JTI Leaf Malawi has released K581 million to cushion its 8 000 contracted growers from the impact of Covid-19 and to curb temptations to sell the leaf to vendors.
The money is in form of collateral that tobacco growers deposit to JTI Leaf Malawi account charged at K5 000 per hectare as a commitment fee to enable them access loans for tobacco production.
Speaking during a virtual media engagement on Thursday, JTI Leaf Malawi corporate affairs and communications director Limbani Kakhome said the money will help contracted growers to survive the economic impact of Covid-19.
He said every year, JTI growers deposit a sum of money as loan security to enter into a contract with the company. The money is given back to growers as collateral release to help them with their day-to-day needs.
“Tobacco production is quite involving and as a company, we felt we should lift the financial load off the shoulders of growers by giving them back the money they deposited with us as collateral at the start of the season,” said Kakhome.
Earlier, the Tobacco Commission (TC) warned tobacco vendors and those planning to venture into vending that they will be punished as stipulated in the Tobacco Industry Act.
TC chief executive officer Joseph Chidanti Malunga said: “The strong message we are sending to people is that if they want to buy or sell tobacco, it has to be through the auction floors.”
Tama Farmers Trust chief executive officer Nixon Lita said vendors buy tobacco from unlicensed growers and some is stolen from licensed tobacco growers.
He said: “Since vendors lack expertise, their tobacco is poorly presented on the market, painting a bad picture of Malawi tobacco.”
Tobacco is still touted as the country’s main foreign exchange earner, bringing in about 60 percent of forex and contributing about 13 percent to the national economy.