Tobacco Association of Malawi (Tama) has proposed to tobacco industry stakeholders that stiff penalties should be meted out to tobacco growers who exceed their quotas.
The Proposal by Tama comes at a time when the country over produced this year by about 14 million kilogrammes.
The proposal is contained in a paper titled Minimum Prices in an Oversupply Situation presented at a recent Malawi 2015 Tobacco Industry Seminar held in Lilongwe.
Tama head of operations Nixon Lita suggested in the paper that overproductuion affects prices.
“A hefty fee [should] be agreed for every kilogramme [kg] sold above the licensed quota. This would ensure discipline in the next season,” said Lita.
The fees collected, Lita suggested, could be utilised for industry initiatives
Tobacco demand for 2015/16 growing year is down eight percent after buyers indicated their levels of demand to the Tobacco Control Commission (TCC).
Early this month Minister of Agriculture, Irrigation and Water Development Allan Chiyembekeza also expressed his disappointment over continued over-production of tobacco, which he blamed on the industry’s failure to manage crop size in line with demand by the buyers.
This year Malawi sold 192.7 million kg of all types of tobacco against a trade requirement of 179 million kg.
In 2014, Malawi also over produced the leaf by eight percent.
But reacting to Tama proposal, TCC chief executive officer Albert Changaya yesterday said the industry cannot just start implementing the penalties as there are proper procedures that need to be followed.
On his part, National Smallholder Farmers Association of Malawi (Nasfam) chief executive officer Dyborn Chibonga suggested an effective mechanism of managing overproduction, calling for multi-stakeholder engagement in the industry.