Cablegate: Tobacco Buyers Reportedly Fund New Ventures Outside

This record is a partial extract of the original cable. The full text of the original cable is not available.

UNCLAS SECTION 01 OF 02 HARARE 000355

SIPDIS

SENSITIVE

STATE FOR AF/S AND AF/EX
NSC FOR SENIOR AFRICA DIRECTOR JFRAZER

E. O. 12958: N/A
TAGS: EAGR ECON ZI
SUBJECT: Tobacco Buyers Reportedly Fund New Ventures Outside
of Zimbabwe

Ref: Harare 338

SENSITIVE BUT UNCLASSIFIED. NOT FOR INTERNET POSTING.

1. (SBU) Summary: Dispossessed white commercial farmers
report that tobacco growers are trying to fund new ventures
for them in third countries. Up to 170 tobacco farmers have
reportedly entered into such start-up schemes. Other farmers
report that they do not want to continue farming in
Zimbabwe, but they have not decided whether they would
pioneer in another country. End Summary.

2. (SBU) In a recent meeting with the Commercial Farmers
Union (CFU), president Colin Cloete reported that "Big
Tobacco" (he declined to identify who this actually is, but
it appears to be tobacco buyers) is apparently financing new
start-up programs for Zimbabwean tobacco farmers in third
countries, particularly Zambia. According to Cloete, some
tobacco buyers who need the flue-cured flavor tobacco
traditionally produced by Zim commercial farmers have opted
to fund production of the product rather than either: a)
change their long-standing blend, or b) hold out hopes for
an adequate, if reduced, yield -- including smaller-leaved,
less well-cured, and less valuable product -- from Zimbabwe.
Tobacco buyers want the specific product and don't really
want to be held hostage to the questionable success of
Zimbabwe's agricultural reform.

3. (SBU) According to Cloete, tobacco buyers have offered to
completely fund the start-up costs for approximately 300
established producers on new land in third countries, with
pay-back times ranging from five to seven years. Up to 170
farmers have reportedly taken up such offers. Cloete
himself noted that he is a farmer, not a pioneer nor a
politician, and he would prefer (all things being equal) to
continue exercising his skill in Zimbabwe -- a sentiment
likely to prevail among third- and fourth-generation
farmers. Most commercial tobacco farmers are in the
position of trying to salvage anything they can from their
lifelong investments, and some continue to farm in Zimbabwe
despite the likelihood they will lose their farms before
harvest. Many of the tobacco farmers still operational are
fighting acquisition in court and/or struggling to fend off
land grabs, whether legal or extra-legal. If (when) it
becomes apparent to some of the farmers who are still trying
to produce a crop that they will be wiped off the land, they
may well give in and accept a tobacco-buyer-funded start-up
elsewhere.

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Why Some Farmers Are Taking Up the Offers
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4. (SBU) Other farmers have given up all hope of a return
to normalcy and business as usual in the country of their
birth. One forty-five year old commercial tobacco farmer
reported that, even though he is at the prime of his life as
it relates to farming -- relatively young, healthy, and
possessing a wealth of specialized experience -- he does not
want to continue farming in Zimbabwe. He pointed out that
tobacco, in particular, is a labor-intensive crop that
depends on the trust and cooperation between the farmer and
his labor force. Although like many commercial farmers he
zealously attempted to protect his relationship with his
workers, under pressure from war vets and the influence of
Joseph Chinotimba's rogue "labor union," this farmer's labor
force "turned" against him to the point that his former
laborers participated in the occupation and looting of his
farm.

5. (SBU) This particular farmer's land was purchased in
1999 after it was turned down by the GOZ, and has never
received a Section 8, or Final Notice of Acquisition;
because of repeated harassment, the family moved into town
for its own safety. When his wife returned to the farm to
check on horses that had been left under the care of some
trusted former workers, she was assaulted and beaten --
along with her 17-year-old son and his friend, while her 11-
year-old daughter watched in a state of shock -- by a group
led by the politically-connected Zanu-PF beneficiary Themba
Mliswa, who is "claiming" their farm as a "new commercial
farmer." How, this man wearily asked, could he again trust
farm laborers who looted his property and then stood by,
refusing to help, while his wife and son were being beaten
by thugs in front of them?

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Comment
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6. (SBU) In sum, tobacco buyers are apolitical -- they are
trying to ensure their continuing access to a specific
ingredient, and much of that access depends upon the skill
of the growers. If Zimbabwe's production does not meet the
buyers' needs, the buyers have no qualms about dropping
Zimbabwe in favor of a more controlled supply. This new
venture may also indicate a desire by the buyers to move
away from an auction-type model -- which would increase both
freedom and income for the farmer, if the skewed economic
policies at play in Zimbabwe were eliminated -- to a
"captive-grower" model whereby the buyers would face less
uncertainty and less competition for the final product. In
any case, such a move underscores the fact that tobacco
buyers know that expertise is crucial to produce the
valuable product that they want -- it takes more than an
interchangeable peasant farmer with a hoe. In the end,
commercial farmers who decide that continuing to farm is
their best survival strategy may well find the security
offered by tobacco buyers to be more seductive than the
"freedom" - and concommitant risks - which a kinder and
gentler Zimbabwe previously offered.

7. (SBU) As we have pointed out, however (reftel), once
these farmers go, the GOZ loses a potential resource vital
for rebuilding the shattered economy -- and must further
contend with a costly compensation claim hanging over its
head. End comment.

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