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.

Checked-by: trikydik@inil.com (trikydik)