MalawiÃ¢â‚¬â„¢s tobacco industry last year lost an estimated $155 million (about K26 billion) in revenue arising from poor quality leaf that flooded the countryÃ¢â‚¬â„¢s main auction floors, the Farmers Union of Malawi (FUM) has calculated.
FUM president Felix Jumbe disclosed this in an exclusive interview with Business News in Lilongwe on Thursday when asked to summarise the 2011 tobacco marketing season, which was dogged by depressed tobacco prices as well as high rejection rates, especially at the start of the market in March.
In 2011, Malawi earned $293 million (about K49 billion) in revenue from 236 million kg as compared to tobacco forex worth $416 million (about K70 billion) earned in 2010 from 220 million kg.
Last year, the national average price was $1.24 (K207.28) against the 2010 average price of $1.84 (about K307.28).
According to Jumbe, based on the official statistics from the Tobacco Control Commission (TCC), it means last year tobacco farmers lost 60 cents (K100.20) on each kg sold.
Jumbe said his union believes a drop in the national weighted average price for tobacco in 2011 was mainly on account of poor quality tobacco on the market, among other explanatory factors.
“On aggregate, it means our farmers lost close to about K26 billion and we attribute this to poor quality leaf arising from poor policy making within the agricultural system,” he said.
He stressed that since 1994, tobacco has been turned into “a political crop” which, he said, has been grown by unauthentic farmers.
The FUM president also cited a situation where most tobacco farmers are applying Farm Input Subsidy Programme (Fisp) fertiliser meant for maize farming in tobacco fields instead of using D Compound fertiliser suitable for tobacco.