Formation of bank for tobacco farmers likely to take more time than expected

A tobacco farmer in Migori District, South Nyanza. Alliance One has paid out Sh67 million to tobacco farmers in Nyanza and Rift Valley regions. Photo/File 

By Felix Andrew

Moshi Kakoso, Chairperson of Tanzania Tobacco Farmers Association

The establishment of the long awaited tobacco farmers’ bank will take longer than expected due to a number of reasons including inadequate communication between members and management.


Speaking to this paper in a phone interview yesterday, Chairperson of Tanzania Tobacco Farmers Association, Moshi Kakoso, said it was not exactly known as to when the new bank would be set up.

“We are at the early stages of establishing the bank but it might take more time due to various challenges that we have been experiencing in the past,” he said.

He declined further comments, but insisted that there was poor communication between the management of envisaged bank, members and relevant government authorities.

Kakoso said the determination to establish the bank was there since its main aim is to enable the farmers to secure loans easily. Presently, tobacco farmers can only access loans at few commercial banks which dish out money at very high interest rates, making it difficult for them to procure enough loans.

According to him, the society had chosen Tabora Municipality to be the headquarters of the bank because a quarter of tobacco farmers had their activities in the region.
“We expect more smallholder farmers to be cooperative in the founding of the bank because their presence in setting up of the bank is necessary,” Kakoso said.

The association also wants the government to uphold its 2009 decision aimed at increasing tobacco production from 58,702 tonnes to 60,000 tonnes.

Recently, tobacco emerged as one of the main sources of government revenue among the total traditional exports, according to Bank of Tanzania monthly economic review for November last year.

In the same vein, official government figures show that a total of 340bn/- was collected as tax from the crop’s sales in the last five years.
About 52bn/- was collected in 2003/2004, some 59bn/- in 2004/2005, while 62bn/-was collected in 2005/2006. At least 77bn/- was collected in 2006/2007 and 90bn/- was gathered in 2007/2008.

Tobacco production rose to 59 million kgs in 2009 up from 22 million kgs in 2000 resulting in local farmers’ earning as much as between 300,000/- and 500,000/- per ha in the previous season.

Globally, there is an oversupply situation resulting from increased worldwide production and reduced consumption due to the world economic recession, smoking restrictions, increased taxation on tobacco products and regulations. 

SOURCE: THE GUARDIAN