Tama bashes IPS for lacking transparency
Tobacco Association of Malawi (Tama), the country’s largest growers’ representative body, has taken a swipe at Integrated Production System (IPS), commonly known as contract system of selling the leaf, for allegedly lacking transparency on loan packages.
IPS generally provides for contact farming of tobacco and direct facilitation of growers by processors and buyers.
The system is running side by side with the traditional auction system, but since its approval by government in 2012, it has been a subject of intense debate with other tobacco stakeholders blaming it for fuelling poverty, especially on farmers under the auction system.
“There is need to provide clear information to beneficiaries from the onset,” said Tama president Reuben Maigwa in Lilongwe last week during the association’s 27th congress graced by Vice-President Saulos Chilima.
Maigwa said it would have been better if government created an agriculture bank where farmers could easily access farm input loans at reasonable interest rates as opposed to the current situation in which farmers are “producing to enrich commercial banks whose rates are exorbitant and detrimental to economic empowerment of rural masses”.
He accused some tobacco-buying companies for venturing into farming, saying such a situation is a conflict of interest.
Maigwa also condemned some tobacco buyers who force farmers not to join Tama if they are to access farm inputs.
“This is clearly wrong and borders on corruption,” he said, urging government to address the concerns as a matter of urgency to ensure that farmers are protected from exploitation.
On a positive note, Maigwa said the ongoing tobacco marketing season has shown an improvement in the national accumulated average selling price of $1.71 (K769.50) per kilogramme (kg) over last year’s $1.62 (K729) per kg during the same period.
But he said there is a worrying trend in which the rejection rate on better quality leaf under auction system is hovering well above 36 percent.
Reacting to the concerns by Tama, Chilima said government will critically look into the concerns raised.
He admitted that the tobacco sector, which contributes about 60 percent of the country’s foreign exchange earnings, is currently crippled by several challenges.
Recently, Minister of Agriculture, Irrigation and Water Development Allan Chiyembekeza admitted that tobacco contract has own fair share of challenges.
Despite the system having several advantages, he cited duplication of contracted growers among tobacco buying companies, systems slowness, weak enforcement of regulations as some key challenges rocking the system.
Other challenges include low bargaining power among smallholder farmers for good prices due to high illiteracy levels.
