The Malawi Parliament on Monday passed the Tobacco Industry Bill, which, among other things, bans buyers from growing tobacco or engaging in the transport and grading of tobacco, according to a story at Malawi24.com.
The law is aimed also at strengthening tobacco associations by increasing membership from 3,000 to 5,000.
Speaking after the bill was passed, the Minister of Agriculture Joseph Mwanamvekha said the new law meant farmers would no longer be ripped off by buyers. It would introduce sanity to the tobacco industry.
“In the past, the farmer was ripped off,” he said. “The farmer signed the contract without knowing the prices he would be offered.”
The minister claimed also that the law would help reduce poverty because farmers would earn more.
However, last week, the Member of Parliament for Karonga North, Frank Mwenefumbo, opposed the bill saying it would benefit only companies.
Mwenefumbo, who is a member of the Alliance for Democracy (AFORD) party, said people in his constituency were against the bill because farmers were aware that it would favor the tobacco companies rather than the farmers.
“Let us put our farmers first and the rest should come second; farmers are the ones who put much effort and money in tobacco business but what do they gain at the end of the day: peanuts, which is not fair to our farmers,” he said.
“These companies are making a lot of profits from our farmers’ sweat; farmers should therefore have all the powers and the companies should surrender their licenses to our farmers; otherwise, this bill is no of use.”
Category: Leaf
Growers "ripped off"
Azerbaijan gears up
The Azerbaijan tobacco-products manufacturer Tabaterra has built a factory in the Sumgayit Chemical Industrial Park about 30 km from the capital, Baku, according to an AzerNews story that updates slightly one published by the same outlet in October.
The country is aiming to minimize the import of tobacco products.
The director of Tabaterra, Elman Javanshir, reportedly told the head of state that the $48-million factory would produce international-standard cigarettes using British, German and Italian technologies.
The factory, he added, would have an annual production capacity of 11 billion filter cigarettes in three formats, and would meet 80 percent of the country`s demand for tobacco products.
The story said that Azerbaijan’s annual cigarette consumption currently stood at more than 10 billion, of which 1.6 billion were produced domestically and nine billion were imported.
The project is expected to create 200 jobs.
Last year, the Azerbaijani President Ilham Aliyev signed a decree approving the State Program for the Development of Tobacco Growing in Azerbaijan for 2017-202.
According to the decree, the State Program is aimed at the development of tobacco growing, improving tobacco processing, increasing profitability and export potential, and increasing employment in rural areas.Protecting growers
Debate on a report on Malawi’s Tobacco Industry Bill by a joint parliamentary committee has been deferred by the leader of the House, Kondwani Nankhumwa, according to a story in The Maravi Post.
The bill, which was tabled in June this year before being referred to the joint committee, seeks to consolidate the Tobacco Act and the Control of Tobacco Auction Floors Act into one law.
It also seeks to introduce regulations specifically designed to cover contract farming, whereas previously only the auction system was recognized in law.
Presenting the report to the House, committee chairperson Joseph Chidanti Malunga said the bill would regulate contract farming and fill the gap in the legislation.
He said the committee had taken into consideration the fact that contract farming would drive auction marketing to extinction.
“The joint committee was of the view that the bill should not provide for any quota,” he said. “The markets should be left open and the market dynamics should prevail and determine volumes of tobacco to be produced and sold under either system.”
The Post report said that, under the contract farming system, growers suffered a lot of deductions, many of which they become aware of only ‘when the tobacco was being sold by the buyer’.
The committee was said to have received submissions that contract farming should be eliminated because it had proved to be less profitable for growers than the auction system, even though contract tobacco was sold for a higher price than was auction tobacco.
“The committee considered the submission and formed the view that the funded contract system should be retained because not all farmers can afford to produce tobacco with their own resources,” said Malunga. “If it is abolished, growers will be forced to get loans from commercial banks who charge exorbitant interest rates.”
However, the committee has recommended additional provisions aimed at protecting growers operating under contract farming from deductions not properly spelt out and other financial burdens.Santa Fe supports growers
Santa Fe Natural Tobacco Company (SFNTC) has donated $100,000 to the Carolina Farm Stewardship Association (CFSA) for the creation of the Hurricane Relief Partnership for Carolina Sustainable Farms.
SFNTC is a subsidiary of Reynolds American, which is an indirect, wholly owned subsidiary of British American Tobacco.
SFNTC, a member of the non-profit CFSA, said that the new hurricane relief partnership had two key purposes:- To provide access to low-cost capital and financial planning to between 30 and 50 small sustainable farms in North and South Carolina that suffered damage due to the impact of Hurricanes Florence and Michael; and
- To create an endowment fund to guarantee availability of low-cost financing for small sustainable Carolina farms in the event of future catastrophic weather events.
“The Hurricane Relief Partnership for Carolina Sustainable Farms marks the beginning of a new strategy in building the financial resilience of our region’s sustainable agriculture community,” said Roland McReynolds, CFSA’s executive director.
“The probability of disasters in future years presents a long-term threat to the survival of sustainable family farms serving the markets for local and organic agricultural products in this region.
“These farms, some of which are SFNTC’s grower partners, are not reliably served by the safety net that exists for large-scale conventional commodity production. Yet the contributions they make to their communities — enhanced soil and water quality, biodiversity, healthy food, economic growth — are vital, and when one of these farms is lost, it has long-lasting negative effects.”
According to a press note on the Reynolds American website, CFSA will work with the Natural Capital Investment Fund (NCIFund) to leverage SFNTC’s donation to create up to $250,000 in low-cost microloans for small, sustainable farms in North and South Carolina affected by the hurricanes.
‘CFSA will also partner with the Rural Advancement Foundation International-USA to support its work to assist farmers in accessing state and federal disaster relief programs, and to provide financial counselling to farmers receiving NCIFund loans under the Hurricane Relief Partnership program,’ the note said.
McReynolds added that CFSA would use funds that were not expended as part of the 2018-19 NCIFund loan guarantee agreement as a guarantee pool for weather-related farm losses beyond 2019.
The association would solicit also other contributions to this endowment, with a goal of building a larger guarantee fund to support greater availability of low-cost, low-underwriting microloans for this population of small, sustainable farms in future years.Small US Burley crop
The 2018 Burley crop looks like being the smallest such crop produced since records were first kept, according to the latest issue of Christopher Bickers’ Tobacco Farm Newsletter.
Bickers quotes the COO of the Burley Stabilization Corporation, Daniel Green, as saying that the crop just coming onto the market had been projected at 90 million pounds.
And while the numbers might end up a little higher than 90 million pounds by the end of the delivery season, Green had said that they would not total more than 100 million pounds, which would be the smallest Burley crop since records have been kept.
Bickers said that part of the shortfall had resulted from substantial cutbacks in plantings in the spring, which had amounted to 20 percent according to the US Department of Agriculture.
But he added that losses caused by late-season rains were the big factor. Some fields had been drowned.No answer to poisoning
The EU Commission has said that the issue of improving health and agricultural safety in Zimbabwe features in regular policy dialogues with the Government.
The Commission was responding to questions from an Italian member of the EU Parliament, who had asked the Commission what steps it was taking to reduce the risk of tobacco poisoning among tobacco farmers and their families.
In a preamble to her questions, Barbara Matera said that when the proper safety procedures were not adhered to, the risk of tobacco poisoning among farmers was high.
‘Zimbabwe, in particular, has experienced a large number of tobacco poisoning cases, which can be attributed to a lack of education about the condition and a lack of funding for the proper preventive equipment,’ she said.
‘This sickness also greatly affects children who help out with the harvest in rural areas.’
Matera said tobacco was Zimbabwe’s largest export product, and its largest agri-food export to the EU, before asking:
‘What is the Commission doing to promote education among tobacco exporters?’
‘What can the Commission do to provide adequate equipment and protection for farmers, especially those with children?’
In its written reply, the Commission said the 11th European Development Fund National Indicative Programme (€234 million), envisaged support for health, agriculture-based economic growth and governance in Zimbabwe.
‘The Commission does not provide support to the production of tobacco in Zimbabwe,’ it said. ‘However, agriculture being the backbone of Zimbabwe’s economy, the Commission provides substantial support to agricultural resilience and production and supports value-chains for products such as beef, chicken or dairy aiming at creating jobs.
‘The Commission is also one of the main contributors to the Health Development Fund managed by the United Nations Children’s Fund. This Fund aims at guaranteeing that the population can access comprehensive and effective health services and at strengthening health systems to improve the level of care.
‘The issue of improving health and agricultural safety also features in the regular policy dialogue with the Government.
‘Zimbabwe is a Party to the World Health Organization Framework Convention on Tobacco Control. Article 17 recognises the need to promote economically viable alternatives to tobacco production to prevent adverse impacts on populations whose livelihoods depend on it. Article 18 covers the protection of the environment and the health of persons in respect of tobacco cultivation and manufacture. Zimbabwe has benefited from sharing of experience and provision of technical assistance for the implementation of these articles.’Tax plans challenged
A group made up of more than 50,000 tobacco growers in the Philippines has urged the government to reconsider its plan to increase again the excise tax rate on cigarettes, according to a story in The Manila Standard.
The group said the move would further harm the leaf-production industry.
The PhilTobacco Growers Association said in a letter to Finance Secretary Carlos Dominguez III that they were already feeling the adverse impact of the lower demand for tobacco caused by higher excise taxes on tobacco products.
The letter was sent also to the Senate Ways and Means Committee chairman Senator Juan Edgardo Angara, and House Ways and Means Committee chairman Rep. Estrellita Suansing.
The growers said that from P2.72 per pack in 2012 for cheaper cigarettes, the excise tax had now reached P35.00 per pack.
And the latest data from the National Tobacco Administration had shown that tobacco production had declined from 68 million kg in 2013 to 48 million kg in 2017.
The growers said they had been surprised that on top of the tobacco-tax increase of 2013, another had been imposed in 2017. “And now the government is again planning to increase the tax on cigarettes,” they said.
The growers said the proposal by Senator JV Ejercito to set tobacco excise tax at P90 per pack with a nine-percent increase annually would more than double the current tax.
The Department of Health and other sectors are pushing for the increase in excise tax of cigarettes to P90 per pack to fund the Universal Health Care bill.
But the growers said the tobacco industry already contributed billions of pesos yearly to government coffers, citing the Bureau of Internal Revenue’s figures for tobacco tax collections in 2017 that reached over P126 billion.
“Because of that, isn’t it right that we should be given the opportunity to recover?, the farmers asked.
“Isn’t it right that other sectors should also be encouraged to pay higher taxes for them to contribute to economic development?”.More growers registered
Tobacco grower registrations in Zimbabwe for the 2018-19 season have increased by 65 percent to 162,028 from those of the previous season, 98,233, according to a story in The Herald citing figures from the Tobacco Industry and Marketing Board.
Of the 2018-19 registered growers, 34,845 registered for the first time, which seems to indicate that 28,950 have returned to tobacco.
However, the increase in registrations has largely been influenced by the need for growers to obtain individual numbers so that they benefit from the introduction of foreign currency incentives.
Changes to the way that payments are made to growers have made it difficult for the them to share money after selling their crops because they are no longer paid cash. The money is now being deposited in bank accounts or paid through EcoCash.
Tobacco production has been on the increase during the past due to an organized market and the recent introduction of an input scheme by the government.Universal results improved
Universal Corporation’s results were improved due to strong sales volumes, in part because of higher carryover sales and higher African Burley production volumes, said chairman, president, and CEO George C. Freeman III in announcing yesterday the company’s half-year results to the end of September.
“We have completed a significant portion of our crop purchases for the fiscal year,” Freeman was quoted as saying. “Burley production volumes are up in Africa, and crops outside of the United States are coming in as expected.
“Hurricane Florence caused significant damage to the United States’ flue-cured tobacco crop during the second fiscal quarter. The most severely hit area was eastern North Carolina where we estimate up to half of the crop was still in the fields and most of that remaining crop was destroyed.
“However, our farmer base is largely located outside of what was the storm’s direct path, which should mitigate the impact on our results in the second half of the fiscal year.
“Despite the recent supply disruptions in the United States, we believe that we are on track for a strong year with volumes above those of last year. Customer demand has exceeded our expectations in certain origins, and we believe some customers are capitalizing on attractive buying opportunities that we have been able to offer due to our strong market position and efficient operations.
“Our uncommitted inventories remain within our target range at levels lower than those of the previous fiscal year at this time.”
Freeman went on to say that Universal was exploring opportunities to expand its services in its core tobacco business, while exploring also growth opportunities outside that business, leveraging its strengths and expertise.
Universal reported net income for the first half of fiscal year 2019 of $44.6 million, or $1.76 per diluted share, which was increased from $29.7 million, or $1.16 per diluted share during the same period of the previous fiscal year. The first half of fiscal year 2019 was said to have included non-recurring tax benefits that reduced income taxes and increased net income by $7.8 million, or $0.30 per diluted share.
Operating income of $62.7 million for the six months to the end of September 30 was said to have been increased by $11.6 million or 23 percent on that of the six months to the end of September 30, 2017, $51.2 million.ILO funding move welcomed
The International Labour Organization (ILO) no longer relies on funding from tobacco companies and affiliated organisations, for the time being, according to a note posted on the website of the Framework Convention Alliance (FCA).
‘In its Decision concerning contracts that had tied the ILO to an industry whose products kill more than seven million people each year, the Governing Body of the ILO adopted an integrated strategy to address decent work deficits in the tobacco sector,’ the note said.
‘The Governing Body has directed the ILO director general “to continue efforts to mobilize various sustainable sources of funding from the public and private sector with appropriate safeguards”.’
The FCA said it was confident the ILO would apply appropriate safeguards to its future fund-raising efforts to ensure that it no longer accepted funding from the tobacco industry.
‘The FCA also commends the ILO for its continued dedication to protecting the rights of workers within the tobacco sector and for the commitment it has shown in thoroughly addressing the issue of funding from tobacco companies.
‘The ILO’s contracts with the Eliminating Child Labor in Tobacco Growing (ECLT) Foundation and with Japan Tobacco International (JTI) expire in June and December 2018, respectively.
‘Rejecting funding from tobacco companies will allow the ILO to maintain its impartiality and enhance its capacity to address the issues that trap workers in systemic poverty including unfair contracts, collusion by companies over leaf prices, and inflation of the costs of farm inputs.
‘Other UN agencies should take note. The ILO has set an important precedent by taking the issue of tobacco industry funding seriously and addressing it institutionally. It has positioned itself to go further in addressing the root causes of systemic poverty in the tobacco sector, free from the undue influence of tobacco companies, consistent with Article 5.3 of the World Health Organization’s Framework Convention on Tobacco Control (WHO FCTC) and the Model Policy for agencies of the United Nations system on preventing tobacco industry interference.
‘The Governing Body has also directed the ILO director general to organise a tripartite meeting as a matter of urgency, to further develop and implement the integrated strategy. This upcoming tripartite meeting presents an opportunity to expand protections for workers within the tobacco sector and completely shut the door on any undue tobacco industry influence.’
