Tobacco Commission (TC) says it wants to tame overproduction of the leaf which has for a long time saturated the market and pushed down prices.
TC chief executive officer Kayisi Sadala said this in an interview on Friday after the tobacco regulatory body started registering and licensing growers for the next growing season.
He said while the country has on numerous occasions been left to deal with the impact of overproduction despite TC allocating quotas, the regulatory body will enforce the provisions in the new Tobacco Industry Act in which overproduction has been addressed.
Among others, Sadala said the new law stipulates that farmers who will produce tobacco exceeding their allocated quotas will have 75 percent of their proceeds from the extra tobacco given to the commission while unregistered traders at the tobacco floors will not be allowed to enter the floors or sell their tobacco.
Sadala said for various offences in the industry, the new law has set a minimum of K2 million and one year imprisonment and a maximum of K10 million and up to five years in jail.
“In the meantime, TC is disseminating sensitisation messages to all growers to adhere to the allocated production quota, but also inform them of the punitive measures as provided for in the new Act.
“The new Act has provisions in management of overproduction and TC is very sure that sanity shall prevail among growers. Even those that produce without being registered, or choose to secure tobacco through vending, the new Act has provisions to deal with such scenarios,” he said.
Figures from TC show that this year’s tobacco production is 35 percent above the 166.8 million kilogrammes (kg) buyers’ demand at 206.9 million kg.
In 2018, the country produced 171 million kilogrammes (kg) against buyer demand of 149 million kg, representing a 12 percent oversupply.
In 2017, first round indicated that the country had produced 33 percent above the international trade requirements of 158.1 million kg while in 2016, the country produced 192.6 million kg against trade requirements of 176.8 million kg.
Tobacco farmers have been accusing TC of failing to regulate the sector, arguing that overproduction will lead to low prices and losses to growers.
Farmers Union of Malawi (FUM) president Alfred Kapichira-Banda said TC should have been strategic by conducting crop assessment before agreeing to buyer-demanded volumes.
But Sadala played down the growers’ fears, saying TC and government are working to ensure that all the produced tobacco is bought to benefit growers in consideration of their investments.
Tobacco, rated as the country’s major foreign exchange earners, raked in $337.3 million (about K247 billion) in foreign exchange earnings last year. n