Tobacco farmers in South Africa face an enormous cash flow problem.
Although South African tobcacco farmers were allowed to continue harvesting their tobacco, since it is peak harvesting season for the farmers, they have to store the tobacco leaves in sheds, as they cannot deliver it for processing, as the processing plants are not categorised as an essential service.
Christo van Staden, Managing Director of Limpopo Tobacco Processors in Rustenburg, said they are not allowed to buy tobacco currently, as they cannot process it.
“The farmers now, due to it being the peak harvesting season are forced to store their tobacco, as we cannot buy it. This leads to a critical cash flow problem for the farmers.”
Van Staden said the livelihood of some 100 commercial and 150 smaller up-and-coming tobacco farmers is threatened, as they need cash to carry on their farming activities. “Bigger commercial farmers may have the right equipment and facilities to store the tobacco at the optimum moisture content needed to preserve quality, but the smaller farmers stand a big chance of suffering huge losses as they do not have these facilities and may lose their entire crop if moist weather situations persist for a few days and the entire harvest rot due to mold.”
Van Staden said many other farmers growing other crops are in the same dilemma. Some have received permits, for instance, to transport their produce twice a week to markets only, whereas they previously did so daily, and this lead to big losses as products go to waste.
A small concession in allowing processing of tobacco would be welcomed, Van Staden said.
At Limpopo Tobacco Processors some 400 workers do seasonal work in the factory, working two shifts, 24 hours per day. They are currently sitting at home, during what should be the processors’ busiest time. “We will only be able to pay them until the end of next week, but then I really don’t know.”
The Fair-trade Independent Tobacco Association (Fita) and the South Africa Tobacco Transformation Alliance (Satta) made an urgent appeal to government to urgently lift the ban on the sale of tobacco products implemented on the eve of the national lockdown. Both associations have issued statements in this regard.
“The current ban [on the legitimate trade in tobacco products] will encourage illegal activity, including fuelling illicit trade, and people may be tempted to break the regulations as the lockdown sets in. Decent citizens want to obey the lockdown, [but] that gets harder if they can visit stores [where they] are banned from buying goods they see on shelves every day,” said Satta Chairperson, Ntando Sibisi in the statement.
“Uplifting the ban would, among other things save jobs, bring more money into the state coffers, stimulate the economy, and decrease the psychological impact on South Africans of the lockdown period,” Fita Chairperson Sinenhlanhla Mnguni said.
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