I am delighted to be here today to officially open the 2017 tobacco marketing season. This year’s tobacco growing season has been favoured with good weather patterns, suitable for tobacco and other crops. We have seen a beautiful crop on the selling floors. We have seen the harvest is of good quality that raises hope.
Tobacco is strategic and important to the Malawi economy. Apart from contributing greatly to the country’s foreign exchange earnings, it is also important in the socio-economic well-being and food security of our nation.
My Government is therefore promoting tobacco production and marketing as a way of empowering smallholder farmers in the rural areas.
My Government is also determined to continue promoting value addition to increase export earnings from tobacco through manufacturing of cigarettes.
Government wants better returns from tobacco. This is why we have ensured that the key policy reforms, including Integrated Production System (IPS), review of the Tobacco Act, the new tobacco grower registration system and investments in value addition are prioritized. Our tobacco industry reforms are intended to support the establishment of a transformative framework that will help to address systematic bottlenecks in the industry. This will stimulate increase in productive capacity and enhance linkages to the market. My Government will therefore continue with these reforms in order to create a win-win situation between the buyers and the farmers.
I am reliably informed that the support provided by tobacco buyers is through the Integrated Production System (IPS); and that it has enabled tobacco farmers to produce high quality leaf during this growing period, and must therefore be encouraged for the benefit of growers and the nation as a whole.
However, this support needs to be properly managed to the extent that farmers should be able to graduate from the dependency on loans.
Unfortunately, I have been receiving reports that tobacco farmers are getting increasingly indebted to micro financing institutions for the rest of their life. This is unethical and unfair. I therefore call upon officials in the Ministry of Agriculture, Irrigation and Water Development to work with the Tobacco Control Commission to put in place mechanisms that will provide farmers an opportunity to grow out of debts, and mature into self-reliance.
The Integrated Production System was introduced on the understanding that the engaged farmer can either be sponsored or not sponsored. This means farmer has adequate resources to finance the production. Surprisingly some buyers do not want to buy from contract farmers who are ready to sponsor themselves. This should stop immediately. As I said earlier, farmers should be able to graduate from loans and still produce tobacco under IPS. In this regard, I expect both the sponsored and non-sponsored farmers to be treated equally when it comes to marketing their tobacco. There must be no discrimination.
Ladies and Gentlemen; it is pleasing to note that the Tobacco Control Commission has developed a standard contract for the Integrated Production System, which defines the minimum terms and conditions of the contract between the farmer and the buyer, in order to address weaknesses with the previous contracts. I am confident that this will ensure that some of the problems I have just mentioned are addressed and that the famer is not unduly exploited. I therefore urge all buyers and growers to adhere to the provisions of this standard contract so as to create a win-win situation between both sides.
Considering the problems being experienced with tobacco globally, I wish to appeal to tobacco farmers to start diversifying into other profitable business ventures with the income they get from tobacco instead of spending all their hard earned monies on consumption. I would be pleased to see tobacco farmers growing other crops with tobacco, keeping livestock and evening engaging in other business ventures. However, for the time being it should be diversification with tobacco and not away from tobacco.
Ladies and Gentlemen; I have talked about support to our tobacco farmers largely because they produce the leaf that we all depend on. However, let me also take this opportunity to appeal to all tobacco farmers to adhere to good agricultural practices in order to maximize quality on production. And as you prepare for the market, I want you to manage your tobacco very well by grading and presenting it properly and ensuring zero tolerance on Non-Tobacco Related Material and nesting so that you get better prices. I also wish to appeal to you to remain calm as we start the marketing season and throughout the season.
You should desist from disrupting sales every time you encounter a problem or are dissatisfied with the prices offered for your tobacco. I know that the industry has structures and systems, spearheaded by the Tobacco Control Commission, for resolving any disagreements and conflicts. Make full use of these structures and systems. I want a peaceful tobacco selling season this year.
I am aware that this year, there is less tobacco than what the market is demanding. Therefore, I expect much better prices this year. Just like in the previous seasons, Government has set minimum prices for the different crops including tobacco. This is to ensure that the farmer gets a fair reward for his labour. As for tobacco, each grade and style of tobacco has a minimum price. I am reliably informed that these prices have been agreed upon with you tobacco buyers and other stakeholders through a series of discussions at different levels. Please treat these as minimum, not what you must always pay.
It is also my expectation that these market prices will indeed be based on market forces of supply and demand and that they will be different from one buyer to the other. My Government will not allow any tobacco buyers to collude and offer unreasonably low prices to growers. I will be monitoring the selling floors closely to ensure that your so called market prices are more than the protected ones.
Ladies and Gentlemen, I am concerned about the increase in cases of illegal cross border trade in various crops, including maize and tobacco among others. It is depressing to note that those involved are Malawians, a clear indication of the lack of patriotism on their part. The practice is illegal and must stop.
I have therefore ordered the Malawi Defence Force to deploy troops along border posts suspected to be used by smugglers of maize and tobacco and take to task anyone involved in the malpractice. I also appeal to the communities in border areas, and the Malawi Police Service to support the efforts of the Malawi Defence Force in combating this illegal practice. We should all of us show that we love our country by collectively dealing with this problem effectively and decisively.
I hope this 2017 tobacco marketing season will be smooth and of great benefit to the tobacco growers and Malawians in general. My expectations are that you will be running both the contract (IPS) and auction marketing systems side by side on a daily basis. My understanding is that tobacco farmers have already chosen which system they will be patronizing this marketing season. I therefore appeal to all tobacco buyers to effectively participate in both systems. I urge each one of you to play your part in the most fair and considerate manner. We are all in it together, and if one part fails we all go down.
With these remarks, I now have the singular honour and privilege to declare the 2017 tobacco marketing season officially open.
GOD BLESS YOU ALL AND OUR BELOVED NATION.