by
Chinese
demand, Zimbabwe produced
a
record
352.7
million
kilograms
of
tobacco
–
valued
at
about
US$1.2
billion
–
in
last
year’s
marketing
season.
This
represents
a
major
turnaround
for
an
industry
that,
if
not
for
Chinese
investment,
would
have
nearly
collapsed
two
decades
ago,
although
it
remains
a
crop
of
concern
for
health
campaigners.
As
Zimbabwe’s
largest
agricultural
export
and
a
primary
foreign
currency
earner,
tobacco
dominates
its
trade
with
Beijing.
Last
year,
China
imported
US$790
million
of
the
“golden
leaf”,
accounting
for
31
per
cent
of
its
total
imports
from
Zimbabwe,
according
to
the
Chinese
embassy
in
Harare.
Gorden
Moyo,
director
of
the
Public
Policy
and
Research
Institute
of
Zimbabwe
(PPRIZ),
attributes
these
production
levels
to
Chinese
involvement,
specifically
by
Tian
Ze
Tobacco
Company
(TZTC).
“It
provided
financial
support
through
low-interest
loans,
zero
mark-up
on
inputs
and
technical
assistance
to
scores
of
contract
farmers,”
said
Moyo,
a
former
minister
of
state
enterprises.
The
intervention
proved
vital
after
the
industry
was
brought
to
its
knees
following
the
land
reforms
of
the
era
of
former
leader
Robert
Mugabe
that
led
to
the
exit
of
white
commercial
farmers
and
subsequent
targeted
Western
sanctions.
According
to
the
country’s
Tobacco
Industry
and
Marketing
Board
(TIMB),
yields
plummeted
from
260
million
kilograms
in
1998
to
a
record
low
of
48
million
kilograms
by
2008.
As
Western
financing
dried
up,
China
offered
to
revive
Zimbabwe’s
tobacco
industry
as
Beijing
moved
to
secure
supplies.
A
turning
point
arrived
in
2005
when
Harare
signed
a
memorandum
of
understanding
with
the
China
National
Tobacco
Corporation,
paving
the
way
for
Tian
Ze,
a
subsidiary
of
the
corporation.
This
state-owned
monopoly
pioneered
a
contract
farming
model
that
provided
smallholder
growers
with
resources,
mechanisation,
low-interest
loans
and
guaranteed
purchases
from
smallholder
growers.
The
Chinese-led
approach
reshaped
the
industry
from
a
few
hundred
large-scale
estates
into
more
than
140,000
small-scale
growers.
TIMB
CEO
Emmanuel
Matsvaire
last
month
said
Chinese
investors
had
stepped
in
and
transformed
the
sector
by
increasing
production
volumes
from
a
record
low
of
about
40
million
kilograms.
“When
the
Chinese
arrived,
they
provided
funding
for
infrastructure,
mechanisation
and
direct
inputs.
Prices
began
to
rise;
the
Chinese
demand
and
appetite
for
tobacco
also
improved
the
prices
offered
to
tobacco
growers,”
Matsvaire
said
in
a
documentary
released
last
month
to
mark
45
years
of
China-Zimbabwe
relations.
Ethel
Hamadziripi,
production
manager
at
Tian
Ze
Tobacco,
noted
that
following
land
redistribution,
local
farmers
had
lacked
the
means
to
self-finance.
“This
is
when
Tian
Ze,
facilitated
by
diplomatic
relations,
stepped
in
to
begin
funding
our
local
farmers,”
she
said
in
the
documentary
while
referring
to
the
period
when
Mugabe’s
government
compulsorily
acquired
land
from
white
commercial
farmers
to
redistribute
it
to
landless
black
Zimbabweans.
The
partnership
serves
both
nations:
Zimbabwe
is
Africa’s
top
producer
while
China
secures
a
steady
supply
for
its
massive
domestic
market.
Kai
Xue,
a
Beijing-based
corporate
lawyer
who
advises
on
foreign
direct
investment
and
cross-border
financing,
highlighted
the
scale
of
the
Chinese
monopoly,
which
reported
a
combined
tax
and
profit
contribution
of
1.6
trillion
yuan
(US$232
billion)
in
2024.
“At
that
scale,
it
is
easy
to
see
why
the
Chinese
tobacco
market
sources
tobacco
from
Zimbabwe,
Brazil,
Argentina
and
other
producers
outside
China,”
Xue
said.
He
added
that
diversifying
the
supply
also
helped
manage
weather-related
risks
that
could
affect
production
in
any
single
country
in
a
given
season.
Despite
the
growth,
critics
argue
the
contract
system
creates
debt
traps
and
public
health
issues.
Moyo
said
that
while
China’s
support
might
have
boosted
tobacco
production
in
Zimbabwe
by
offering
favourable
interest
rates
and
knowledge
to
contract
farmers,
“concerns
remain
about
high
input
costs,
low
tobacco
prices,
the
danger
of
losing
collateralised
property
and,
more
importantly,
the
escalation
of
health
problems
caused
by
smoking”.
“The
company
determines
the
loan
conditions
while
farmers
remain
rule-takers,”
Moyo
said.
However,
he
said
loans
from
local
banks
were
unviable
because
of
interest
rates
ranging
between
12
per
cent
and
17
per
cent.
“This
then
forces
farmers
to
surrender
themselves
to
Chinese
financing
models.”
Tian
Ze
has
said
its
prices
are
fair
and
that
it
provided
interest-free
loans
for
more
than
a
decade.
The
company
reportedly
introduced
a
4
per
cent
interest
rate
in
2023,
which
remains
significantly
lower
than
the
rates
charged
by
other
lenders.
Artwell
Kadungure,
director
of
the
Training
and
Research
Support
Centre
(TARSC)
in
Harare,
confirmed
that
contract
farming
was
a
vital
capital
source,
“yet
also
there
were
concerns
raised
with
such
arrangements,
such
as
inflated
prices
of
inputs,
debt
traps
and
so
on”.
economics,
the World
Health
Organization issues
regular
warnings
that
the
continued
expansion
of
tobacco
cultivation
undermines
global
public
health
efforts
to
cut
the
supply
and
consumption
of tobacco
products.
Zimbabwe’s
focus
on
tobacco
production
creates
difficulties
for
bringing
about
the
WHO
Framework
Convention
on
Tobacco
Control,
which
it
ratified
in
2014.
Moyo
argues
that
while
celebrating
the
economic
implications
of
heightened
tobacco
production,
it
must
be
noted
that
China-Zimbabwe
tobacco
ties
–
with
one
a
producer
and
the
other
a
consumer
–
are
a
cause
for
concern
for
global
health.