HCCL offers discounted coal to tobacco growers

HCCL Holdings, formerly Hwange Colliery Company Limited, has launched a discounted coal supply programme to support tobacco farmers affected by the El Niño-induced drought as well as help mitigate deforestation, officials have said.

The programme, being implemented in partnership with the Tobacco Industry and Marketing Board (TIMB), entails a discounted coal price of US$45 per tonne to the farmers, compared to the usual industrial rate of US$55 to US$65 per tonne, HCCL corporate affairs and public relations executive Dr Beauty Mtombe said.

“Hwange Colliery is committed to supporting Zimbabwe’s tobacco sector, especially during challenging times that have been brought by the El Niño-induced drought,” said Dr Mtombe.

“Our discounted coal supply programme is a tangible way we are contributing to (building) the resilience of our tobacco farmers.”

Tobacco production in Zimbabwe is primarily undertaken by small-scale farmers who rely heavily on firewood for the tobacco curing process. The over-reliance has resulted in widespread deforestation.

Despite ongoing reforestation initiatives, the pace of tree planting has not kept up with the rate of deforestation, according to environmental experts.

Tobacco farming is a major driver of deforestation in Zimbabwe, contributing to approximately 20 percent of the country’s annual forest loss, according to the Forestry Commission of Zimbabwe (FCZ). This equates to around 60 000 hectares of forest cleared each year for tobacco curing.

Zimbabwean law imposes strict penalties, including fines and potential arrest, for illegal logging and the use of forest products without a permit. Tobacco farmers are not exempt, and are required to establish energy woodlots equal to 30 percent of their tobacco fields to offset their fuelwood consumption.

However, enforcement of these regulations has been lax, and the majority of small-scale farmers have failed to comply.

Shifting from firewood to coal for tobacco curing presents a potential sustainable solution to curb deforestation.

TIMB acting chief executive, Mr Emmanuel Matsvaire, said the programme would also eliminate middlemen who previously purchased coal at low prices and resold it to farmers at inflated rates.

HCCL will verify farmers’ identities using the TIMB grower database.

By verifying farmers’ identities using the TIMB grower database, HCCL will prevent fraudulent activity and ensure that only genuine tobacco farmers benefit from the discounted coal supply.

“We are also going to link the farmers to the NRZ (the National Railways of Zimbabwe) to ensure that coal will be delivered closer to their (farming) regions,” said Mr Matsvaire.

Tobacco is Zimbabwe’s second-largest foreign currency earner after gold.

Last year, farmers produced a record crop of 296 million kilogrammes.

However, this season’s output is expected to decline to 235 million kilogrammes due to the El Niño-induced drought.

By day 99 of the marketing season, 229 million kilogrammes had been sold, a 21 percent decrease compared to the same period last year, according to TIMB figures.

Total revenue reached US$787 million, down from US$890 million in the previous year.

Despite lower output, average prices increased by 13,2 percent, partially offsetting the revenue decline.

Approximately 216 million kilogrammes were sold through contract, while 13,7 million kilogrammes were auctioned.

This coming season, the government projects output slightly below 300 million kg, which is close to the 300 million kg target set under the Tobacco Transformation Plan.

The plan also seeks to diversify and increase the production of alternative crops, raising their contribution to farmers’ incomes to 25 percent by 2025.

Other objectives include increasing value addition and beneficiation of tobacco, enhancing market access and competitiveness of tobacco value-added products for improved foreign currency earnings, and localising tobacco financing by providing US$60 million seed finance to optimise the country’s foreign currency benefits from tobacco exports.

Tobacco production will be sponsored by the private sector through contracts (93 percent) and self-financing (7 percent).

-herald