Auction Holdings Ltd. (AHL) has alleged that some tobacco buyers operating in Malawi are indulging in acts of sabotage aimed at convincing farmers that they would be better off selling their tobacco through the contract system rather than over the auction floors, according to a story by Brian Itai for the Nyasa Times.
Itai said that the use of the integrated production system (IPS), or contract system, had divided opinion, with some people calling for a review of whether farmers were benefiting enough from the system.
AHL receiving manager Samuel Mkhutche said that though buying companies wanted to force IPS on farmers, it had been proven that the farmers were not reaping the rewards they had been expecting.
“What is happening is that the buyers are just buying amounts just enough to enable the farmers to repay their loans and the rest is sent back and at the end of the day the farmers have nothing to take home,” he said.
Meanwhile, the president of the Farmers’ Union of Malawi (FUM) Alfred Kapichira Banda blamed the Tobacco Control Commission for not playing its role in educating farmers on the IPS.
“The problems with IPS is that companies do not sit down with the farmers to tell them what the system is all about,” he said.
“They just push it to farmers during the times when they are desperate and are looking for farm inputs like seed and fertilizer.
“Farmers do not even negotiate how much it is per ha and the interest. They do not even know if they will repay the loan in dollars or kwacha, but, when they see the deductions, that is when they realize that they got themselves into something bad.”
Banda said that in order to safeguard the interest of the farmers – to help bail them out of their current misery – on the market there was a need to revert to the structures of the past. The old structures should be reset where it was only the government, through the Ministry of Agriculture and Trade and the Tobacco Control Commission, that was in charge of the markets.