The Covid-19 pandemic has forced emerging black tobacco farmers to shut down operations. And even though it is now legal to smoke again, many farmers did not return to their fields when the new season of planting started two months ago, because they are broke.
The industry, which is valued at R15-billion a year and employs nearly 300,000 people in South Africa, has been hit hard because of the ban on cigarettes and tobacco products due to the lockdown.
To make matters worse, the tobacco black market cashed in on the ban on sales and has become more of a threat because the products are cheaper.
“So far 17 black farmers have closed their farms down and many others have scaled down on the number of hectares they have,” said South Africa Tobacco Transformation Alliance (SATTA) spokesperson Zachariah Motsumi.
The organisation visited farmers in Limpopo this week to assess the impact of the lockdown.
It is preparing to go to court again. Under the lockdown it was to get the ban lifted, but now it is because the anti-smoking lobby, supported by the Congress of South African Trade Unions (Cosatu), has proposed a 100% increase on the tax for tobacco products.
They believe the hike will curb the sale and distribution of illegal cigarettes, but SATTA has warned it will give smokers more reason to buy cheaper products, which will “kill” the industry.
“Does Cosatu want to put thousands of people out of work and force them to be social grant recipients? Over 290,000 people are dependent on the tobacco industry for their livelihood. Will Cosatu look after them when they are out on the streets? We think not,” Motsumi said.
The industry has been subjected to a series of taxes and levies as well as a ban on advertising their products.
Despite this, SATTA says the government does not assist emerging black farmers.
“The government does very little to support small tobacco farmers. They don’t get any training from government institutions nor do they get funding from the government the same way other industries do,” Motsumi said.
Instead, these farmers are trained and helped by commercial farmers.
Jabulani Thembe, who is a smallholder farmer in Kosi Bay in KwaZulu-Natal, has experienced the detrimental impact of the lockdown. He had to downscale from six hectares to two hectares.
“The tobacco ban did not stop people from smoking… it just stopped them from smoking legal tobacco,” he said.
“This continued even after the ban has lifted… people prefer illicit cigarettes because they are so much cheaper than ours now.”
He had to retrench 10 of his employees, and now only has four workers.
Next week SATTA will continue its site visits in Mpumalanga and Eastern Cape to get a better picture of the impact of the lockdown. But it has warned that if the industry is not assisted, more than 150 black tobacco farmers will soon go out of business.
Vutivi is a digital business news platform that will serve the Small Medium Micro Enterprises in the form of writing stories that will be informative about their sector. We pledge to deliver a commercially sustainable, world-class digital financial and business news service that is a must-read while being responsive to readership needs and tailor-making packages for SMMEs.