Government backs tobacco’s IPS
Minister of Agriculture, Irrigation and Water Development Allan Chiyembekeza has backed the Integrated Production System (IPS) of growing tobacco, saying the quest for quality leaf stands to benefit farmers.
The three-year-old system, in which buyers offer farmers necessary inputs, extension services and cash injections on contract, has come under scrutiny with some legislators using the ongoing session of Parliament to denounce it for allegedly impoverishing the farmers.
The minister visited contracted farmers in Mzimba on Friday and Rumphi on Saturday to hear the growers’ voices on the proposals to abolish the system, which ensures that 80 percent of tobacco is sold through IPS with the remaining 20 percent sold under the traditional auction system.
Tobacco auctioneer Auction Holdings Limited (AHL), Farmers Union of Malawi (FUM) and some tobacco industry players have criticised IPS for disadvantaging farmers.
But Chiyembekeza declared: “Abolishing the system? I don’t think so. It appears this is just a problem of perception.
“Everywhere I have gone, the farmers themselves say they are happy with the system, that it is benefiting them. Their crop looks much better than what you see in fields owned by standalone farmers.”
The minister made the trip along with Tobacco Control Commission (TCC) and officials from Limbe Leaf Tobacco Company, Alliance One Tobacco (Malawi) Limited and JTI Leaf Malawi Limited.
In Mzimba, Kendricks Mwanza, a tobacco farmer, commended IPS for transforming him into a commercial farmer.
During the three years of working with JTI, the farmer has bought a three-tonne truck, built a four-bedroom house and has managed to send his son to school.
“Before I embarked on contract farming, I could not afford to take care of a small plot of tobacco. My crop used to be poor because the prices of fertiliser and chemicals were beyond my reach,” he said.
Last year, Mwanza sold bales worth K26 million (US$57 778), out of which K11 million (US$24 444) accounted for loan repayment and K5 million (US$11 111) for tenants.
Nonetheless, the farmer echoed widespread dissatisfaction with banks, which pay them in dollars when the kwacha is gaining value and switch to the local currency when the dollar is falling.
TCC chief executive officer Bruce Munthali said the malpractice will be top of the agenda when the minister and other stakeholders in the tobacco industry meet the Bankers Association of Malawi (BAM) next month.
“Government will continue taking steps to improve the quality of our leaf and safeguard the interests of the farmers from exploitation,” he said.
According to the buying firms, under IPS, direct involvement with the farmers is increased with the quality of the country’s leaf significantly improving.
Termed ‘green gold’, tobacco is the country’s most important cash crop, which accounts for about 60 percent of foreign exchange earnings and about 13 percent to the national economy.
