Disagreements between Illovo Sugar (Malawi) plc and some sugarcane growers refuse to die with the latter referring the issue to Competition and Fair Trading Commission (CFTC) to address claims of unfair trade practices.
The development follows prolonged disagreements between sugarcane growers and the Malawi Stock Exchange-listed sugar manufacturer on the division of proceeds.
Currently, sugarcane growers get 60 percent of the proceeds while the Illovo gets the remaining 40 percent.
In a statement, sugarcane growers from Dwangwa, Nkhotakota led by Nkhotakota North legislator Henry Chimunthu Banda want an upward revision of the division of proceeds to enhance revenue payable to farmers.
The growers want removal of what they claim is a misleading clause in their agreement with Illovo.
The clause indicates that Illovo will be buying sugarcane from out-growers, but on the contrary, the manufacturer mills sugarcane produced by out-growers, packs the commodity, transports it to the market and sells it on behalf the out-growers.
Sugarcane growers also want to have access to all accounts, records, invoices and other documents relevant to the assessment of any price paid by Dwangwa Sugar Corporation for cane supplied to it.
Reads the statement in part: “Surprisingly, Illovo has consistently and persistently grown cold feet to allow farmers access this information. Our demand is to have this provision implemented in full.
“With immediate effect, the Cane Supply Agreement must highlight molasses as a stand-alone product of sugarcane processing and its economic value to the out-grower must be clearly acknowledged.”
CFTC spokesperson Innocent Helema, in an interview, said the technical committee of the board of commissioners of CFTC will meet today in Lilongwe to receive investigation reports and adjudicate on cases of competition and consumer protection.
On her part, Illovo Sugar (Malawi) plc communications and stakeholder relations manager Olive Kawelama in a written response on Tuesday said the company is aware of the issues and discussions have been ongoing since last year.
“We shared our responses to CFTC last year,” she said.
In its recent study of Malawi, the Food and Agriculture Organisation of the United Nations proposed a review of the cane supply agreement between Illovo and cane out-growers, arguing it wasdisadvantaging growers.