At least four local tobacco farmers have committed suicide this year because they could not pay their debts to a Chinese contracting company, Tian Ze Tobacco.
This subsidiary of China Tobacco Company started operating in Zimbabwe in 2005. In 2011, it established a $1 million tobacco sales floor in partnership with a local company, to buy and process the golden leaf.
“Four contract farmers have committed suicide since the last tobacco harvest. They owed Tian Ze several hundreds of thousands of dollars each and they must have decided dying was the only way out for them.
Two left suicide notes indicating that they could not bear the debt trap that Tian ze had lured them into,” said a fellow tobacco contract farmer, who declined to be identified.
Another source said he knew of three farmers who had committed suicide, two from Chinhoyi and another identified as one Kunaka, aged 65. The victims had been served with letters indicating Tian Ze’s intention to attach their properties to offset the debts.
While Tian Ze has been considered to offer better prices than the other floors, sources who have been dealing with the company for years told The Zimbabwean that it had devised a complex way to cheat them, resulting in heavy debts.
The sources said the contracts that farmers had to sign before supplying their leaf to the Chinese company were vague. “The farmers just rush to sign the contracts, which are one-sided and suit Tian Ze better.
They claim that they offer the best prices for tobacco, sometimes as much as $8 when other floors are selling at about $5. The reality is that only 30 percent of the crop fetches high prices while the rest gets little. The farmers are not told this, so Tian Ze is cheating,” said the farmer.
In addition, he said, the company unilaterally imposed prices – forcing farmers to accept what they were offered. This put them in a vulnerable position and most failed to pay. The money owed accrued annually and quickly reached unmanageable levels, following which the company would attach property.
According to the contracts, Tian Ze is supposed to supply inputs such as seed and fertilizer, agronomists and adequate training.
However, where farmers need extra inputs, especially when the crop was damaged by rain or other natural causes, Tian Ze has been failing to honor its side of the bargain.
“It either delays giving you the extra inputs or does not do so at all. Also, it hardly sends you the agronomists and when they do come, it is too late and the crop is a write off. That becomes tricky and you can’t pay back.
You wait for the following season and when the same thing happens, you end up with farmers committing suicide,” said the second tobacco farmer.
Tian Ze never waited for arbitration whenever there was a dispute, but farmers were frustrated by the slow conciliation process which they suspected was influenced by bribery.
The company, which has been receiving preferential government treatment, did not respond to calls made on the number supplied online on numerous occasions. In 2010, government exempted it from the indigenisation law, which required that foreign companies surrender major shareholding to locals.
“Companies such as Tian Ze came into the country at a time when no one wanted to come in. They have been supporting our agriculture and our farmers, so we look at those things when considering whether to exempt them or not,” said former Indigenisation Minister Saviour Kasukuwere.
A government letter dated July 4 2010, addressed to Tian Ze managing director Shao Yan read: “I refer to the letter submitted to my office on March 8, 2010.
Having submitted your proposal, I hereby grant you exemption from full compliance with the Indigenisation and Economic Empowerment Act (Chapter 14.33).”