Transcript Tobacco Value Chain- COMESA business forum 2012 11 12 final

Value Chains in
Agriculture
COMESA Business Forum
20-21 November 2012
What is tobacco?
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What is tobacco?
• Tobacco is an annual field crop
• It is grown in rotation with other crops using Good
Agricultural Practices
• Tobacco Growers are therefore mixed farmers
producing several other crops
• Tobacco as a cash crop is the platform making the
growth of other crops possible
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Why farmers want to grow tobacco
• Tobacco has an organized supply chain which
provides inputs, agronomic extension, and a ready
market
• Tobacco provides the cash flow which allows
farmers to diversify into other crops
• The other crops do not provide the same profit that
tobacco does
• Like any other producer, farmers need a market
for their goods
• This is lacking for most other crops
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The value of tobacco farmers
• +/- 1 million farmers in COMESA countries
• Producing maize, soybean, groundnuts,
cassava, vegetables
• +/- 0.5 million hectares
• Insufficient markets and value-adding
processing exists for these products
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Some figures for tobacco
Several independent studies have analysed the
competitiveness of different crops:
• In only five COMESA countries the farm-gate value of
tobacco production is US$ 875 million
• For three COMESA countries (Malawi, Zambia,
Zimbabwe), tobacco counts for 14-50% of their
agricultural GDP
• In six COMESA countries (Ethiopia, Kenya, Malawi,
Uganda, Zambia, Zimbabwe) there are 951,600 tobacco
farmers
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Some figures for other crops
In these six COMESA countries (Ethiopia, Kenya, Malawi,
Uganda, Zambia, Zimbabwe) there is also production of
approximately:
• 3 million MT beans & peas of various types
• 16 million MT maize
• 11 million MT cassava
• 11 million MT plantains
• 5 million MT potatoes
• 0.8 million MT groundnuts
• 0.5 million MT sesame seed
There is very little, if any, added value or organized market
for these crops
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The pressure on tobacco
• Regardless of its advantages, tobacco as a crop
is under great legislative pressure
• Many governments look for increased
diversification
• At the same time many governments rely on
tobacco for employment in rural areas, foreign
exchange and revenues
• Farmers would be happy to diversify more but
they do not have a similar alternative market
chain for other crops
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What to grow?
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How tobacco farmers are supported
• Growers are organized into clubs/groups of 1530 farmers
• Clubs are supported by tobacco extension
services
• Registration involves accurate collection of
Grower data for storage and use in a Grower
data base
• Inputs distributed
• Crop production monitored and recorded
• Tobacco provides the cashflow
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An example of what databases offer
• GPS farm location
• Hectarage under cultivation
• Production capital – inputs, barns, equipment,
etc.
• Number of people living and working on the farm
• Crop forecast
• Monitoring of labour practices
• Forestry progress
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The value of market knowledge
• Grower data base developed by the tobacco sector provides
advance knowledge of crop production plans
• Assists other organizations to source produce and arrange
markets for non-tobacco crops
• Information can be shared to help:
the establishment of food processing units
transporters to establish logistics network to move
produce
establish market centers
the development of suitable export produce
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How can we partner to support
COMESA farmers?
?
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Possible opportunities
• Enabling legislation environment
• Support to create trade flow of other crops
based on mapping of tobacco production
• Create warehousing network
• Creation of small local processing units to add
value
• Animal husbandry
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Challenges of the Sector
a) Disconnect between international policy proposals and socioeconomic realities, regional & national strategies/laws on
agriculture, trade, fiscal development and public participation in
policy formulation
b) Lack of evidence and science based regulation that takes into
consideration both health and trade obligations of the Member
States
i.
Policy formulation before undertaking robust impact
assessments on socio-economic development, revenue, trade
and agriculture
c) Conflict between the FCTC proposals and other multilateral
obligations such as WTO, EAC, COMESA, AU e.g. Canada,
Brazil and Australia’s cases at the WTO
d) Lack of proper consultative mechanisms involving all stakeholders
with fair representation and participation of affected sectors at all
international, regional and local fora
Recommendations
1. Need to recognize pivotal role of tobacco farmers in the rural economy, their
skill level and as engine of diversification
2. Need to capitalize on the tobacco supply chain for what it can offer in terms
of good agricultural practices and labour practices
3. Opportunity to discuss with COMESA CBC and with the tobacco supply
chain how to build non-tobacco value chains
4. Need to prevent discriminating measures against tobacco farmers that will
prevent any competitive advantage.
5. Need for COMESA to follow closely the developments in tobacco regulation
by applying for Observer Status at the FCTC
6. Compatibility of the FCTC proposals with other multilateral obligations such
as WTO, EAC, COMESA, AU
7. Policy formulation taking into consideration international regulatory best
practices and implemented as pragmatic technical regulations that balance
all multi-lateral commitments
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Thank you for your interest
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