Minister: Tobacco Will Remain Cash Crop
Tobacco will remain Malawi’s cash crop for the foreseeable future, according to Minister of Agriculture Lobin Lowe. Speaking after touring Japan Tobacco International Leaf Malawi Factory, Lowe urged farmers continue their commitment to the crop, according to Malawi24.
Citing JTI’s recent $1 million investment in maintaining its Malawi factory, Low said it is pleasing that companies consider Malawi as a leading processing country. The investment, he said, is evidence that tobacco has a bright future in Malawi.
“If we talk of other crops, we are talking of complementing tobacco and not getting away from tobacco. This alone shows that we are still relying on tobacco in the short, medium and long term,” said Lowe.
As global demand for cigarettes has stagnated, Malawi growers have increasingly been eying alternative crops. In May, Malawi’s president, Lazarus Chakwera, urged a switch to high-growth crops like cannabis, stating that tobacco, the country’s leading foreign exchange earner, was in terminal decline.
While expressing confidence in tobacco, Lowe lamented farmers’ low earnings. Growers, he said, retain little money after repaying the inputs they got from tobacco companies. He also complained that the ministry did not get enough forex from tobacco sales.
Low urged discussions between buyers, processors and the regulator to make sure that farmers are attracted to tobacco.
JTI Managing Director John Gauna called on government to remove non-value costs in order to make Malawi’s processing facilities financially appealing.
Gauna said that a number of tobacco processing factories have closed in the neighboring countries, and this has created an opportunity for Malawi to position itself as a competitive alternative.
But taxes and levies in commodity processing are making Malawi unattractive, according to Gauna.
“We boast capacity to process up to 240 million kilograms of tobacco leaf here in Malawi. But at the moment we aren’t achieving anywhere near this,” said Gauna.
The JTI factory can process up to 50 million kg of leaf but is currently processing around 40 million kg, up from 28 million last year.