With the tobacco marketing season in progress, the Tobacco Association of Malawi (Tama) has warned farmers against defaulting repayment of loans to tobacco merchants in the Integrated Produtcion System (IPS).
Tamas chief executive, Graham Kunimba said this after the association noted that some growers who acquired farm in-put loans from the merchants are selling their leaf using numbers different from the ones the Tobacco Control Commission (TCC) registered.
Kunimba said the farmers are doing so to dodge paying back the loans, blackening the future of the system.
“Farmers need to be compliant all the time if we are to make strides in the industry. Merchants invested money through farm inputs and the buying companies need to get back what they invested,” said Kunimba.
He said it was imperative that the farmers sell through contract marketing if their tobacco was registered as such and not selling it on the auction system. Kunimba noted that this trend could derail the attainment of the Government approved volume ratio of contract sales to auction sales. Under the IPS, 80 percent of the crop this year will be bought on contract while 20 percent will be sold on auction.
Kunimba said Tama is always available to take up issues concerning growers to responsible authorities whenever farmers are in dilemma.
“Tama is collaborating with stakeholders within the tobacco industry to see to it that the IPS is implemented successfully as we advance the growers’ interests that are at our heart,” he said.
Through the IPS, buying companies gave loans to farmers on an agreement that the loan provider would be the buyer of the leaf produced by that particular beneficiary.