Tobacco Asia

Volume 20, Number 5

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Page 53 of 67

54 tobaccoasia LEAF NEWS 烟叶新闻 INDONESIA Wet Dry Season Causes Losses for Farmers Tobacco farmers in the mountainous Merapi-Merbabu areas in Cepogo and Selo districts, Boyolali, Central Java are having a difficult year due to the wet dry season threatening to reduce the quality of their tobacco leaves, which may lead to severe price drops. A local farmer in Sanden Village, Cepogo, Boyolali, said, "This year's tobacco harvest yields are far from our expectations. Dried chopped leaves of tobacco were priced at Rp80,000 [US$6.07] per kilogram, but now they are selling at only Rp60,000." Another farmer predicted that all tobacco farmers would suffer losses in this year's harvest. He also said that in a good harvest, he could get profits of more than Rp20 million, but this year he predicted he would earn no more than Rp5 million. "We have no choice. If we don't immediately harvest our tobacco leaves, we will suffer greater losses because we have to allocate more treatment costs." After harvesting the tobacco leaves, farmers chop and dry them by spreading them out in the sun to dry. However, this year's dry season has seen cloudy skies over the slopes of the Merapi and Merbabu mountains. Tobacco leaves must be dried the same day they are chopped, otherwise they will be dam- aged and their worth declines further. To combat this problem, many farmers look for alternative locations with enough sunlight, such as fields or road- sides, or even renting the yards of people's houses, to dry their chopped tobacco. This, of course, increases their production and transportation costs. Just drying one ton of wet tobacco leaves costs around Rp1 million in labor costs alone. To add to the challenges they already face, farmers cannot yet sell their dried chopped leaves to cigarette companies because so far no company has opened warehouses to store them. According to the Boyolali Agricul- ture, Plantation and Forestry Agency's plantation unit, the wet dry season had decreased the production of dried tobacco in Boyolali to only about 6 to 7 quintals per hectare. In 2015, the production could reach 9 to 10 quintals. This year, 3,000 hectares of tobacco had been planted in Boyolali, spread across areas on the slopes of the Merapi and Merbabu mountains, such as in Ampel, Cepogo, Mojosongo, Musuk and Selo. NTB Tobacco Leaf Prices Monitored An official from the West Nusa Teng- gara (NTB) administration has con- firmed that it continues to monitor the purchasing process of Virginia tobacco leaves produced by local farmers despite a signed agreement that aims to protect them and their partner cigarette compa- nies from suffering losses. NTB Plantation Agency's business development head, Retty Wimartini, said, "In price discussion meetings, we are invited by cigarette companies to act as an observer and this is mandatory because of the government's roles as both regulator and mediator." According to NTB Plantation Agency data, 13 cigarette companies operating in Lombok have partnered with local farmers. Of that number, only six companies have set a base price for the purchasing of Virginia tobacco leaves in the region. A price agreement between cigarette companies and their partner tobacco growers had been mandated in NTB Regional Regulation (Perda) No. 4/2006 on Virginia tobacco cultivation and business partnership. Later, the NTB administration later issued NTB Governor Regulation No. 2/2007 as an implementing regulation of Perda No.4. "Based on an agreement, the base price of the best quality Virginia tobacco is Rp 9,000 [US$2.96] per kilogram. Several other companies have decided on lower prices ranging between Rp34,000 and Rp35,000, but based on our observa- tions, those prices are not yet inflicting losses on the farmers," said Retty. Data has revealed that in this year's growing period local farmers have planted 15,000 hectares with Virginia tobacco, produc- ing about 30,000 tons, or about two tons per hectare. ZIMBABWE Chinese Takeovers of Zim Farms Zimbabwe has seen a surge in millions of dollars of Chinese investment in formerly white-owned tobacco farms. At least five farms in Mashonaland Central, a region to the north-west of Harare, that was traditionally one of the coun- try's best tobacco-producing areas, have attracted Chinese investment. Confident President Mugabe's policy of strengthen- ing ties with China will offer a degree of protection, they have poured money into machinery and are taking advice from international experts. China is now the largest investor in Zimbabwe, a country whose economy is still reeling from the land seizures of 2000 and hyperinflation, and has taken a nosedive once again. Unemployment is at around 90% and the government is so short of money that it cannot pay teachers or civil servants. White farmers who were evicted from their farms have moved abroad or live hand-to-mouth, waiting for prom- ised compensation. A local farmer in Myurwi has said that there are now plenty of jobs in the district after years of difficulties following the departure of the white landowners due to the Chinese investors. Industry experts believe that the five Chinese-run farms will grow and cure about 1,500 acres of tobacco this year, despite their limited experience. A tobacco industry insider said the Chinese company would be paying a percentage of the income from the tobacco as a hefty rental fee for the land they are now using to the "political" men who now own the farms. He also added that some of that rental should be shared with the white farmers who had to leave their farms with nothing and received no compensation from the government.

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