Banks increase support for tobacco production

Tobacco farmers have received an estimated 58 percent of Zimbabwe’s cumulative agricultural bank loans this summer. This translated to about $600 million of the estimated $1 billion that banks budgeted as production support for agriculture during the 2014-2015 season.

The country is targeting to produce 222 million kilograms (kg) of the crop this season, up from 216 million kg from the previous season.

Zimbabwe Farmers’ Union (ZFU) Executive Director, Paul Zakariya said banks have an appetite to finance tobacco production ahead of other crops because of the limited risks that arise when the crop is auctioned.

“Banks are more keen to support tobacco because of the solid stable policy environment under which the crop is performing.”

“This also relates to the organized marketing of tobacco through the stop-order system, which allows banks to easily follow through on their loans,” said Zakariya.