The Farmers Union of Malawi (FUM) president Alfred Kapichira Banda says tobacco growers on contract need to be involved in price formulation because they work directly with tobacco buyers.
Speaking in an interview Lilongwe last Thursday, Kapichira Banda said it is disheartening that when farmers are entering a contract with companies, they are never told at what price their tobacco is going to be bought once the markets open.
“In contract farming, we are given seeds and pesticides. On top of that, the company we are contracted to sends advisors to guide us on how we can produce the best leaf.
“Since we agree with the tobacco companies on how much tobacco we are supposed to produce, my view is that we should also agree on prices according to grades before we have produced the crop,” he said.
Kapichira Banda said it is not proper for government to formulate prices with the tobacco companies sidelining the grower questioning why the crop is sent to the auction floor instead of being bought at the farm.
“Maize companies such as Demeter, Monsanto and Seed Co buy maize grown on contract at our farms. Why is it that tobacco companies want us to take our crop to the auction floors?” he queried.
Kapichira Banda argued that it could have been much better if the tobacco companies buy the crop straight from the field because the growers could easily lobby for better prices.
But Tobacco Association of Malawi (Tama) chief executive officer Graham Kunimba disagreed with Kapichira, that tobacco companies must be buying the crop at source because it is a protected crop.
“Tobacco is different from all the other crops and buying from the farm is not feasible. This is a cash crop that is very sensitive because it is the back-bone of the Malawi economy.
“What we could advocate as Tama is to have more selling points which are well structured to bring in more transparency,” he said.
He, however, agreed with FUM that in an ideal situation, farmers need to know the price at which their tobacco will be bought before they venture into their gardens to know how much profit or losses they are going to make.
“I agree with the concerns from farmers on the process of price formulation because they are being told how much a kilogramme (kg) is going to cost after production.
“It could have been good if farmers were told the prices before they have grown the crop because it would reduce tension and misunderstandings at the auction floors,” said Kunimba, adding that for the first time this year, Tama was not involved in the minimum price formulation.
Soon after opening the auction floors at Limbe in Blantyre, farmers protested poor prices, forcing the closure of the market.