By Daniel Chigundu (With Support from ZELA)
Tobacco is a plant grown for its leaves, which are dried and fermented before being converted to various products that range from cigarettes, cigars, pipes, chewing tobacco, e-cigarettes, snus or tobacco pouches, among others.
The growing of tobacco especially in Zimbabwe over the years has helped to change fortunes for the farmers, especially the lives of many small scale farmers who are beneficiaries of the land reform exercise.
Farmers who are turning to tobacco farming are growing in number with each season, attracted mainly by the instant and readily available proceeds which are mostly in United States dollars, unlike the situation with cotton and maize, where farmers have to wait a bit to be paid and are sometimes paid through the local currency which is affected by exchange rates.
The success of tobacco growing has not come without casualties in Zimbabwe, as the majority of small scale farmers depend on wood in their rudimentary barns to cure their tobacco for the market.
Curing of tobacco is a term used to describe the drying process that is performed after tobacco leaves have been harvested from the fields. The process entails four essential steps: wilting, yellowing, colouring, and drying.
Experts say curing plays a major role in defining the final quality and character of the tobacco leaf, and these are the two major factors in determining selling prices at the auction floor where tobacco is sold.
There are basically three most common methods of curing tobacco that are used, which are by air, by fire, and by flue.
In Zimbabwe most of the small scale farmers use the flue-curing method where their major source of fuel for the barns is indigenous tree wood. This wood largely comes from the forests around the farming areas, resulting in deforestation and forest degradation in these tobacco growing areas.
According to the Forestry Commission, curing tobacco requires about 3 million m3 of fuel wood.
The annual aggregate rate of forest loss in Zimbabwe as at 2017 was said to be around 262 349 hectares, with 35 000 hectares (about 20%) being attributed to tobacco production value chain.
Tobacco production value chain entails such things as land clearing, and excessive use of indigenous trees as firewood for tobacco curing, in the four tobacco-growing provinces. Forestry Commission is of the view that most tobacco farmers understate the cost of tobacco curing energy input as they deliberately avoid investing in it.
The tobacco -growing provinces in Zimbabwe are mainly Mashonaland Central, Mashonaland East, Mashonaland West and Manicaland.
In the past 9 years (2015 to 2023), the Tobacco Industry and Marketing Board (TIMB) says about 2 005 486 535 kgs of tobacco have been sold in the country generating about US$5 602 275 536.
However,the growing of tobacco although it brings in huge sums of money, is unsustainable due to its contribution to deforestation in Zimbabwe.
Irked by the rate of deforestation in the country, the government of Zimbabwe established the Tobacco Levy in 2015, to fund afforestation and reforestation activities in forests degraded by tobacco growing activities.
The tobacco levy which is now called Afforestation Levy is charged to tobacco buyers at 1.5% of gross amount collected from the buyer.
This money is supposed to be used to replenish the trees that are cut in the process of growing and curing of tobacco. Part of it is supposed to be used to fund research on alternatives that can be used to substitute wood.
Zimbabwe Revenue Authority (ZIMRA) as the country’s chief tax collector, is charged with collecting the Tobacco levy.
However, efforts to get the exact figure of the Tobacco Levy collected from 2015 to 2023 proved difficult, as ZIMRA did not respond to questions sent to them.
The questions were sent on the 12th of September 2023, and ZIMRA confirmed on the 13th of September 2023, that they had received them and were actioning them.
However, efforts to get the responses became frustrating as ZIMRA kept giving excuses, and promises week in and week out.
By the time of publishing the article (6 November 2023), ZIMRA had not responded to the questions and were ignoring inquiries.
However, according to the annual reports which are on their website, in 2015, ZIMRA collected US$17 828 239, in 2016 US$13 787 338, in 2017 US$13 707 984.44, in 2018 US$47 652 330, in 2019 ZW$61 724 602.45, in 2020 ZW$406 022 395.57, in 2021 ZW$0.802 billion, and in 2022 ZW$4.41 billion as Tobacco Levy.
|YEAR||TOBACCO KGS SOLD|
|TOBACCO LEVY COLLECTED|
source: ZIMRA Annual Report
| TOBACCO LEVY DISBURSEMENTS|
source: Forestry Commission Annual Report
|2015||198,954,849||586,544,231||US$17 828 239||Not disbursed to forestry Commission|
|2016||202,275,688||595,927,523||US$13 787 338||Not disbursed to Forestry Commission|
|2017||188,920,313||559,204,126||US$13 707 984. 44||Not disbursed to Forestry Commission|
|2018||252,603,251||737,431,247||US$47 652 330||Not disbursed to Forestry Commission|
|2019||259,492,611||526,732,734||ZW$61 724 602.45||ZW$13 000 000|
|2020||184,042,292||459,667,154||Zw$406 022 395.57||ZW$138 000 000|
|2021||211,120,929||589,748,355||$0.802 billion||Not disbursed to Forestry Commission|
|2022||212,718,938||650,321,805||ZW$4.41 billion||No disbursement data|
|2023||296,057,664||896,698,361||No disbursement data|
Ministry of Finance and Investment Promotion is responsible for the allocation and disbursement of the funds to the relevant government institutions such as the Forestry Commission, and the Tobacco Research Board, among others.
Efforts to get information on how much was disbursed from the Tobacco Levy that was collected from 2015 to 2023, did not yield any results, as Ministry of Finance did not respond to questions sent to them.
The questions were sent to Ministry of Finance on the 20th of September. When we checked for the response on the 10th of October, they said the inquiry had been forwarded to the relevant department. Since then, Ministry of Finance has been ignoring inquiries.
However, Forestry Commission which is tasked with leading afforestation efforts and should be one of the biggest beneficiaries of the Levy, indicated in its annual report that although the levy was introduced in 2015, it only started receiving disbursements in September of 2019, which is about almost five years later.
In 2019, Forestry Commission received ZW$13 million in tranches of ZW$6 million and ZW$7 million, and ZW$138 million in 2020.
The Forestry Commission of Zimbabwe did not receive disbursement from the Tobacco Levy in 2021 as well, although it had budgeted for about ZW$185 million.
Efforts to check whether there are audits that have been done with regards to the Tobacco Levy, its collection, disbursement and usage did not yield any result as the Office of the Auditor General (OAG), just like ZIMRA and Ministry of Finance did not respond to questions sent to them.
Questions were sent to Office of the Auditor General on the 7th of September. However, they requested that questions be sent to a new email address, which was done on the 19th September, and they acknowledged receipt on the 20th adding that the enquiry had been forwarded to the Acting Auditor General and a response will be provided soon.
A follow up was made on the 3rd of October, on the 4th of October they responded that a response will be given once it is ready, but by the 6th of November the response had not yet been provided.
Forestry Commission of Zimbabwe has generally done its best with the little funds it has received from the Tobacco Levy to embark in afforestation activities.
In an interview, Violet Makoto from Forestry Commission of Zimbabwe indicated that funds disbursed from the Afforestation funds have gone a long way in boosting tree nurseries, but added that the rate of deforestation is much bigger than afforestation efforts.
‘’The rate of cutting trees surpasses the rate of tree planting by far, but tree planting in combination with other forest restorative activities that allow for the natural regeneration of indigenous forests is our strategy and effort to strike a balance between what we are losing and what we are putting back.
‘’The afforestation fund disbursed through treasury has been utilised to boost the nursery base for tree planting programs, in setting up of nurseries to propagate more seedlings to meet demand as well as finance Forestry Commission operations related to seedling production.
‘’This has enabled us to timeously distribute seedlings of fast growing species of trees to farmers so that they establish eucalyptus woodlots to support future wood-fuel requirements for tobacco curing,’’ she said.
The Forestry Commission of Zimbabwe has used part of the money disbursed from the Afforestation Levy (2019, 2020 and 2022) to establish 10 tree nurseries (Manicaland 3, Mashonaland East 3, Mashonaland Central 2, and Mashonaland West 2).
Each of the 10 nurseries has a capacity to produce approximately 1 million seedlings for the afforestation and reforestation programs that the commission is running.
The tree seedlings are given out for free, to farmers who work with Forestry Extension Officers providing the necessary extension services. Farmers are registered either as individual farmers or as groups for community woodlots.
Conclusion: Will the Forests Recover from tobacco?
Considering the amount of deforestation that is happening in the country, the introduction of the Tobacco Levy is a positive step in the right direction. However, failure by the ministry of finance to disburse the funds is worrisome, as it defeats the justification for the introduction of the fund in the first place.
Failure to disburse the funds to the relevant institutions such as Forestry Commission from 2015 to 2018, and 2021 has allowed the rate of deforestation to surpass restorative efforts.
There is need by the Ministry of Finance to explain why the Tobacco Levy was not disbursed from 2015 to 2018 and also in 2021 and also highlight what the money was used for otherwise it will be difficult to justify the existence of the levy (Tobacco Levy) when the trees are not growing at the same rate with deforestation.-(Produced with support from ZELA)