Tobacco Association of Malawi (Tama) chief executive officer Mathews Zulu has hailed Export Development Fund (EDF) for its diversification efforts by offering farmers pre-season contracts to grow rice.
But Tama, an association of 200 000 tobacco growers, has cautioned the farmers to understand the contracts before signing.
EDF, a development finance institution with a particularly focus on exports, recently secured a huge market for kilombero rice and as part of promoting production of the crop for the export market, they are offering pre-season contracts to farmers with a minimum of one hectare earmarked for rice production.
In an interview yesterday, Zulu said the move by EDF is line with Tama’s diversification objectives as they have established a department responsible for diversification within the association.
He said Tama is almost through with its diversification plans as they aim to go towards contract marketing as well.
“Contract marketing is not easy because most of the buyers are not open on the price issue, the buyers are sceptical and do not include prices on the contracts which is not good for the farmers.
“We want to see farmers sign such contracts with EDF to produce and sell at indicated prices, but the farmers should read and understand the contract before signing,” he said.
According to African Institute of Corporate Citizenship (Aicc), in the previous growing season, Malawi failed to meet the global rice demand despite having potential markets in Africa, Asia and Europe.
Efforts to speak to EDF were not successful yesterday, but its chief executive officer Rodrick Wiyo is on record as having said rice growers are not fully empowered and integrated in the global value chains despite the National Export Strategy (NES) including rice as one of the strategic crops that has potential to generate foreign exchange.
In an earlier interview, managing director of Mtalimanja Holdings Limited (MHL) David Kamchacha said Malawi has the potential to earn about K293 billion from rice as the crop is on high demand on the global market.