Market match, solace for contract farmers

Forty-one-year-old Dickson Limbikani is a tobacco grower from Malemia Village in Traditional Authority (T/A) Chingala in Lilongwe.

The father of six, Limbikani and his family have grown two hectares of tobacco this growing season.

However, with the delayed rains which began in January, it is an open secret that Limbikani and most farmers in the country will yield less from the green gold.

“The drought heavily affected tobacco as the leaf stayed for far too long on the nursery,” explains Limbikani, who is a contract farmer under JTI Leaf (Malawi) Limited, one of the buyers and processor of the leaf.

“Our main fear is that we may not get enough money from our tobacco this year to settle loans for inputs and remain with something for our livelihoods,” he adds.

But like most farmers under JTI contract farming programme, Limbikani has solace in Market Match, a JTI flagship programme aimed at helping famers to diversify crops to strengthen and increase their income base.

The Market Match started in the 2020/21 growing season and, according to JTI Malawi agronomy livelihoods manager Jones Thombozi, through the initiative, farmers are linked to financial institutions for inputs loans.

The farmers are also linked to viable and reliable markets for their produce at a price the two sides agree.

The complementary crops that farmers are encouraged to grow under the initiative are soya, beans and groundnuts.

Thombozi notes that although farmers already grow these crops every year, the difference brought by the Market Match is that it supports the farmer to grow the crops for commercial purposes.

He says: “While tobacco remains the mainstay of JTI business in Malawi, we want our growers to maximise their income by growing other crops.

“Through Market Match, JTI is like a link between the grower and financial institutions and also a link between the grower and the market.”

The initiative, which began on a small-scale as a learning process, has now expanded to six districtsof Mchinji, Lilongwe, Dedza, Dowa, Ntchisi and Kasungu.

JTI is extending the programme to the company’s tobacco farmers in Zambia and Tanzania.

In Malawi, JTI is working with Community Financing (Cofi) to implement Market Match. Tobacco farmers have embraced the scheme with no reservations, according to Cofi credit officer Thomson Matumbo.

He says: “We work with a number of companies and institutions and one of them is JTI, which approached us last year with the Market Match concept.

“We are happy to report that from the initial 400 farmers, we now have 1 200 farmers under the initiative.”

Cofi provides loans to farmers for the complementary crops and they pay back after harvesting and selling the same to the readily available markets.

Matumbo agrees with Thombozi that the Market Match encourages commercial farming with a focus on cooperatives model where farmers come together to satisfy the market with their pooled produce.

On inputs, Cofi provides financial resources for seed from 40 kilogramme (kg) to 200kg and the financing institution also links the farmers to Farmers Commodity Market, a readily available buyer of the farm produce.

Matumbo said they are impressed not only with the growing adoption rate of Market Match among JTI tobacco growers, but also by their loan repayment rate.

“Our loan conditions are flexible as we give the farmers space to pay after harvest and sale of their produce.

“Those who can pay in installments before harvest are also not restricted from doing so,” Matumbo says.

The JTI-Cofi partnership through Market Match is, perhaps, a timely solution to the anxiety and despair that the 2019 Tobacco Industry Act brought to contract tobacco farmers upon its enactment by restricting provision of inputs for non-tobacco crops.

The Act stipulates in Section 44 (3) under contract farming and marketing that in case of funded contract farming, production of alternative crops may be the term of the contract, but the buyer shall not provide the inputs for the alternative crops. 

The provision has remained a bone of contention between contract tobacco farmers and government, with the former calling for review of the Act.

When he toured JTI Tobacco Processing Plant in Kanengo, Lilongwe last November, Minister of Agriculture Lobin Lowe backed the Act, saying inputs for alternative crops that contract tobacco farmers used to get from their contract companies increased the burden of debt on the farmers.

However, he observed that government has always considered it a better solution to “engage a local institution to provide loans to the farmers for them to benefit”.

With JTI’s Market Match rolling, the weight of the existing law may be of little concern to the company’s 1 200 contract farmers, including Limbikani, who has this year multiplied his efforts in the crop diversification programme more than last year.

“In 2020/2021 growing season, I did not take it seriously and I intercropped soya with maize on a small patch that gave me only two bags of soya.

“With the soaring prices of soya in the year, the two bags fetched me nearly K100 000, and this stimulated me to go full swing this growing season,” he says.

Limbikani has now grown two hectares of soya and 1.5 hectares of groundnuts, apart from the two hectares of tobacco, which is giving little hope due to its delay in planting following the drought.

Even as tobacco is not promising, Limbikani’s hope to feed his family and educate his children remains intact in that the alternative crops will complement his main crop, tobacco, which is the country’s main foreign exchange earner.