Malawi gets tough on contract system

Malawi government, through the Ministry of Agriculture and Food Security, has formulated new regulations to govern the Integrated Production System (IPS) in tobacco production and marketing.

Among other requirements, the new regulations, which are scheduled for gazzetting, contracts between tobacco buyers and illiterate growers, shall be invalid unless a written translation is made into a language the illiterate grower understands.

According to the new regulations, the Tobacco Control Commission (TCC) may investigate complaints by any party to the contract regarding the fairness in terms of the implementation of the contract.

The proposed regulations were announced by controller of agriculture services in the Ministry of Agriculture and Food Security Grey Nyandule-Phiri during the 2013 tobacco industry seminar in Mangochi last week.

Nyandule-Phiri said under the proposed regulations, tobacco buyers shall identify growers for contracts either on their own or through grower associations.

“Growers and grower associations must every year negotiate with buyers on contract terms before buyers submit their contract agreement forms to the commission for inspection and clearance,” said Nyandule-Phiri.

He said under the proposed guidelines, contract forms will be filled in quadruplets, one for the buyer, one for the grower association and two to be given to the growers.

According to Nyandule-Phiri, where the buyers have arranged such financing, they are under obligation to a full disclosure of the loan amount including quantities of each input type, interest rates and any other related costs.

“Growers shall not register the same registration numbers with different buyers for as long as there is an active farmer stop order registered on that particular number.

“The commission shall use their database to ensure there is no double registration,” he said.

In an interview on Tuesday, TCC chief executive officer Bruce Munthali expressed hope that the new guidelines will help in effective delivery of services to tobacco growers in the country.

“It will make sure that all stakeholders in the tobacco industry operate effectively and reduce confusion on IPS,” said the TCC boss.