Side-marketing a big threat to tobacco contracting companies

With tobacco auction floors opening this week senior agronomist Lazarus  Gatawa has urged all tobacco farmers who are contracted to honor their contractual obligations and deliver all their crop to the merchant who contracted them and avoid contract default. More than 90% of small holders tobacco farmers rely on contracted farming inputs.         


Gatawa said this will ensure that tobacco contracting business remain vibrant and sustainable to both the contracting and contracted parties. 

"Sidemarketing is a form of contract default where contracted farmers sell their tobacco to third parties in breach of the contractual agreement which states that tobacco shall only be sold to or bought by the contractor who provided inputs to the grower. 

"Sidemarketing has far reaching negative impacts on the overall contract farming framework and its value chain. Perpetrators of sidemarketing can be the farmers themselves, illegal buyers or some licensed contracting companies who buy tobacco from farmers who are not contracted to them. Farmers are being advised to desist from being hoodwinked by rogue tobacco buyers who approach them at their farms with unscrupulous pricing incentives," Gatawa said.

"It is an offense to sidemarket your tobacco as regulated by the Tobacco Industry and Marketing Act (Chapter 18:20) and also promulgated by the statutory instrument 77 of 2022 that prohibits sidemarketing of tobacco," he added.

Tobacco produced in Zimbabwe is among the best in the world in terms of its quality and more than 3 million people in the country depend on tobacco production for their livelihoods. Sidemarketing will affect the business of contracting companies as they will not be able to recover debt from financed growers thereby reducing their capacity to procure enough inputs for the coming season and their potential to enroll more farmers.

The cost of tobacco production is spiraling hence the defaulting farmers will find it difficult to self finance in the succeeding 2023-2024 season thereby affecting their production efficiency. Farmers are also being encouraged to embrace the agronomy advice that they receive from their local agriculture extension officers and sponsoring Company Leaftechs to improve their productivity.Tobacco companies are being encouraged to collaborate on any detected forms of sidemarketing.

A plea is being made to TIMB Inspectorate Department to get more tough with sidemarketing perpetrators and illegal buyers to ensure zero tolerance to sidemarketing and protect the tobacco industry from turning into a haphazard arena.