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Big tobacco harvest not enough to save Zimbabwe's ailing economy

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Melanie Stetson Freeman/TCSM/File

(Read caption) In this February 2002 file photo, a worker gathers tobacco leaves for drying on a farm run by relocated Zimbabwe farmer Ben who is leasing 250 hectares to run a tobacco farm, Chimoio, Mozambique. Dozens of white farmers from Zimbabwe moved over the border into Mozambique and safer pastures after being threatened or having their farms occupied under Mugabe.

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For the first time since seizures of white farms in Zimbabwe the tobacco harvest has reached the level seen in 2001 of more than 200,000 metric tons (440 million lbs.) in the season through June 27. This, though, will have no significant impact on the ailing economy and early this week more damage was done when President Robert Mugabe said the remaining white-owned farms were to be seized.

“At the moment there will be no significant economic benefit from this rise in tobacco production,” says Monitor Global Outlook’s correspondent in Harare. “We have a problem: There is no equilibrium in terms of agricultural production. Virtually every farmer is growing tobacco rather than basic commodities that feed people like maize.”

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In spite of so many farmers growing the crop, they are unable to reach the volumes grown in the days of commercial farming because their farms are either too small, or the soil not the best for growing the high-quality Virginia leaf tobacco.

The tobacco crop brought in more than $650 million compared with nearly $600 million in the previous season. The season includes tobacco sold from February to the end of June.

Although an increase in production is good, it may not be the best for the country in the longer term as other crops could be grown more successfully in the varying soils that are now dedicated to the growing of tobacco. The relatively quick cash turnaround for tobacco is the reason for the output growth.

Sales grew, but the average price fell to $3.17 a kilogram from $3.70 last year. The tobacco is sold through a central tobacco sales organization that represents farmers and traders.

“Even though the prices [of tobacco] are down this year farmers want to grow tobacco as they get paid when they sell it. With maize, it is sent to the marketing board and then sold. This means farmers may only get paid eight months later. This is a problem for farmers who invest their own money,” says our correspondent.

The improvement in the tobacco yield comes as President Mugabe said July 2 that no land should be in the hands of white people.... For the rest of the story, continue reading at our new business publication Monitor Global Outlook.