The rising fertiliser prices have hit tobacco growers hard, raising fears of reduced output of the country’s main foreign exchange earner and alternative crops such as maize.
In an interview on Thursday after a media tour of village clinics, school blocks and farmer houses, among others, in Rumphi and Mzimba, JTI corporate affairs and communications director Limbani Kakhome said farmers are affected because they cannot get input loans for maize.
He faulted the Tobacco Industry Act for inconsistencies which are affecting farmers as the law bars provision of loans for alternative crops while on another hand some auction growers cannot get input loans.
Kakhome said: “In our case, 100 percent of our growers wanted to get the alternative crop inputs on loan. We told them we can only provide them on cash at K25 000 per 50 kilogramme bag versus a commercial market price of between K38 000 and K40 000 per 50 kg bag.
“Out of 4 500 farmer clubs that we contracted, only 1 800 were able to buy on cash. People are not sitting on cash out there to afford the inputs. We see that there is an urgent need to go back to Parliament and look at the Tobacco Industry Act’s pinpoints.”
Kakhome said they believe that evidence should be able to support policies and legislation, saying when the law was put in place, they provided suggestions to the government, stakeholders and the Tobacco Commission for a review because it is counterproductive to the diversification agenda.
He said it would be interesting to see the outcome this year because growers will struggle to secure their tobacco crop as they need to also invest in maize production.
“Tobacco producers who are contracted produce between six to 10 percent of total maize production in the country and if they do not have the inputs, especially now that fertiliser prices are skyrocketing, it means we might have consequences that we may not be able to deal with in the short-term,” Kakhome said.
In a written response, Tama Farmers Trust chief executive officer Nixon Lita said fertiliser is one of the most important inputs in tobacco production and with the sharp increase in the price of the commodity, farmers will have to dig deep into their pockets to manage a tonnage they had planned to produce.
He said: “Much of the production these days is coming from contracted farmers as such there is an expectation that required quantities will be provided but that will lead to a corresponding increase in loan volume.
“Farmers who sponsor own production mostly selling under auction system will face serious challenges.”
In a research paper on why Malawi is experiencing a spike in fertiliser prices, Mwapata Policy Institute research fellow Christone Nyondo said government has no control over the cost of fertiliser as the largest price mark is influenced by external market forces at around 90 percent.
“For instance, free on board prices jumped by around 112 percent compared to the same time last year and considering port charges and other transport logistics, we have seen that 90 percent of charges are influenced at global level,” he said in an interview on Friday.
For poor farmers who cannot afford fertiliser on their own, the Malawi Government has this year allocated K142 billion for AIP to benefit 3.5 million farming households.
Out of the allocated money, K124.74 billion is earmarked for fertiliser purchases while K1.26 billion is meant for buying goats and K12.25 billion for seed.