Category: Leaf

  • Call to end contract farming

    Call to end contract farming

    The government of Zimbabwe should create a bank to provide financial support for tobacco growers and eliminate contract farming, according to a NewsDay story quoting the executive director of the Tobacco Industry Development Support Institute for Southern Africa (TIDSI), Jeffrey Takawira.

    Although tobacco was one of the country’s biggest foreign currency earners and contributed at least 10 percent to its gross domestic product, most tobacco growers remained poor and faced financial challenges annually, Takawira said.

    One of the growers’ major complaints was pricing, but they were concerned also about the lack of government policies in respect of support systems.

    Takawira reportedly told NewsDay in emailed responses that there was a need for the government to establish a special bank to support tobacco farming and eliminate contract farming.

    ‘Failure by farmers to access cash at the banks erodes confidence in the financial services sector,’ Takawira said. ‘The governor of the Reserve Bank of Zimbabwe, John Mangudya, is on record revealing that there has been a marked improvement in foreign currency inflows into the country driven by agriculture and mining.

    “So what boggles the mind is why then should farmers fail to access their cash. Where is the money? [As] the Tobacco Industry Development Support Institute for Southern Africa, we advance the idea of a tobacco bank.’

    The Parliamentary Portfolio Committee on Agriculture is said to have conducted a fact-finding tour of the challenges facing the tobacco auction floors, but it has not yet reported in full.

  • Leaf production down

    Leaf production down

    Tobacco output in the Philippines this year may not reach 50,000 tonnes because a decline in the demand for cigarettes caused growers to reduce their plantings, according to a Business Mirror story quoting the National Tobacco Administration (NTA).

    The country reportedly produced 56,456.73 tonnes last year

    But there were other reasons for the decline. The NTA Administrator Robert L. Seares said the shutdown of Mighty Corp., which used to buy about 6.5 million kg of low-grade tobacco, had also contributed to the decline in tobacco production this year. The tobacco interests of Mighty Corp. have since been acquired by Japan Tobacco.

    And Mario E. Cabasal, president of the National Federation of Tobacco Farmers, Associations and Co-operatives, said the grading practices of some companies had discouraged farmers from planting tobacco.

    “We do have floor prices [official minimum prices] for tobacco produce but grading them is a different matter,” he was quoted as saying. “Graders tend to downgrade the quality of the produce to buy it at a lower price.”

    Cabasal said the floor price for tobacco of the highest grade, or ‘AA’ tobacco, was P81 per kg. “Most farmers get only ‘A’, which carries a lower price,” he said. “This prompts them to stop planting or to reduce the area devoted to tobacco.”

    NTA figures indicate that the number of tobacco farmers declined to 43,625 last year from 46,531 in 2015, while the ‘tobacco harvest area’ fell by six percent to 30,648 ha.

  • Growers told to up quality

    Growers told to up quality

    Tobacco farmers in the northern part of Luzon, the Philippines, are being encouraged to improve the quality of their produce to ensure they earn higher incomes, according to a Philippine News Agency story of September 6.

    This is even though the president of the National Association of Tobacco Farmers, Associations and Co-operatives Mario Cabasal was quoted on the same day in the Business Mirror as saying that graders tended to downgrade the quality of the tobacco to buy it at a lower price (see story Leaf production down).

    Growers, cigarette manufacturers, and tobacco dealers and exporters have been meeting to negotiate the floor prices for growers’ tobacco.

    The floor price is said to be the minimum price allowed by the government. It is said to be based on the prevailing market conditions, such as production costs, a ‘reasonable’ margin of profit for stakeholders, and growing conditions.

    The news agency story said the National Tobacco Administration (NTA) was pushing for a contract growing scheme to ensure a fair tobacco market.

    And it said Cabasal hoped to arrive at a fair market price.

  • Growing pollution in China

    Growing pollution in China

    China is expected to expand its use of environment-damaging plastic film to boost crop production, according to a Bloomberg News story.

    The film traps moisture and heat, and helps control weeds and pests. It reduces water demand by 20-30 percent and it enables crops to be grown in both drier and colder environments.

    It is used as a mulch over 12 percent of China’s farmland and on 93 percent of the country’s tobacco fields.

    Overall, about 1.45 million metric tons of polyethylene are spread in sheets across 20 million ha (49 million acres) — an area about half the size of California — of farmland in China.

    And use of the translucent material might exceed two million tons by 2024 and cover 22 million ha, according to Yan Changrong, a researcher with the Chinese Academy of Agricultural Sciences in Beijing.

    The downside is that polypropylene film is not biodegradable and often not recycled.

    Potentially cancer-causing toxins that can be released into the soil from the plastic residue are said to be present at levels of 60-300 kg per ha in some provinces.

    While polyethylene contamination occurs worldwide, the threat is especially acute in China, where about a fifth of arable land contained levels of toxins exceeding national standards, according to 2014 government estimates.

    The Bloomberg story is at: https://www.bloomberg.com/news/articles/2017-09-05/plastic-film-covering-12-of-china-s-farmland-contaminates-soil.

  • $14 a year is not enough

    $14 a year is not enough

    The International Union of Food, Agricultural, Hotel, Restaurant, Catering, Tobacco and Allied Workers’ Associations (IUF) has passed a resolution aimed at guaranteeing farmworkers the right to collective bargaining, according to a story by Stephanie Carson for Public News Service, relayed by the TMA.

    And later this month, Farm Labor Organizing Committee (FLOC) members will vote on a proposed boycott of Reynolds American products to protest against the working conditions. FLOC, according to Wikipedia, is a labor union representing migrant farm workers in the Midwestern US and North Carolina.

    FLOC member Catherine Crow said there were a lot of issues in North Carolina, most of which had to do with farmworkers having a lack of representation and a lack of freedom of association.

    This meant that farmworkers risked losing their jobs if they came across and spoke out against issues such as wage theft, poor housing conditions, and poor working conditions.

    They had no job security.

    Crow said that since RJ Reynolds, the parent company of Reynolds American, offered products other than tobacco, the boycott would extend to other areas including electronic cigarettes.

    “[W]e’re going to be looking to target the companies that sell that product as well, like 7-Eleven and other convenience stores,” Crow said.

    Meanwhile, earlier this year, FLOC representatives reportedly challenged British American Tobacco during its Annual General Meeting (AGM) in London over what FLOC described as human rights abuses on BAT contract farms.

    In a note on its website, FLOC said that BAT, which at the time was planning to pay US$49 billion to complete its acquisition of Reynolds American, was asked about its failure ‘to be transparent and take concrete action despite numerous reports detailing human rights abuses’ on its contract farms.

    This year was said to have marked the seventh year that FLOC had attended the shareholders meeting.

    ‘During the 2014 AGM, BAT chairman Richard Burrows claimed that there were no labor or human rights violations in the BAT supply chain,’ the note said.

    ‘Since then, independent research groups including SwedWatch and Human Rights Watch have published reports detailing serious human rights abuses on BAT contract farms in Bangladesh and Indonesia respectively, echoing what FLOC has been reporting for years from the fields of North Carolina.

    ‘In BAT’s own corporate audit report, they admitted instances of worker death by heat stroke, workers being sprayed by pesticides, and poor housing conditions, among other issues.’

    After the meeting, FLOC leaders were said to have met directly with BAT executives to discuss the issues and ‘real solutions’ in more depth.

    But FLOC said that while BAT had stated that it had wanted to work with FLOC to resolve issues in the BAT supply chain, human rights violations would continue until BAT agreed ‘to guarantee freedom of association and implement a practical mechanism that allows farmworkers to denounce abuses and act as their own auditors.’

  • Zimbabwe prices flat

    Zimbabwe prices flat

    The average price paid to Zimbabwe’s growers this season for their flue-cured tobacco, at US$2.96 per kg, is the same as was paid last season, according to a Zimbabwe Herald story.

    Growers this season were paid US$557.1 million for 188.0 million kg of tobacco, while last season they were paid US$595.9 million for 202.2 million kg.

    The Herald story seemed to suggest that the leaf tobacco sales season was still in progress, describing how tobacco farmers had ‘so far grossed…’. It said also that flue-cured tobacco production was ‘likely to miss its projected target of 205 million kg’.

    An earlier story had it that a clean-up sale was to be held on August 11. But a New Zimbabwe story in the middle of August had it that sales had totaled 185.6 million kg; so clearly 2.4 million kg of sales had taken place between the New Zimbabwe and the Herald reports.

    The lower crop this season came about even though the number of new growers was said to have increased by 103 percent, seed sales were said to have gone up by 331 percent and, according to the Zimbabwe Farmers’ Union, the area planted to tobacco had been increased.

  • The die is cast

    The die is cast

    Tobacco growers in the US states of Kentucky and Tennessee are being encouraged to switch to producing indigo as a ‘viable economic alternative’ to tobacco, according to a Forbes story relayed by the TMA.

    In an interview, Sarah Bellos, founder of the bio-based dye start-up company, Stony Creek Colors, told Forbes that US tobacco growers were losing contracts due to the declines in smoking prevalence.

    Bellos said that her company contracted the growers at the beginning of the season with what looked like a tobacco contract.

    But Stony Creek Colors took more of the weather-related risk. “We pay them on a per-acre basis versus paying per ton,” she said. “A farmer doesn’t have a good way of projecting crop yields until after several years. We will move towards performance-based pay over time.”

    Bellos added that harvesting tobacco was very labor intensive and by switching to indigo, growers “could benefit from a sustainable crop that doesn’t require nitrogen and can attract beneficial insects”.

  • Leaf tax to remain

    Leaf tax to remain

    Chinese lawmakers began yesterday a review of a draft law on leaf-tobacco tax, according to a Xinhua Newswire story.

    The law is due to replace a regulation that has been in place since 2006, but it is not expected to alter the rate of tax levied on leaf.

    The draft law was given a first reading at a five-day bimonthly session of the National People’s Congress Standing Committee, which opened on Monday.

    The law stipulates that a tax rate of 20 percent will be levied on tobacco leaf buyers, the same rate as was levied under the previous regulation.

    China began collecting tax on leaf tobacco sales in 2006.

    Revenue from the tax was said to have increased by an average of 12 percent between 2006 and 2016 and to have totaled 109.7 billion yuan (US$16.6 billion) during that period.

  • Malawi average ‘good’

    Malawi average ‘good’

    Malawi’s 2017 leaf-tobacco grower-prices have been described as ‘good’ by the Tobacco Control Commission’s (TCC) CEO David Luka, according to a story by Grace Phiri for The Nation.

    “This season has run smoothly with no market interruptions as well as low rejection rates averaging between 10 and 20 percent,” Luka was quoted as saying.

    “Again, prices were good this season as on average the leaf fetched $2.00 (K1,466) per kg against last year’s $1.50 (K1,099) per kg,” he said.

    However, while this year’s average price might have been up on that of last season, which was poor; there seems to be a question mark over what were the prices in 2017 and 2016. The story seems to give the grower revenue for 2017 as US$212 earned from the sale of 124 million kg, which would suggest an average price of US$1.71 per kg. And the 2016 revenue on the sale of 194 million kg is given as US$275 million, which suggests an average price of US$1.42 per kg.

    The average price of US$2.00 per kg cannot be explained as being the average price for one of the tobacco types because the story gave the various averages as: US$1.36 for dark fired tobacco, US$1.80 for Burley, and US$2.92 for flue-cured.

    Even at US$2.00 per kg, the average price was down on that of 2013, for instance, when it stood at US$2.11 per kg, according to an APA News Agency story.

  • US urged to probe BAT

    US urged to probe BAT

    The Campaign for Tobacco-Free Kids (CfTFK) is urging the US Department of Justice and the US Securities and Exchange Commission to investigate British American Tobacco and its subsidiaries for possible violations of the anti-bribery and accounting provisions of the Foreign Corrupt Practices Act (FCPA).

    The CfTFK) said in a note posted on its website that it had requested the investigation following new allegations about the conduct of BAT in Africa published on Friday by the UK-based newspaper, The Guardian.

    ‘British American Tobacco has faced mounting allegations that the company engaged in widespread bribery and corruption in Africa to gain advantage over competitors and stifle government efforts to curb smoking,’ the CfTFK note said. ‘Earlier this month, the UK Serious Fraud Office (SFO) formally launched an investigation of BAT on suspicions of corruption.

    ‘An investigative report published today [Friday] by The Guardian revealed new allegations that, for years, BAT secretly and possibly illegally moved millions of US dollars in cash across international borders into the war-torn Democratic Republic of Congo (DRC) allegedly to support the company’s tobacco leaf operations in that country. The new allegations indicate BAT’s operations included engaging with armed rebels involved in the long-standing DRC conflict in order to make secret cash drops used to pay for tobacco leaf from farmers in Auzi, an unmapped town BAT built in the 1950s, according to The Guardian.

    ‘In addition to possible violations of the FCPA, The Guardian report raises questions about whether BAT’s conduct in moving US dollars during the DRC conflict also violates federal anti-money laundering laws, especially as the US has had sanctions in place against the DRC since 2006.’

    Later in its note, the CfTFK said the growing allegations about BAT’s conduct were particularly alarming following the July 2017 merger of BAT and Reynolds American in the US. ‘The recent merger places BAT in a leading position in the US market and, according to BAT, created the largest tobacco company in the world by operating profits,’ the note said.

    Meanwhile, BAT said on August 1 that it intended to co-operate with the UK Serious Fraud Office investigation.

    ‘As previously announced, we are investigating, through external legal advisers, allegations of misconduct,’ the company said in a note posted on its website.

    ‘We have been co-operating with the Serious Fraud Office (“SFO”) and British American Tobacco (“BAT”) has been informed that the SFO has now opened a formal investigation.

    ‘BAT intends to co-operate with that investigation.’

    The CfTFK note is at: http://www.tobaccofreekids.org/press_releases/post/2017_08_18_bat.

    The Guardian story, by Sarah Boseley, is at: https://www.theguardian.com/world/2017/aug/18/british-american-tobacco-cigarettes-africa-middle-east.