Source: The Times (UK) 
Pubdate: Wed, 20 May 1998
Contact:  http://www.the-times.co.uk/ 
Author: Jan Raath in Harare

TOBACCO SLUMP PUTS ZIMBABWE ECONOMY AT RISK FROM 

ZIMBABWE'S tobacco industry, which helped the Rhodesian economy to 
thrive through 14 years of United Nations sanctions, is on the brink 
of collapse and threatens to cause the economy to disintegrate.

Harare's cavernous tobacco auction floors, usually a hive of activity, 
fell almost silent on Monday as the 5,300 growers withheld their leaf 
in a week-long protest at low prices.

"Growers may never grow tobacco again," Robert Webb, president of the 
Zimbabwe Tobacco Association, told an emotional meeting of farmers, 
both black and white, in a rare show of unanimity, in a tobacco warehouse.

Zimbabwe is the world's second largest tobacco exporter, and its 
farmers the only ones outside America to produce the golden leaf used 
in expensive international brand cigarettes. Tobacco is also the 
country's largest export commodity, earning £373 million last year and 
acknowledged as the cornerstone of the economy.

But since the six-month auction season began on March 30, prices have 
slumped to $1.27 a kilo, 45 per cent below what they were at the same 
time last year, and far off the $1.90 farmers need to break even.

"I am finished," said Paul Munetsi, a small-scale farmer from Mount 
Darwin, 120 miles northeast of Harare. "I have grown 3,000 kg and it 
should have been enough to repay my arrears. Now I can't. It is terrible."

Ian Gordon, a farmer from Darwendale, 60 miles northwest of Harare, 
said the tobacco issue was "far, far worse than the land issue", 
referring to President Mugabe's threats to seize nearly 1,500 
white-owned farms. "It's not going to be a problem for the Government 
to get land after this."

Alarm signs are flashing with increasing frequency as the economy 
registers blow after blow, but the unexpected tobacco crash is likely 
to be the worst. "Everything starts to slip once the tobacco price 
slips," said Arthur Baisley, vice-president of the Commercial Farmers 
Union, whose members account for 85 per cent of marketed farm output.

The world tobacco business is in trouble, with demand hit by economic 
crisis in the heavy-smoking Far East and huge legal claims in America 
over tobacco-inflicted healthcare costs.

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