Phindu Tobacco Growers Association (PTGA), the country’s second largest tobacco grouping, has slammed continued implementation of Integrated Production System (IPS) of growing tobacco, saying it still has glaring gaps that negatively affect its registered members.
PTGA, which held its annual general meeting (AGM) in Lilongwe on Tuesday, said IPS or contract farming continues to operate under the outdated Tobacco Act.
In absence of the appropriate legislation, the association’s chairperson Abel Kumwenda argued that farmers’ rights may not be protected and fulfilled in the event of exploitation.
Government fully adopted IPS in May 2012 with 80 percent of all the tobacco sold on IPS and 20 percent on auction.
However, its implementation has been under intense debate with other tobacco players arguing that IPS is perpetuating poverty among most contracted tobacco growers.
In his address to over 400 farmers who attended the AGM, Kumwenda said while the introduction of IPS created hope among growers, not much awareness has been done to sensitise them to key components of IPS.
“Framers observe that prices are not disclosed in the contracts and this makes it difficult to plan for amounts of inputs,” he said, adding that terms and conditions of the loans are also not fully disclosed to farmers, making it tough for growers to plan their income.
Kumwenda said farmers are also not involved in loan negotiations with commercial banks that provide loans, adding that even identification of banks is not consultative.
“There is need for early disclosure of conditions to farmers under which they are getting the loans, for instance on the actual amount of the loans, lending interest rates and the money the farmer is expected to pay back,” he said.
Earlier this year, Farmers Union of Malawi (FUM) also condemned IPS, faulting the system of lacking transparency especially when it comes to loan packages.
Government has backed the system, saying it is the only way that can improve the tobacco industry.