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Value Chains in Agriculture COMESA Business Forum 20-21 November 2012

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Value Chains in Agriculture COMESA Business Forum 20-21 November 2012 What is tobacco? * What is tobacco? * Why farmers want to grow tobacco Tobacco has an organized ... – PowerPoint PPT presentation

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Title: Value Chains in Agriculture COMESA Business Forum 20-21 November 2012


1
Value Chains in Agriculture COMESA Business
Forum 20-21 November 2012
2
What is tobacco?
3
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

4
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

5
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

6
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

7
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

8
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

9
What to grow?
10
How tobacco farmers are supported
  • Growers are organized into clubs/groups of 15-30
    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

11
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

12
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

13
How can we partner to support COMESA farmers?
  • ?

14
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

15
Challenges of the Sector
  • Disconnect between international policy proposals
    and socio-economic realities, regional national
    strategies/laws on agriculture, trade, fiscal
    development and public participation in policy
    formulation
  • Lack of evidence and science based regulation
    that takes into consideration both health and
    trade obligations of the Member States
  • Policy formulation before undertaking robust
    impact assessments on socio-economic development,
    revenue, trade and agriculture
  • Conflict between the FCTC proposals and other
    multilateral obligations such as WTO, EAC,
    COMESA, AU e.g. Canada, Brazil and Australias
    cases at the WTO
  • Lack of proper consultative mechanisms involving
    all stakeholders with fair representation and
    participation of affected sectors at all
    international, regional and local fora

16
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

17
Thank you for your interest
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