August 1 2005: Mutharika threatens to deport buyers if they do not offer better prices. “You should pack up and go, you are exploiting small farmers,” charges Mutharika at the re-commissioning of spinning and ginning departments of Mapeto DWS in Blantyre.
March 27 2006: An irate Mutharika, officially launching auctions in Lilongwe, sets minimum prices of $1.70/kg for top grade leaf, $1.10/kg for the lowest grade. The price prescription comes a few days after his “negotiation” meeting with buyers on prices ended in deadlock. “I would like to be called a dictator to protect my people…I do not want anybody to point a finger at me that I am dictating.” Unfortunately for him, prices tumbled. On May 3 2006, â€˜Tobacco growers mad at Binguâ€™ headline greets him after failing to enforce minimum prices, prompting some farmers at Limbe Auction Floors to rail at him.
July 5 2006: Frustrated that tobacco buyers defied his fixed prices, Mutharika brands the companies “thieves” and “exploiters” on his return from an African Union Summit in Banjul, Gambia. On July 19, the bitterness with Mutharika from growers at Mzuzu Auction Floors was also summarised in a story titled â€˜Tobacco growers angry with Bingu over prices” as farmers resented his failure to reign in on buyers.
January 22 2007: “Negotiations” between Mutharika and the board chairperson of US-based Universal Corporationâ€”the majority shareholder in Limbe Leaf Tobacco Company (LLTC)â€”Allen King over prices also end in deadlock.
February 27 2007: Shortly after Kingâ€™s departure, The Nation announces that LLTC managing director Charles Grahamâ€”who had a tense relationship with the administration over tobacco pricesâ€”is leaving Malawi “due to circumstances beyond my control” and new regional duties for Universal Leaf where he would be in-charge of Zimbabwe, Mozambique, Zambia, Uganda, South Africa, the Democratic Republic of Congo and Malawi.
2007 and 2008: Tobacco prices improve markedly not because of presidential threats but low supply as frustrated farmers abandon the crop. The same was the case in 2008 when at some point, prices hit $10 against new reserve prices of $2.20/kg as buyers scrambled for the leaf. But prices started turning nasty in 2009, so did Mutharika. Prices tumbled after more farmers returned to tobacco growing hoping to cash in on the record 2008 prices. Again, the laws of supply and demand, which served farmers well in 2007-2008, hit them hard in 2009. The collateral damage was unprecedented as casualties piled, what with the election fever.
March 2009: Government sacks Tobacco Control Commission (TCC) general manager Dr Godfrey Chapola, allegedly for disagreeing with the administration on arbitrary raising of minimum prices.
May 11 2009: A whistle-stop election campaign swing somehow ushers Mutharika into the Lilongwe Auction Floors where he engages in a heated exchange with buyers and threatens “to get nasty” over prices.
September 9 2009: Mutharika gets nasty as promised. Government deports four executives from major tobacco buying firms. Average tobacco prices tumble 23 percent in the year.
By 2010, TCC cuts minimum prices and announces them instead of the President as was the case previously. Mutharika skips opening of the floors.
March 14 2011: Mutharika returns to opening floors, starting with Lilongwe but avoids punching buyers and announcing minimum pricesâ€”a first since 2006, except for 2010.
March 15: He opens the new Chinkhoma Auction Floors in Kasungu where he both accuses and pleadsâ€”almost resignedlyâ€”with senior civil servants and Cabinet ministers not to leave the fight for better tobacco prices to him alone.
May 9 2011: Mutharika claims saboteurs are behind poor prices to destroy the countryâ€™s economic gains. In 2011, tobacco revenue drops by 30 percent due to record poor prices.
March 26 2012: He begs buyers to offer better prices. For the second year running, Mutharika avoids announcing minimum prices but starts lecturing farmers about market forces, his lack of power to influence prices and basically asks them to negotiate with buyers for better prices, something he himself failed to do. How are the poor and illiterate farmers supposed to do that? He also sounds tired and defeated. “Today, I didnâ€™t come to fight with tobacco buyers and growers. I just want to explain that the tobacco market is like any other market… I appeal to you [buyers] that you pay a little more for the leaf,” he said. The farmers were unhappy with this lack of resolve. The headline in the following dayâ€™s The Nation read: â€˜Tobacco growers angry with Binguâ€™â€”again.
What an interesting graph this steep trend would show! And why did it take Mutharika seven years to realise that this is about supply and demand?