The Tobacco Commission (TC) says it is not applying the new Tobacco Industry Act retrospectively, parrying aside accusations levelled against it by some stakeholders in the tobacco sector.
The development comes as AHL Group and Tobacco Association of Malawi (Tama) has been questioning the immediate implementation of the new law that was enacted midway in the current tobacco marketing season.
The two institutions raised eyebrows as regards TC implementing some provisions of the law while leaving other provisions, a move TC said was to allow for a transition period into the next production season.
For instance, the AHL Group general manager Graham Kunimba and Tama chief executive officer Felix Thole wondered why the TC was implementing the provision on tobacco overproduction in the middle of the marketing season when actually production was made before the law was enacted.
However, TC chief executive officer Kayisi Sadala said on Wednesday in a written response that the allegation of applying the law retrogressively is misplaced as the issue is duly covered in the law under transitional clauses.
He said: “In short, the law states that anyone who was registered to grow tobacco under the repealed law will be deemed to have been registered and licensed under the current law; hence, the immediate applicability of the penalties herein.”
Sadala urged growers to ensure that they adhere to the allocated quota as it will guarantee better prices at the selling floors.
The new law provides that in the event that excess tobacco is sold at the market, 75 percent of the revenue realised from the sake should be in the custody of the Tobacco Commission (TC) as a penalty while the farmer gets the remaining 25 percent revenue.
The idea is to prevent tobacco overproduction on the market as a way of sanitising the production value chain and ensuring better returns from the tobacco industry.
So far, the third tobacco crop estimate shows a production of about 193 million kilogrammes (kg) against the volume of about 160 million kg qualified to be sold which leaves about 30 million kg as excess.
This means 75 percent revenue from the 30 million kg will go to TC while farmers will only get 25 percent.
“This is a big blow to farmers because it means they will unprecedented losses. Our appeal is that why can’t we wait till next year for full implementation of the provisions because the law came in while the farmer already had a crop on the ground. It will be better if the implementation starts next year when everybody will be aware of what is expected,” bemoaned Thole.
While Kunimba said AHL Group is not against the new law, but the law was framed to protect tobacco growers and taking away 75 percent leaves them more vulnerable.