E-marketing's appropriateness

Yvonne Mutava

The 2017 tobacco marketing season started yesterday on the auction floors and only commences today on the contract floors, and this is for a reason.

The reason for the contract floors starting a day later is the price matrix which is generated on the auction floors.

The average price for a grade on the auction floors determines the minimum price for the same grade on the contract floors.

Simply put, prices on the auction floors determine the minimum prices that can be offered per grade on the contract floors.

Consequently, because prices on the auction floors determine prices on the contract floors, it is important for TIMB to get it right on the auction floors.

Hence, it is imperative to roll an out e-marketing system on the auction floors first and on the contract floors during the course of the marketing season.

In 2004, tobacco produced under auction was three times more than tobacco produced under contract.

This trend was gradually reversed with contract tobacco selling four times what is sold on the auction system.

The mandate of the TIMB is to ensure growth of the industry hence our approach as an Industry has been to focus more on small scale and communal farmers so as to try and improve their productivity.

This is the reason why TIMB is giving drip irrigation facilities and rocket barn equipment to small scale and communal farmers.

The aim is to maintain a dual marketing system and not having one side dying a natural death.

Most first time growers of tobacco sell their tobacco on the auction floors.

If we allow the auction system to die, growing tobacco will become difficult for people who want to enter the industry.

The e-marketing system will reduce the time spend at the auction floors for over 30 000 farmers registered to sell their tobacco under the auction system thereby reducing congestion and promoting orderly marketing.

Once a sale is concluded, there will not be need for someone to go around the auction or contract floor picking up bale tickets which will be heaped somewhere before people enter them into the system before sales sheets can be printed and payments made.

Ticket tampering among other illicit floor activities were giving buyers and contractors a nightmare and fortunately the electronic system is going to address these challenges.

Sleeping on floors is largely a problem at auction floors more than it is at contract floors as a significant number of large scale contracted growers do not wait to see how much their tobacco would have fetched.

The e-marketing system comes to try and proffer solutions to the aforementioned problems whilst we try and come up with remedies for other challenges faced by the industry since we cannot have a one fit all solution.

Typhoid is a serious reality and we do not want farmers to stay longer than necessary at the selling floors.

The only function of the e-marketing Hand Held Technology (HHT) that works solely on the auction floors is the bidding aspect whilst the rest are designed for dual marketing of tobacco.

The second phase of the electronic marketing system will reduce side marketing which mainly affects the contract system.

Bales will be electronically tagged using Radio Frequency Identification (RFID) tags with farmers’ grower and lot numbers thereby bringing important aspect of traceability right from the farm.

Side marketing,illegal sales and theft of tobacco are aspects that will also be handled with RFID tags.

Contractors were trained on how the electronic system operates and have also raised issues on what they want improved on it because it will soon be rolled out to contract floors hence saying the e-marketing is only for auction is a merely a figment of imagination.

Another benefit to be derived from the e-marketing is that Tobacco buyers will receive real-time data as the selling process happens and will therefore be able to tally bales when they reach the dispatch section of the sales floor.

TIMB will also be able to monitor the sale process and this on its own will make the whole process more transparent as well as eliminate manipulation of data.

Sales data will also be relayed in real-time to stakeholders, which is in contrast to the previous setup where data would be uploaded to TIMB systems at the end of the day. 

Tobacco growers and casual observers will also be able to witness live selling processes on screens conveniently located at various places at the sale points.

Other functions include scanning of tickets, real time transferring of data to TIMB servers, allowing monitoring of processes over the internet, classification and arbitration done in the system and can be analysed, enabling fast processing of payment as sales sheets are printed soon after a sale is conducted thereby enabling payment to be done soon afterwards to farmers, to mention but a few.

The e-marketing system came as a result of wide consultation with Industry stakeholders and its arrival has been met by positive responses from stakeholders and farmers who attended mock sales.

The e-marketing system will bring efficiency to both the auction and contract system.

For the luddites and cartels of unscrupulous buyers, the e-marketing system is tried and tested technology used in India and its benefits far outweigh the perceived disadvantages hence it is here to stay, and will cover the dual marketing of tobacco in Zimbabwe.

For additional Information contact 

TIMB on telephone numbers 08677004624/6 or 0772145166/9 or 0279-22082/21982 or 025-3439 or 067-24268/29246 or 0277-2700 or 064-7280 or 0271-6772 or Toll Free Numbers 08006003 / 0731999999 / 0712832804 or WhatsApp 0731999999 or E-mail: info@timb.co.zw

Presenting clean tobacco for sale

Yvonne Mutava

Tobacco growers are encouraged to present clean neatly packed tobacco for sale in order to minimize rejection and while maximizing on profits.

Growers are encouraged to take reasonable care when presenting tobacco for sale as undamaged, uniformly graded tobacco which is free from contamination, foreign matter and other non-tobacco related materials is what the market seeks.

“Clean” means completely free of floor sweepings, grading tickets, pieces of string, plastic, grass, newspaper and any other foreign matter.

As a result, the use of polythene and plastic products is definitely not recommended in tobacco handling.

Farmers should make sure that they present clean to market as anything short of this would result in rejection of the bale.

Growers are also reminded that eating during grading of tobacco is not allowed as it may encourage foreign matter on the graded tobacco.

It is also of much importance to take great care when packaging and sewing the hessian wraps.

Needles and threads found in a bale are termed non tobacco related material hence growers should always be cautious after using them, making sure that they do not get packaged together with the tobacco.

Bales found before and after sale to contain any foreign matter at all will be closed up and not sold but will be rejected as WR (foreign matter).

Should 10% of the consignment be found to contain foreign matter, the whole consignment will be rejected.

Tobacco farmers should also ensure that no attempt is made to hide inferior tobacco in the centre of bales as nesting is an offence that attracts a penalty of twenty dollars per bale or a one year imprisonment or both.

All nested tobacco bales will be for forfeited to the Board and shall be re-handled and sold to the Board’s account.

Ensuring that tobacco is being kept in good condition is another way of proper handling.

Buyers appeal against the ‘wet’ condition therefore growers should ensure that tobacco is not over-conditioned as this may lead to mould.

Most growers do not consider some handling procedures seriously yet there is no stage which should be ignored since it might affect the sale.

Transporting of the crop to the selling points is another form of handling which is generally taken for granted by many.

Growers should only use trucks that have a covering so as to ensure that their bales are not soaked by rain.

Growers are reminded that, tobacco for sale should not be transported together with diesel or any other fuel as this may contaminate the tobacco and farmers are reminded that any fuel contamination leads to the withdrawal of tobacco from the sale.

Great care should also be taken to ensure that grease from the baling box screw does not come out into contact with tobacco.

It is recommended that the screw be always greased under supervision as bales will be rejected as “Damaged” (DR) if found contaminated with grease at the floors.

Farmers are not be permitted to collect their rejected tobacco and auction floors have the obligation to make arrangements for such tobacco to be re-handled within their premises or engage licensed graders to carry out the re-handling.

Growers are also reminded that procedures for presentation of tobacco sold by auction will continue as before, so only approved wrapping paper and hessian wraps will be used in baling tobacco for presentation at the auction floors.

Farmers are therefore encouraged to acquire hessian wraps from approved outlets as cheaper similarly looking material may be rejected as inappropriate as they may be contaminated by chemicals that are banned in tobacco.

In such a circumstance, a farmer will have paid for the similarly looking paper on the street and will then be required to buy the correct paper from approved suppliers, thereby paying twice and making the shortcut expensive.

Contract farmers' marketing season preps

Buhle Nkomo

Contract growers are expected to start selling their tobacco on 16 March, a day after selling at the auction floors would have commenced.
 

The reason for the one day lag time is contracted growers use a price matrix generated at the auction floors.

Loosely described, the price matrix’s generates the average price per grade at the auction floor which in turn determines the lowest price a particular grade can be sold at on the contract selling points on the following day, the aim being to protect farmers.

Pricing of tobacco will be based on an agreed grade-price matrix using the TIMB classification system which prices should cover production costs and include a profit margin for the contract grower.

In the event that the agreed price in the contract is lower than the price paid for the same tobacco at the auction floors at the time, contractors use the price matrix. 

TIMB will provide arbitrators who will determine consistency of grades and the final position on any price offered or any defective bales disputes.

Contracted growers are supposed to deliver their tobacco to their specific contracting firms’ selling points.   

In some instances, their contractor may make transport arrangements to deliver the tobacco to the designated sales venue at which TIMB will be present to supervise the sale.Where applicable, the contractors may meet the additional costs associated with contract sales.

Contractors authorized to conduct sales for flue cured Virginia tobacco are Aqua Tobacco, Boost Africa, Chidziva, Curverid, Ethical Leaf, Gold Leaf, Intercontinental Leaf, Kratos, Mashonaland Tobacco, Maxlucky, Munakiri, Northern Tobacco, Pamuka , Premium Leaf Zimbabwe, Shasha Tobacco, Tian Ze and Zimbabwe Leaf Tobacco. 

The contractors IT systems are linked to the TIMB’s to ensure compliance with the booking procedures, stop order requirements, loan order requirements, loan clearance and sales data transmission to TIMB.

Tobacco sold at contract selling points is booked by the contractor on behalf of growers into the TIMB Booking and Delivery system prior to selling and sales are only to take place at venues approved by TIMB. 

The contractors and growers have online access to the TIMB booking system and they can alternatively can be informed through a phone call to TIMB or visiting TIMB office.

The onus to book all tobacco to be sold on any given day shall be on the contractor.

Contractors can only book growers based on an approved list of contracted growers submitted to TIMB by contractors.

As provided for in the booking system, growers’ numbers, number of bales, sales venue and date of sale should be captured.

Sales will not be allowed to proceed if the contractor’s IT system is not linked to the TIMB system and meets other requirements relating to stop orders and bookings.

Contractors are obliged to weigh, open and sample bales before sales in terms of the sales procedures laid out in the agreement between contractors and TIMB.

  

Tobacco laid for sale without a valid TIMB registration or booking will attract a fine payable by the contractors.

Any purchase or sale of contract tobacco outside the agreed framework will also attract a fine

As with auction sales, the contractor shall also provide manpower to open and sample tobacco bales. 

The contractor’s buyers will classify the tobacco based on the current TIMB grading system.

Contractors will also classify defective bales prior to pricing.

A sale shall be deemed complete once arbitration is conducted and the top copy of the sale ticket has been removed from the bale by Contractors’ staff for recording and payment processing purposes

Auction floors and contractors shall observe the requirements of the FARMERS Stop Order Act Chapter 18; 11 before paying the balance of the purchase price to the seller.

To facilitate this process, all stop orders will be lodged with the Tobacco Industry and Marketing Board, after proper registration with the authorities at least 48 hours before sale.

In conclusion, contracted growers are encouraged to desist from side marketing which is selling of the tobacco they produced under contract using relatives’ grower numbers or to companies other than the ones that funded the production of the tobacco. 

Side marketing is a cancer that will, if allowed, virtually destroy the industry.

For additional Information contact
TIMB on telephone numbers 08677004624/6 or 0772145166/9 or 0279-22082/21982 or 025-3439 or 067-24268/29246 or 0277-2700 or 064-7280 or 0271-6772 or Toll Free Numbers 08006003 / 0731999999 / 0712832804 or WhatsApp 0731999999 or E-mail: info@timb.co.zw