Court throws out growers’ injunction

The High Court in Malawi’s commercial city, Blantyre, has vacated an injunction earlier obtained by six tobacco growing associations to restrain government from implementing a new tobacco production system.

The decision means the new system, Integrated Production System (IPS), approved by President Joyce Banda earlier this year, can now be rolled out as planned.

IPS is an initiative in which tobacco buyers combine farming and marketing strategies by dealing directly with farmers in producing the leaf.

If implemented fully, the IPS will see the traditional auction floors only handling 20 percent of the total volume of tobacco produced.

 Both the Tobacco Control Commission (TCC) chief executive officer Dr Bruce Munthali and two of the grieved associations, Phindu Tobacco Growers Association and Ngala Tobacco Growers Association, confirmed the lifting of the injunction in separate interviews on Monday.

 Munthali described the move as good news to the tobacco industry, saying it will protect the image of the industry in the eyes of tobacco buyers, among other key stakeholders.

 “This IPS can operate its activities. It stopped us from transacting any activity on IPS and buying entities could not operate freely under the same,” he said.

Munthali also said with the introduction of IPS, Malawi would become a ‘core market’ as opposed to an ‘opportunity market.’

 He said the rolling out of IPS would also help improve farmers’ access to inputs, training and micro-financing which, he said, has not been the case in the past.

 “Malawi tobacco should be produced in compliance with good agriculture practices, good labour practices and good environmental management to make Malawi a core market for tobacco,” said Munthali.

 Ngala Tobacco Growers Association executive secretary Richard Chapuma said the lifting of the injunction follows a consensus by the six associations.

 He said, initially, the associations had perceived that the new production system would give tobacco buyers more powers over the growers, but noted after discussions with TCC and other players, the associations have clearly understood the rationale behind IPS.

 “There was a total breakdown in communication earlier when officials introduced the system. But now after discussing the issue with others at length, we have now reached a common goal,” said Chapuma.

 High Court Judge Joseph Mwanyungwa last month gave the injunction to the tobacco growers in Blantyre.

 Court documents seen by Business News from High Court in Blantyre showed that six tobacco growers’ associations with a combined membership of 16 000 farmers challenged the decisions as illegal and not in tandem with the country’s laws.

 The court documents under Judicial Cause Number 29 of 2012 signed by Deputy Registrar of the High Court ordered that any disobedience to the order will amount to contempt of court.

 Implementation of IPS will see 80 percent of the total tobacco volume sold under contract farming, and all buyers will be having individual contracts with the growers without going through auction floors where tobacco is sold through bidding by different buyers.

 Local tobacco industry experts bank hopes on IPS that it will help propel the use and adoption of new tobacco technology among tobacco growers and also help offer tobacco growers pre-determined prices as they will be in a position to know the prices of their leaf in advance.