Tobacco farming in Zimbabwe has time immemorial stood as a fertile economic ground, however this type of farming is not for the weak as it requires a vast degree of expertise, diligence and regulation compliance. A portion of Zimbabwean farmers have thrived on tobacco farming sustaining their families up to the third generation. This article therefore focuses on the legal framework for the marketing and sale of tobacco in Zimbabwe.
What are the main sources of tobacco industry marketing and sale laws?
All transactions relating to the buying and selling of tobacco in Zimbabwe are regulated by the Tobacco Industry and Marketing Act (hereinafter the Act) together with various regulations promulgated hereunder. Prior to the year 2022 no clear legislation prohibiting the side marketing of tobacco was in existence in Zimbabwe. That being the case, the ministry of Lands, Agriculture, Fisheries, Water and Rural Development sought it prudent to promulgate SI 77 of 2022 prohibiting any engagement in side marketing of tobacco. Under these laws, tobacco farmers have the option to self-finance and enjoy the independence of choosing their purchasers or to obtain funding from contractors to whom they will sell their tobacco as agreed.
Requirements for buying and selling of tobacco.
In the tobacco sale and marketing industry people often hear the terms buyer, contractor, contract grower, scheme contract, producer and side marketing. All these terms relate to the positions of players and processes undertaken in the marketing and sale of tobacco. Any persons who so requires to become a tobacco contractor is expected to make an application for registration with the Tobacco Industry Marketing Board which will then give him/her a license. Such applicant is mandated to pay a prescribed fee for the license depending on the time of the year at which the application is made.
Tobacco subject to scheme contracts cannot just be sold to anybody but only licensed tobacco contractors with whom a contract grower has entered into an agreement. Scheme contracts are entered into by and between a contract grower and a contractor to grow tobacco where the contractor supplies agricultural inputs in return for the contract grower delivering the contract tobacco to the contractor. Anything other than this is regarded as side marketing of tobacco.
What is side marketing of tobacco?
This happens under three different scenarios and one is where a contract grower sells contracted tobacco another person or entity other than to a contractor that they have been contracted to before they have fulfilled their contractual obligations with the indebted contractor. The second one is where a buyer buys contracted tobacco prior to the grower extinguishing their contractual obligations with their contractor. The third one is where an auction floor buys tobacco that has been contracted and the grower has not yet fulfilled its contractual obligations.
Consequences for side selling of tobacco
The law is spelt out in clear terms that where an individual is found side selling any tobacco shall be guilty of an offence and liable to fine not exceeding level 5 or an imprisonment term not exceeding 6 months. Depending on the degree of illegality, a person can be sentenced to both imprisonment and payment of a fine. Such consequences do not only affect the buyers or sellers, however this is inclusive of persons who would have assisted in the storage and transportation of such tobacco.
It is very important to remain on the right side of the law whenever engaging in tobacco contract growing. Where any breach arises in a scheme contract, the aggrieved party can institute litigation suing the defaulting party so as to recover any losses incurred.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.