Price instability threatens contract tobacco farming

Instability of tobacco prices is believed to be forcing some farmers to shy away from engaging in contract tobacco farming.

This was observed during a consultative meeting of members of Nkumbiza Farmers’ Cooperative and Church Aid in Relief and Development (Card) in Mulanje last Thursday.

One of the farmers, Henderson Jack of Chinyama Village in Mulanje, said although he understands contract tobacco farming the price instability was scaring away some farmers.

“Take an example of pigeon peas which were selling at K250 per kilogramme at the onset of the harvesting season. Right now it is fetching an amount of K550 to K580 per kilogramme depending on the buyer,” he said.

“So, suppose we had already engaged ourselves in a contract with a certain buyer not knowing that prices would increase this year, we would have accepted low prices like K350 at which they usually buy our pigeon peas, only to cry foul today.”

He added that farmers do not have a negative attitude towards contract farming but they feel insecure with price adjustments that take place within short periods of time in a particular produce.

Card district manager for democracy consolidation programme Steve Mkuzi said the worries were genuine, and there was need for government and stakeholders to intervene on the existing weak price elasticity in farm produce business.

“Unexpected changes in the price of farm produce cause a lot of frustration to farmers especially when they are on contract.

“Buyers would want to negotiate for medium or lower prices more especially when they foresee a possibility of a great rise in the price of the commodity. In the end farmers are demoralised and opt not to be on any contract and sell when the price is better,” he said.