO WORK SHOP

7 November 2014

Francois van der Merwe – ITGA President

FCTC COP6 Feedback

Reduced riskE-cigs, smokeless

COP6 – 13-18 October 2014, Moscow

Art. 6Price and Tax

Art. 9&10Product Regulation

Art. 19 Liability

International Trade Challenges

Art. 17&18Tobacco Farming

Art 5.3Exclusion

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.

FCTC – 10th anniversary

• Growing pressure on governments to accelerate FCTC implementation, including guidelines

• Tobacco control in development plans

• Expert advice on drafting legislation

• Legal advice on challenges to tobacco measures

The tobacco sector is to lesser or greater extent excluded from policy development and there is increasing sensitivity to engage with the sector – all because of?

FCTC ARTICLE 5.3

• Article 5.3 seeks to preserve the integrity of legislative process from undue influence

• We believe this article is misinterpreted by many and aggressively fuelled by the anti-tobacco lobby!

5.3 “In setting and implementing their public health policies with respect to tobacco control, Parties shall act to protect these policies from commercial and other vested interests of the tobacco industry in accordance with national law”.

Rules of Engagement

19

20

21

22

23

24

25

26

27

28

5.2 e-Auctioning of tobacco in India

29

30

31

32

33

34

35

Auction Monitoring and Recording Process

11/11/201415

Post Auction

Auctioned Bales

Grower Grower Trader /BuyerTrader /Buyer

Is the Auction of the baleAccepted

Move To Godown

Return to Grower

No Yes

Issue Delivery GatepassIssue Delivery Gatepass

Issue GatepassIssue Gatepass

11/11/201416

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Software Development Cycle

11/11/201417

Project Management Practice

Delivery Head

Team Members

Project Lead /

Technical Architect

Project Manager

Quality Control

SEPG Group

Auditors

BU Head

11/11/201418

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Implementation Challenges

Educating the local non IT Savy staff of Board and

traders.

Removing the fear of employment retrenchment.

Setting up & maintaining infrastructure in limited

support availability at remote places.

Skilled Staff Availability.

Providing the first level support concept to the onsite

engineers.

Consistent change management and making the

auctions process uniform across.

Challenges

11/11/201419

Our Capabilities

o Good understanding of domain.

o Well versed in developing and supporting J2EE and

.net mobile applications and across technology

streams.

o Good understanding of functionality and process of

auctioning.

o Experienced quality management process ( CMMI

level 5) in the organization.

o Good technical skills in developing and supporting

applications.

11/11/201420

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Questions & Clarifications

11/11/201421

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5.3 Prospects for value addition in the tobacco Industry

Savanna Tobacco

Pride in being Zimbabwe’s Finest Cigarettes

Pacific Blue – Bronze Award Pacific Storm – Silver Award

Pacific’s Monde Selection Award-Winning brands –Only other Zimbabwean brand to be recognised at these

awards is Delta’s Golden Pilsener in 2013

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The Tobacco Value-Chain

Zimbabwe’s Finest Cigarettes

41

Value-Addition- The Root of Economic Self-Reliance

$3.00/kg

$30-$60/kg

Zimbabwe’s Finest Cigarettes

42

43

44

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5.4 Risk Management In Tobacco Contract Farming

Contents:

Background

Why do Merchants Contract Farmers?

What does Tobacco Contract Farming Entail?

How do Contractors Secure the Loans?

Why Don’t Farmers Pay Back Their Loans?

2015 Projected Average Price & Production Estimate

Managing the Risk

Caution…

The Trade’s Small Scale Debt 2013 & 2014

What Does this Mean?

Suggested Improvements

Summary

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Background

Tobacco Contract Growing was established in around 2005.

In 2014 approximately 76% (165m kgs) of all Zimbabwe tobacco was purchased through the Contract System.

Of this amount, about +-105m kgs was under small scale production and about 60m kgs under large scale production

Why do Merchants Contract Farmers?

Security of production – Zim coming off a recent very low production base.

Traceability of product and to ensure farmer compliance with appropriate chemical and pesticide use, reduced NTRM.

To engage and assist farmers to produce tobacco in a sustainable manner and thereby protect the environment.

Very little commercial or institutional lending available to farmers.

Bulk procurement discount of inputs in a “high cost of doing business” environment reduces the cost of production and increases farmer viability.

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What Does Small Scale Tobacco Contract Farming Entail?

Contractors lend farmers money that is required to be sourcedoffshore.

The value of the loans to small scale farmers is usually made up of someor all of the following:

•GAP Inputs comprising fertiliser, chemicals, coal, fuel and so on

•Application Equipment

•Packaging materials

•Cash and Interest

•In general small scale farmers will receive a total loan value ofbetween $1,200 – $2,000 per Ha. This varies from company to company.

•In general contractors provide free agronomy services to theirgrowers at significant costs to themselves.

•In almost all cases, marketing costs are significantly subsidised togrowers

How do Contractors Secure the Loans?

• Small Scale Contract Farmers require funding from September to February of each growing season.

• Prior to the receipt of a contract, each farmer undergoes a thorough verification process by CTP. This includes confirmation of the farmer’s status with the Tobacco Industry and Marketing Board (TIMB) and the private XDS Credit Bureau as well as confirmation from the field of each farmers location, suitability, reputation and access to land.

• On successfully completing the vetting process a grower is registered with the TIMB and provided with a contract.

• Contracts include the farmer agreeing to a registered direct debit (Stop Order). This registers each farmer’s debt to CTP with the Registrar of Stop Orders. This process is supposed to ensure that CTP is the primary beneficiary of any tobacco sales proceeds associated with the farmers in question.

• Farmers provide a Pledge of Assets schedule in case of default

48

Why Don’t Farmers Pay Back Their Loans?

This is due to one or often a combination of thefollowing risks:

•Poor farmer selection

•Fraud (side marketing)

•Crop failure and/or low viability

•Hail or extreme weather

•Death or illness

•Obfuscated paperwork and ID’s

•Other

How does one mitigate or manage these risks?

2015 Projected Average Price & Total Production

– Viability Risk

2015 Price &

Mass

Projection

49

Managing the Risk

Merchants invest significant sums each year to mitigate againstthese risks in a variety of ways:

Vetting of farmers past production and credit records to assist insecuring creditworthy, good, reliable and viable farmers

Deployment of agronomic field staff for farmer capacity buildingand advice to improve production, quality and growing skills andtherefore viability and repayment potential.

Deployment of in field, real-time solutions to measure and reactto the performance of Farmers & Field Staff.

Deployment of Loss Control agents in the field at grading time tomitigate against side marketing and arbitrage traders.

Retain growers with a proven track record in good productionareas.

Select growers in better farming regions

Do you know where your growers plots are?

50

Caution….

1. Importantly the previous slide’s list of measures is not exhaustive.

2. Tobacco contracting risk management is not an exact science, is very expensive and always evolving.

3. Be aware of the Law of diminishing returns.

4. Relative success is usually how well you apply the multitude of mitigatory measures from start to finish of the season. You cannot rely on a few “big bang” controls, you have to do lots of things well.

The Trade’s Small Scale Debt 2013 & 2014

Total Contractor loans to ALL small scale tobaccofarmers this past season was approximately $80million

In 2014 approximately 10% or $8 million of this figureremains unpaid and is a very similar figure for theprior 2012-13 season.

This equates to +-$16 million in unpaid small scaleloans in the last 2 seasons alone.

51

What does this mean?

On the surface it would appear that collectively the Trade is not doing a very good risk management job.

The Trade is cutting back on its support. Consolidation.

What would help our risk management efforts and improve these numbers?

A more robust application of the law against Stop Order dodgers and side marketers.

Putting a halt to the spread in the number of arbitrage traders.

Halting the annual proliferation of the issuance of new grower numbers for speculative purposes

Managing the growth in the Crop Size to fit the market’s demand. Av price and viability.

Suggested Improvements

More comprehensive use of resources such as the XDS Credit Bureau in the vetting of the credit worthiness of growers.

The improved accuracy of such credit data bases.

Significantly improved documentary and physical evidence linking the grower number to proof of access to land and that the land has been utilised to grow tobacco in any marketing season.

No land utilisation = grower number not activated for that season

A more robust enforcement and holistic approach to eradicating the side marketing scourge including participation from multiple Ministries involved in the various processes, eg: Finance, Justice and Home Affairs to name a few. This is not just an Agricultural or TIMB problem to solve.

Improved crop size estimations and statistics

52

Summary

Credit Risk Management requires a delicate balance

between the measures you implement to alleviate the risks

versus the cost of implementing those measures and

thereby what you save vs what you spend.

These measures implemented might include:

Subsidised inputs & subsidised transport of inputs & bales

Hail insurance, Life Insurance and so on

But at what cost vs the hopefully improved loan

repayment rate?

Thank you.

53

5.5 Participatory Forestry Management Applicable To Small-scale Tobacco Farmers

Participatory Forest Management applicable to small-scale tobacco farmers

Contextual framework

1. 48% of Zimbabwe is under natural forests & woodlands and 27% is

cultivated

2. The forests are rich in biodiversity and support eco-system

functioning

3. The bulk of the forests fall in the public domain – PFM

4. Most have low economic value – few timber species

5. Appetite to convert them into higher economic return venture is

therefore high

6. Country’s forestry resource is being lost at 330 000 Ha per year

7. Tobacco curing is a major contributor to this loss in tobacco areas

54

11 November 2014 - 3

The Tobacco Lifeline

55

Tobacco Lifeline (cont.)

1. Major foreign currency earner: 10.7% of GDP in 2013

2. Registered growers were 105 000 in 2014

3. Crop spreading into non-traditional provinces/areas

4. 210 million kg of leaf sold in 2014 (about 70% wood cured)

5. Wood energy footprint -20m3 cures 1 ton of leaf (traditional barn).

6. Wood energy footprint in forest area equivalent is very high (3 million

m3 equivalent).

7. A BUSINESS AS USUAL APPROACH WILL NOT SUSTAIN THE

INDUSTRY AND THE ENVINRONMENT

© M

ich

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WF

-Can

on

6

Tobacco footprint

56

Current mitigation initiatives

1. Coal of use

• Not taken off well due to various challenges-e.g. barn design

2. Improving wood use efficiency – modern barns

• Cost implications

• Awareness on the technology

3. Promoting eucalyptus based woodlots

• Fast growth

• Good coppicing ability

Disadvantages

• Not an excellent wood source

• Negatively impacts on biodiversity

• Negatively impacts on ecosystems especially with climate change

• Opportunity cost of using exotic wood for tobacco curing

• Possible diversion to commercial timber industry (returns)

• Risks of monocultures-e.g. diseases, red gum psyllid.

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8

Disease risk (red gum psyllid)

11/11/2014 - 8

57

Current mitigation measures (Cont.)

4. Enforcement of S1 116 0f 2012 on indigenous wood movement and

use.

• Limited technical capacity

• Limited institutional coordination

Recommendations

1. Current initiatives on enhancing curing efficiency should

be continued and supported by further research

2. Current initiatives on eucalypt woodlots should be

continued and supported by:

• A broader analysis and conceptualization of their fit

and utility in tobacco curing.

• Research on broadening the species range, including

indigenous species

58

Recommendations (Cont.)

3. Support management of indigenous forests by:

• .Strengthening community level governance structures

for SFM

• Supporting the development of SFM plans & their

implementation

• Promote enrichment planting & related research

• Support value addition to natural forestsDisadvantage:

No immediate return on investment but guarantees sustainability

environmental health-corporate social responsibility!

Recommendations (Cont.)

4. Research into alternative energy sources e.g. sawdust

briquette; bagasse; and bamboo.

IT IS NOT ABOUT A SILVER BULLET, BUT A BASKET OF

OPTIONS THAT FOSTERS SUSTAINABLE SOCIO-

ECONOMIC DEVELOPMENT.

59

Potential role of WWF

1. WWF Zimbabwe is supporting a $600K initiative on SFM

over 3 yrs

2. WWF is happy to join with Industry players in such

sustainability related initiatives.

Thank you

60

5.6 Tobacco Research Highlights

“TOBACCO RESEARCH

HIGHLIGHTS”

TIMB NATIONAL TOBACCO WORKSHOP

Dr. C. Kashangura

TOBACCO RESEARCH BOARD, KUTSAGA

OUTLINE

1. Root knot resistant cultivars

2. Alternative agrochemicals for nematode control

3. New agrochemicals for insect control

4. New varieties

5. Training And Extension

6. Conclusion

61

TOBACCO RESEARCH

In Zimbabwe, tobacco research is undertaken by the Tobacco Research Board (TRB).

TRB’s mandate is “To direct, control and carry out tobacco research in Zimbabwe and …such other research outside Zimbabwe as it considers expedient ” (Chapter 18:21, Section 4)

TOBACCO RESEARCH

Research on all aspects of tobacco

growing is undertaken by a team of

scientists.

1. Agronomists

2. Soil scientists

3. Plant Physiologists

4. Plant Pathologists

5. Entomologists

6. Nematologists

7. Plant Breeders

8. Molecular biologists

9. Agricultural Engineers

10. Training Team

62

Research Objectives

To maximize economic value from

sustainable and responsible tobacco

production practices

Through the development and provision

of elite varieties, and innovative agro-

based technical services and products.

THE HIGHLIGHTS

63

ROOT KNOT RESISTANT

CULTIVARS

ROOT KNOT RESISTANT CULTIVARS

TRB’s mission is to provide growers with high-yielding, superior quality multi-

disease resistant varieties.

All the latest varieties are resistant to 9

diseases including root-knot nematode.

64

ROOT KNOT RESISTANT CULTIVARS

Most of the new varieties can be grown successfully even without a nematicideprovided proper rotations are

followed. Resistant Variety Susceptible Variety

Fumigated and Unfumigated plots – KM10

UNFUMIGATED KM10 FUMIGATED KM10

10

65

IN FUMIGATED AND UNFUMIGATED PLOTS - T 71

UNFUMIGATED FUMIGATED

11

Fumigated and Unfumigated plots – K RK66

UNFUMIGATED FUMIGATED

12

66

Alternative

agrochemicals for

nematode control

New alternative Nematicides

•Most fumigant nematicides such as

methylbromide, EDB and 1,3D are being

banned, phased-out, or their use is

being heavily restricted.

•Thus TRB has been endeavoring to find

effective replacements

67

ALTERNATIVE NEMATICIDES

• A lot of research has

been ongoing in the

World on alternative

nematicides for use in

high value crop

production systems

• And ….

Nematicides that will be relied upon in high-value crops in the US for

nematode and soilborne disease control in a world without MeBr

CHEMICAL NAME COMMON NAME TRADE NAME

Trichloronitromethane Chloropicrin Chloropicrin

Sodium N-

methyldithiocarbamateMetham sodium Vapam

Potassium N-

methyldithiocarbamateMetham Potassium K-Pam

Tetrahydro-3,5-dimethyl-2H-

1,3,5- thiadiazine-2-thioneDazomet Basamid-G

Methyl iodide Iodomethane Midas

[Methyl NN-dimethyl-N-

[(methyl carbamoyl)oxy]-1-

thiooxamimidate

Oxamyl Vydate

Dimethyl disulfide DMDS Paladin

68

ALTERNATIVES ON TOBACCO IN ZIMBABWE

CHEMICAL NAME COMMON NAME STATUS IN ZIM

Sodium N-

methyldithiocarbamateMetham Sodium

Potassium N-

methyldithiocarbamateMetham Potassium

Tetrahydro-3,5-dimethyl-2H-

1,3,5- thiadiazine-2-thioneDazomet/ Basamid

Methyl iodide Iodomethane

[Methyl NN-dimethyl-N-

[(methyl carbamoyl)oxy]-1-

thiooxamimidateOxamyl

Dimethyl disulfide DMDS

Trichloronitromethane Chloropicrin

Root galling scores in Metham

sodium treated plots

0

1

2

3

4

5

6

Control Methyl

bromide

MeNa

50ml

MeNa

100ml

MeNa

150ml

Ga

ll r

atin

g (

Sc

ale

0 -

8)

69

Weed populations in Me-Na Plots

0

200

400

600

800

1000 Broad leaved weeds

Grasses

No

. o

f w

ee

ds

pe

r m

2

MeBr

treated

MeNa

treated

ContNothing applied

Effectiveness of Metham Sodium for

nematode and weed control in the

seedbeds

70

Tobacco

Agrochemicals

Agrochemicals : TRB’s Main Focus

• to replace a number of agrochemicals no longer acceptable for use worldwide

• to search for “greener” alternatives in compliance with the global trend in moving towards a reduced carbon footprint

71

Recommended Replacements for

banned agrochemicals - Seedbeds

Pest/Disease Non-recommended agrochemical

Recommended Replacement

Aphids & leaf-eaters

Acephate, Methamidophos, Monocrotophos

Imidacloprid, Thiamethoxam,

Acetamiprid

Imidacloprid+ betacyfluthrin

Cutworm Acephate, Methamidophos, Monocrotophos

Imidacloprid+ betacyfluthrin,

Recommended Replacements for banned

agrochemicals - Fields

Pest/Disease

Not recommended

Recommended Replacement

Cutworm Fenvalerate Chloranthraniliprole+lambdacyhalothrin, Imidacloprid+ betacyfluthrin, Imidacloprid+lambdacyhalothrin, Alphacypermethrin, Chlorpyrifos, Delatamethrin & Lambdacyhalothrin

Aphids, leaf-eaters

Methamidophos, Monocrotophos, Acephate

Dimethoate, Thiacloprid, Imidacloprid, Thiamethoxam, AcetamipridImidacloprid+ betacyfluthrin, Imidacloprid+lambdacyhalothrin, Acetamiprid+lambdacyhalothrin & Belt expert

72

Recommended Replacements for

banned agrochemicals - Fields

Pest/Disease Not recommended

Recommended Replacement

Nematodes 1.3D, Aldicarb Fenamiphos, Oxamyl, Metham sodium

Budworm Acephate, Methamidophos, Monocrotophos

Methomyl, Flubendiamide(Belt), Indoxacarb, Imidacloprid+lambdacyhalothrin, Rynaxypyr & HGW

Leaf-miner Acephate Cyromazine

Frogeye Benomyl Azoxystrobin, Tebuconazole & Iprodione

EFFECTIVENESS OF SYSTEMIC APHICIDES

0

1

2

3

4

7 WAP 8 WAP 9 WAP 10 WAP

Ap

hid

sc

ore

(0

-4)

Cont

Thiamethoxam

Imidacloprid

Abam/thia(Solvigo)

Fipronil

Imida/lambda

Imida/beta cyfluthrin

(Thunder)

Scale

1 : 1-10 aphids

2 : 11 – 100 aphids

3 : 101 – 1000 aphids

4 : > 1000 aphids

73

0

1

2

3

6 WAP 7 WAP 8 WAP 9 WAP

Untreated control

Thiacloprid

Acetamiprid

Aceta+lambda

Imida + β-Cyfluthrin

Ap

hid

Sc

ore

(0

-4)

EFFECTIVENESS OF CONTACT APHICIDES

(Calypso)

Scale

1 : 1-10 aphids

2 : 11 – 100 aphids

3 : 101 – 1000 aphids

4 : > 1000 aphids

Applied

here

NEW TOBACCO VARIETIES

74

T 72

T 71

75

NEW VARIETIES ON LIMITED

RELEASE

• T 70

• T 73

• T 74

• T 75

• T 76T 73 - Trelawney

TRAINING AND EXTENSION

76

• Tobacco Improved Productivity Sites (TIPS)

• Demonstration sites in tobacco growing areas

• Calendar-based theoretical and practical training sessions on various aspects of tobacco growing (5 666 farmers trained in the 2013/14 season)

Kutsaga TIPS

• Emphasizes adopting a hands-on learning approach on the tobacco production processes

• Best tobacco practices are carried out by the local participants on selected sites across all tobacco growing districts

• Sites dedicated to the advancement of the tobacco industry through the provision of focused, local, relevant and practical farmer skills development

77

Kutsaga TIPS

• At each site, the host farmer and the area AGRITEX Officer are trained for a season on all aspects of Best Tobacco Practices

• At the end of the season the AgritexOfficers and the growers who successfully complete the training are given certificates and those who excel are given exciting prizes.

Certification of successful AGRITEX officers & TIPS

participants.

78

CONCLUSION

We believe the economic prosperity of the tobacco industry is largely spurred by TRB’s insightful research, product development and technology transfer.

All these are deliberately designed to meet both the current and perceived future needs of the tobacco industry.

And to ensure that Zimbabwe remains a preferred source of flavor-style flue-cured tobacco leaf.

79