Malawi reviews tobacco marketing systems
Government has directed that both contract and auction tobacco marketing systems should run on a day-to-day basis, a move which has stirred excitement among major tobacco stakeholders.
Minister of Agriculture, Irrigation and Water Development Allan Chiyembekeza and Tobacco Control Commission (TCC) chief executive officer Bruce Munthali confirmed some major changes in the two marketing platforms in separate interviews with Business News.
Since Wednesday last week when the tobacco market opened at Lilongwe Auction Floors, the two systems have been running side by side and the situation was similar at Chinkhoma floors on Friday, according to Business News observation.
The changes come on the backdrop of unrelenting complaints from tobacco growers, mainly those who have been selling their tobacco through the auction platform since 2012 as they were only allocated two days.
Chiyembekeza revealed that government has resolved to change the initial allocation of the 2015 tobacco volume to 70 percent contract and 30 percent auction.
When former president Joyce Banda introduced the three-year-old contract farming system or Integrated Production System (IPS) in 2012, it ensured that 80 percent of tobacco was sold through IPS with the remaining 20 percent sold under auction system.
However, such an arrangement has over the years been subjected to an intense national debate with auction farmers complaining that they were discriminated against as they were only allocated two days to sell their tobacco in a week.
“This year for the first time, we are selling tobacco throughout all five days through both auction and contract and so there is no discrimination and I wouldn’t say there is any controversy this year,” said Chiyembekeza.
The minister said the prevailing 70/30 percent ratio is based on the number of growers that have been registered this year on contract and auction systems.
On his part, Munthali said last year, the commission reviewed numerous complaints from auction tobacco growers over the number of days being allocated to them in a week.
“Last year, we received a lot of concerns from farmers under auction system, saying they were disadvantaged in terms of number of days allocated to them and so we presented the issue to our line ministry; hence, the change this year to have all the system run side by side in five days,” said Munthali.
Reacting to the same, Tobacco Association of Malawi (Tama) chief executive officer Graham Kunimba on Friday said his growers are happy with the new arrangement as it will level the playing field to both contract and auction systems.
