Integrated Production System (IPS) tobacco growers who did not get any financial support from buyers have complained that tobacco buying companies are not honouring their side of the contracts.
The farmers argued that the buyers are terminating the contracts they signed before exhausting the agreed quota of the leaf.
Growers Business Review interviewed at Lilongwe Floors claimed buyers are victimising them as they are being forced to sell their tobacco on auction yet they signed agreements to sell their leaf under contract or IPS.
A grower from Mtunthama Farmers Club in Lilongwe, Paulo Kapalamba, said in an interview the way he is selling his tobacco this year with his contracting company, Alliance One, is different from last year.
He said this year, the leaf, which accounts for 60 percent of the country’s foreign exchange earnings, is taking too long to be bought.
For example, Kapalamba said his tobacco which was sent to the floors on April 30 is yet to be bought.
He said: “We are also being told that our quota is going to be suspended before I even exhaust selling the amount of tobacco we agreed.
“I am only hoping that Alliance One changes its mind and the contract.”
His colleague, Mussa Seveliano from Gumulira Village, Traditional Authority (T/A Mavwere in Mchinji, said he was expecting to get at least K4 million, but with the prices prevailing on the market, he will get less.
AHL Group, formerly Auction Holdings Limited , has acknowledged that there are indeed problems on the market regarding prices, rejected tobacco and the implementation of quota system as far as non-financed and financed tobacco contract farmers are concerned.
The firm’s corporate affairs manager, Mark Ndipita, said in an interview they have called for the abolition of non-financed contract farmers, accusing this part of the system of bringing chaos on the market.
He said allowing buyers to recruit growers who have not even benefited from farm inputs and extension services during the growing season will likely reduce competition on the auction system.
Said Ndipita, “As AHL Group, we think that the non-funded category of contract growers is bringing this problem. Buyers are being allowed to recruit growers to sell on contract even when they did not provide support to the farmers.”
However, Tobacco Control Commission (TCC) chief executive officer Albert Changaya has dismissed the claims growers, saying they are bordering on ignorance.
He explained: “May be this was happening last year, but this year there are no such cases because we know that farmers can sue the buyers for terminating the contract right before its expiry. n