At a time tobacco is fast losing its charm, Tobacco Association of Malawi (Tama) plans to diversify into other crops in what experts say is a survival mechanism amid uncertainty on the crop’s future.
The move by Tama, an association of 200 000 farmers, comes amid declining revenue from the leaf over the past five years.
Figures from Tobacco Control Commission (TCC) show that tobacco revenue has since 2010 declined by a third in dollar terms from $410 million to $275 million this year.
Output from the crop, touted as the country’s main export earner, which contributes about 13 percent to the gross domestic product (GDP) and supports about three million Malawians directly or indirectly, has been fluctuating, with last season’s output reaching a record low of 124 million kilogrammes (kg).
In an interview yesterday, Tama chief executive officer Mathews Zulu said the diversification plan is in response to the demands from their members to grow other crops on contract to survive the turbulent times.
Out of the 49 cooperatives under Tama, three have already signed contracts with Chibuku Products Limited to start growing sorghum beginning this year.
“Apart from sorghum, we are also looking into crops such as soy beans, sunflower, groundnuts and other commercial crops that tobacco farmers who are our members are now growing.
“In this new strategy, we want to go towards contract marketing so that farmers should be producing for the market and not producing before they identify the market,” he said.
Tama has also opened seven agro-dealer shops where it plans to sell seeds, herbicides and fertiliser to their members to facilitate the transformation and also plan to register a commercial company called Tama Enterprises.
Zulu said Tama will then be a subsidiary of Tama Enterprise and will still be involved in tobacco.
Tama is not alone to take this direction. Alliance One Tobacco Company has also diversified and is growing legumes in Dowa, one of the districts that is traditionally known for growing tobacco.
Earlier, the firm’s managing director Hugh Saunders said the diversification initiative is a response to the pressure that is threatening the future of tobacco, especially burley, and to also sustainably grow flue-cured tobacco.
At policy level, government is still glued to tobacco as officials have said a number of times that Malawi will still continue to grow the crop.
Ministry of Agriculture, Irrigation and Water Development Principal Secretary Erica Maganga was not immediately available yesterday to comment on the direction Tama has taken.
But Ben Kaluwa, an economics professor at Chancellor College, a constituent college of the University of Malawi, yesterday said the move by Tama is a wake-up call to government and other tobacco stakeholders that there is need to diversify.
“Over the past years, tobacco has not been performing well in terms of revenue, and coupled with the global anti-smoking lobby, the future does not look good,” he said.