Payment delays irktobacco farmers
Tobacco farmers have expressed disappointment with the time it is taking to have their accounts credited after sales, saying the delay is affecting their livelihoods.
Despite the current Tobacco Industry Act not specifying the period within which banks should make payments to farmers, AHL Group, formerly Auction Holdings Limited, facilitates the payments within 24 hours.
Speaking in an interview on Tuesday, Tama Farmers Trust president Abiel Kalima Banda said most farmers are yet to receive their money, three weeks into the tobacco marketing season.
He said: “Apart from uplifting our livelihood, this money is used to settle other obligations but it is sad that we are not getting the money on time. Farmers have been forced to get loans yet they have already sold their crop.
“We have been told to remain patient as payment processes are being handled, but the question is for how long are we going to wait?”
In an interview, Tobacco Commission chief executive officer Joseph Chidanti Malunga, while acknowledging that farmers are struggling to access funds after sales, indicated that the regulator is engaging banks to correct the situation.
He said: “We appreciate that there could be some challenges in the system, but we do not expect this to take long.
“We are aware that payments are facilitated within 24 hours and it is our expectation that farmers’ proceeds will be reflected in their accounts within that time or within a reasonable time.”
AHL group general manager for tobacco sales Graham Kunimba said they try to ensure that farmers get their proceeds in good time.
He said: “We close sales at 1pm after which we quickly send invoices to buyers.
“Normally, the buyers send through the money the following day and we quickly wire the payments to the banks. How the funds are handled after this is beyond us.”
When drawn for a comment on the matter, Bankers Association of Malawi chief executive officer Lyness Nkungula asked for more time.
After two weeks of sales, tobacco earnings have peaked at $16 million (about K16.42 billion) from eight million kilogrammes (kg), surpassing earnings realised during the same period last year at $542 000 (about K 556.36 million) from the sale of 388 000 kg.
