Tobacco Control Commission (TCC) chief executive officer Bruce Munthali has assured farmers complaining about their tobacco being bought below the minimum set price that they will get their money back due to the automatic price adjustment system.
The automatic pricing system (APS) was introduced five years ago to safeguard farmers from being exploited by buyers and once they get prices lower than the set minimum price by the TCC, the APS captures the anomaly.
The APS captures any discrepancies in pricing since any tobacco grade has a set minimum price which buyers are supposed to adhere to.
Last week, when Business Review visited the auction floors most farmers selling their tobacco under contract system complained that their tobacco is being bought below set minimum prices.
For example, tobacco belonging to Lobin Mangira, a farmer from Khongoni, which was classified x3LJ was bought at $1.80 and yet the set minimum price was $2.40.
Kaponda Makiyi of Simphasi whose leaf was classified as C3L was bought at $1.90 and yet the set minimum price was $2.40.
But speaking in an interview last week, Munthali said any farmer whose tobacco is bought below the minimum set price gets his money back through the APS.
He said: “There is an automatic price adjustment system which we deliberately put in place to safeguard the welfare of farmers. If a buyer gives our farmers prices below the set minimum, we easily know because of this system. Farmers must not get low prices and we plead with buyers to give our farmers prices above the set minimum prices.”
On complaints surrounding the integrated Production System (IPS) Munthali said Malawi has no choice because it is the customer who wants to trace where exactly tobacco is coming from.
“Globally things are changing and there is no way we can run away from IPS. We know there could be some teething problems, hence, the need to have a robust legal framework because the one currently in use is weak,” said Munthali.
Minister of Agriculture, Irrigation and Water Development Allan Chiyembekeza said prices this year are fair compared to the previous years.
Meanwhile, the sale of flue-cured tobacco at Lilongwe Auction floors sold under the auction systems has since been suspended due to disagreements on price.