ZTA President’s year-end message
Dear Valued Member
As the year draws to a close, many will look back on 2024 with mixed feelings. All too often I’ve heard it said that it is a year that we wish to put behind us and move on, for various reasons. Last season saw much needed price increases on the floors but for many, these prices contributed to covering the many shortfalls in strained cash flows and unfortunately seemed to do little to boost morale. So why do we keep at it? The answer is simple really, with the investment in infrastructure, time and effort, it is hard to walk away. There is the thought that some of our decisions are governed by the sunk cost fallacy. This phenomenon describes how a person or business is reluctant to walk away from a deal or stop trading a certain way because of the time, resources and effort invested into the project, despite the fact that it would make financial sense to do so.
There are many issues that are out of our control and unnecessary worry about such is a pointless exercise. If we are to continue successfully and viably growing tobacco, we need to ensure that everything we do is done to the best of our ability, as efficiently as is humanely possible and reduce the risk of non-performance by making sound decisions in a timely manner.
2024/25 has proven to be an exceptionally difficult start to the season. Low rainfall last season resulted in poor early land-prep and as a result, poor moisture conservation. Low dam levels and almost non-existent power supply have meant irrigation scheduling has been difficult to impossible to implement. Weather patterns are unpredictable, despite the plethora of weather apps and prediction monitors. The whole country is buckling under the effects of severe moisture stress. Those in the grain belt who were lucky to plant early with rains in October are now watching with despair as the maize shrivels and dies before their eyes. Some have had to replant whilst others are yet to receive sufficient planting rain.
Luckily for tobacco, it is an extremely resilient crop and can flourish in a below average rainfall season. It is up to us, as growers though, to make sure we’ve done everything we can to mitigate the effects of the ravaging drought. Long dry spells, such that we’ve experienced allow growers the chance to catch up on all the necessary work. Lands should be weed free, insecticide sprays must be applied correctly to ensure their efficacy, topping must be done well and chemical applied efficiently to ensure there is no competition for vital moisture from suckers. No water should be permitted to run out of our fields and tie ridges or potholes should be the order of the day. Should the season turn out to be a wet one, these can always be broken to allow fields to drain.
Perhaps the most useful resource that is available to every grower is the Kutsaga-TRB produced Tobacco Hand-book. This valuable guide to tobacco production should be in every farm office and the electronic copy has been sent to all members on WhatsApp. It should be consulted often, or at least at the beginning of each new operation. It contains vital information for producing acceptable tobacco under most conditions and has been compiled from research results and information accumulated over many years of production. In a tough year like this, the hand-book may be the difference between producing acceptable, saleable leaf or producing something unacceptable to the trade and their customers.
Recently, ZTA, in conjunction with Lozino held spraying technique demonstrations. It was a real eye-opener to physically witness the various spray patterns and their effective cover. I for one have fallen short of the mark of excellence that we should aim for when it comes to effective spraying techniques. Perhaps one of our greatest strengths as a group is our combined experiences and accumulated knowledge. It is only by attending Discussion Groups and active participation that we can share and benefit from this immense grower knowledge. As we tackle the new year and curing this difficult crop gets into full swing, I encourage growers to get out and attend district discussion groups. Sometimes just sharing similar experiences and ideas with other growers can boost morale and give one the impetus to continue.
The top producers all appear to carry similar traits. They have an excellent appreciation of the basics of tobacco production and carry out practices on time and to a very high standard. Attention to detail is excellent. There are no secrets or Silver Bullets and all growers can and increasingly aspire to attain such levels of excellence.
Growers, now, more than ever need to be acutely aware of their cashflows, budgets, loan accounts and their ability to repay their borrowings. As this season unfolds, only we can maximize the returns by paying particular attention to those things which we can control. One of the most important aspects of this production cycle is what we spend and how we spend it. This is within our control and must not be taken lightly or ignored. Again, I encourage growers to pay particular attention to this vital aspect of production. It is far better to anticipate a cashflow problem than ignore it until it is too late. All too often we throw caution to the wind and expect good prices or a twist of fate to intervene in tough seasons, rather than being proactive and taking control of our own spending.
Whilst traditionally a tobacco cashflow would cover the period from April or May of one year and extend into August the following year, recently there have been efforts to concertina this borrowing period to a mere nine to ten months. In order to achieve this, barn door grading is necessary without compromising the presentation of the crop for our customers. This comes at a time when cash-flows are stretched to the maximum and patience is running thin. Despite the many challenges, it can be done and wherever possible should be embraced to avoid unnecessary losses and interest charges. The savings and improved cash flow benefits can be immense. I hope that as this idea evolves, the Trade will see the benefit to the growers and indeed themselves and start to embrace this necessary change to the way we have done things in the past.
We recently attended a ZESA stakeholders interface meeting, with presentations led by Chairman, Dr Sydney Gata. Ostensibly to meet the agricultural sector, present the vision for how the Utility intends to curb the power crisis and hear our issues and challenges in the sector. If The Utility can successfully implement all the proposed projects and power station plans, Zimbabwe will be a net exporter of power into the region in the next two years. A lot has to fall into place before then and as growers, we need to cure this current crop. The timelines given, whilst ambitious, don’t favor us immediately. Having advised previously to control spending, I firmly believe that money spent on solar for curing will be money well spent. ZTA along with our fellow unions continue to highlight the need to remove VAT on solar equipment in order to make this more a palatable undertaking. As I have mentioned previously, it makes no sense to burn diesel to generate power. Rather invest that money in solar.
For those fortunate enough to plant early irrigated crops, the late start to the season has meant a delayed start to reaping and curing for some. This may result in a reaping clash between early and late crops in the next few month. Make sure your barns are in good working order and make sure you have the labour to fill them. Perhaps consider approaching your financiers and sensitizing them to this potential predicament and increased cash-flow requirement. Nothing can be more soul destroying than having curing space but no labour to fill the barns.
For those growers who have come this far and have had all their hard work destroyed in a few minutes by hail, wind or rain, I extend my heart felt commiserations. It is extremely depressing to see a crop that has been hit by a storm after all the effort, time and resources put into the crop. I trust that your hail insurance was in order and the assessments have been fair. Without hail insurance, it would not be possible to grow this crop and it is a sector of the industry that needs to be preserved by healthy competition.
There is a crop potential of 300 million kilograms and with other competing global producers also forecasting increased crop sizes, we may be moving into an oversupply situation. Under this scenario it becomes even more important to produce a high yielding, well presented, quality crop.
Key industry stakeholders met recently to discuss issues around early deliveries and classification and earlier opening of floors in 2025. Every contractor is differently placed on these issues but the underlying determinant of final decisions made should always be: ‘what is in the growers best interests?’. During the year, there have been various campaigns to highlight the need for increased sustainability of our growing crop production and these need to be turned into action on the ground urgently!
The ZTA Office will close for a break on Friday 20th December 2024 and reopen on Monday 06 January 2025. However, the ZTA PG and team will still be available during this period to attend to members and industry issues. Please do not hesitate to reach out to us.
I wish everyone a peaceful and wet Christmas with the hope that your every efforts will be rewarded by satisfactory prices on the floors.
Best wishes,
Graham Ross
ZTA President
20 December, 2024