Mist over revised tobacco law provision

Ministry of Justice and Tobacco Commission (TC) are non-committal on whether the revised Tobacco Industry Act will include a clause allowing tobacco buyers to finance production of food crops such as maize and legumes.

The Nation sources confided that amid the persistent food shortage facing the country, there were plans by government to reintroduce in the Tobacco Industry Act a provision to allow tobacco buyers to provide loans to farmers to produce non-tobacco crops.

Section 45(3) of the Tobacco Industry Act, which allowed tobacco buyers to extend their contracts with farmers to non-tobacco crops, was removed in 2019 amid complaints from some farmers who argued that the arrangement threatened their gains from tobacco.

But sources have indicated that discussions are at an advanced stage to have this provision brought back as part of measures to improve national food security.

Meanwhile, Ministry of Justice has confirmed that the Tobacco Industry Act (Amendment) Bill will be tabled during the Mid-Year Budget Review Meeting of Parliament which starts today to December 8, but has remained dodgy on the status of this provision.

TC spokesperson Telephorus Chigwenembe said although the Commission took part in the review of the 2019 act they are not certain if this particular provision will be part of the bill.

He said: “The issue is that although there is input from Tobacco Commission and other industry players, ultimately, it is government, through relevant ministries, that frames the final version that goes into the Bill.”

In a written response, Ministry of Justice spokesperson Frank Namangale said the Bill was a priority during this meeting and will be published this week, but could not confirm if Section 45(3) was being reinstated.

He said: “We will not commit to confirm inclusion or removal of Section 45(3) from the 2019 Act.”

Minister of Agriculture Sam Kawale was yet to respond to our questionnaire submitted last Friday despite reminders and his own promise to respond.

Since the introduction of tobacco contract farming, tobacco-buying firms have been supporting non-tobacco crops with inputs and cash transfer during lean period to ensure that farmers were food sufficient.

But in 2019, Parliament removed Section 45(3) after some growers complained of low profit margin from tobacco due to deductions effected to recover the loans provided to non-tobacco crops.

In an analysis released last month titled ‘Assessing the impact of Section 45(3) of the Tobacco Industry Act (2019)’,   economist and former Economic Planning and Development principal secretary Winford Masanjala argued in favour of reintroduction of this section. 

Farmers Union of Malawi chief executive officer Jacob Nyirongo, while agreeing that this provision aligned well with crop diversification and food security agenda, advises that it should be optional to farmers.

He said the downside of the arrangement is that it does not provide farmers with a market to enable them pay back loans.

But National Small Holder Farmers Association of Malawi chief executive officer Betty Chinyamunyamu welcomed the reintroduction of the section. However, she urged for more transparency in the management of the contracts and that access to these loans should be a matter of individual choice.