Tobacco e-marketing to reduce costs

About 18 percent of Zimbabwe’s tobacco is sold through the auction system

About 18 percent of Zimbabwe’s tobacco is sold through the auction system

Martin Kadzere Senior Business Reporter
THE automation of tobacco auctioning is set to minimise buyer collusion, reduce marketing costs and result in better returns for farmers, a tobacco association has said. The Tobacco Industry and Marketing Board will introduce e-marketing in the forthcoming season and is currently conducting trial runs. About 18 percent of tobacco is sold through the auction system and this year, output is projected at around 205 million kg.

“We welcome the development as it is expected to increase efficiencies in the marketing system right from when the farmer delivers his bales to payment,” Zimbabwe Tobacco Association chief executive Mr Rodney Ambrose said yesterday.

“It will allow for tracking of bales through the system at any given time, efficient selling of tobacco, minimise waiting times and hopefully better returns for farmers. “We understand the system will, over time be extended back to the farm gate, where bales will be e-tagged.”

Mr Ambrose said with e-marketing there would be no direct communication between the buyers when purchasing, thus minimising cases of buyer collusion and share outs.

“We must give the system time to achieve the desired results, at least two seasons of live trials,” said Mr Ambrose said adding that the Tobacco Industry and Marketing Board should be applauded for stepping away from the traditional auction system.

Zimbabwe, one of the major producers of tobacco in Africa, has three main auction floors. Economic analyst, Mr Nhamo Muchapondwa, encouraged industry stakeholders to support the deployment of the new system.

“Stakeholders are encouraged to embrace the new technology platform which brings much needed transparency and ethical conduct in tobacco marketing for the ultimate benefit of all stakeholders,” said Mr Muchapondwa.

“As with all innovations, issues of political economy will create challenges in the initial implementation. “It is imperative that farmers and buyers are educated on the benefits of the system in order to ensure smooth adoption. The system will bring substantial benefits to the industry as a whole.”

The TIMB said the e-marketing of tobacco would will go far in reducing side-marketing, illegal sales and theft. The electronic auctioning of tobacco will also reduce the processing time for grower payments and eliminates illicit floor activities, for example ticket tampering. It added the system will also ensure that the buying process is transparent and eliminates the possibility of connivance among buyers.

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

The TIMB, whose mandate of to promote orderly marketing of tobacco, will also be able to monitor the sale process and this on its own will make the whole process more transparent.

Article Source: The Herald