Civil Society Agriculture Network (Cisanet) has recommended that the government must temporarily suspend integrated production system (IPS) and 100 percent turn to auction system in tobacco value chain, accusing the tobacco buying companies of using IPS to abuse growers.
IPS is a form of contract farming in which smallholder farmers enter into agreements with tobacco buying companies to provide all necessary support required during production, in form of inputs on credit.
As part of their obligation, the farmers sell their leaf exclusively to the company they entered into contract with.
According to Cisanet National Director Tamani Nkhono-Mvula, the suspension should stay until that time the current regulation framework for the system, which was supposed to be used in the interim, is reviewed.
He said although IPS remains a better way of selling tobacco, the current framework gives more marketing controlling powers to the buyers while reducing farmers to mere tenants.
Nkhono-Mvula told Parliamentary Committee on Agriculture and Irrigation on Wednesday that most farmers are being forced to sign contracts which they do not understand due to language problems and lack of proper communication from the buyers.
He also raised fears that if IPS continues to be administered in its current form, the tobacco buying companies will completely take over the control of tobacco market value chain as they currently seem to have powers in determining who produces tobacco in the country.
Nkhono-Mvula said to achieve their interests and not of the farmers, the buyers are now opting to deal with individual farmers not associations as has been the case in the past.
“In the first two years the system was very promising and the system farmers were happy. But the way things are now, most of farmers now think that was the case to lure farmers into IPS. Farmers do not know some of the terms in the contracts. Farmers are discouraged from using own inputs and their tobacco is being rejected. Farmers feel there are some third parties that are involved and are benefiting from their contracts with the buyers.
“Based on the results of the study that we conducted in three tobacco-growing districts, we therefore, recommend that the IPS be temporarily suspended in its entirety to review issues raised. Upon satisfactory revision of these issues and coming up with a stronger legal framework, the IPS stands out as an excellent way of ensuring the development of the tobacco industry in Malawi,” NkhonoMvula said.
Deputy Chairperson for the committee, James Munthali said the system came to address global issues in the production of tobacco such as the use of child labour and it is surprising that the buyers are now trying to take advantage of that to abuse farmers.
Munthali, who was the minister of Agriculture when the current IPS regulation framework was adopted and entered into force in 2012, said the initial plan was to use the framework in the interim and it really needs review. “We will take your recommendation and see how we can move from here,” Munthali said.
In his separate meeting with the committee, Tobacco Control Commission (TCC) Chief Executive Officer, Albert Changaya, admitted that the system is facing a number of challenges but the commission is taking some steps to address such challenges.
Changaya mentioned the development of monitoring and evaluation framework, development of standard contract, regulating new initiatives by IPS implementing institutions and regulating the marketing and offloading of tobacco.
“There is quite a lot that needs to be done for the system to effectively deliver. We need to improve communication between the buyer and the grower to deal with the misunderstandings that are there,” Changaya said.
It is estimated that 80 percent of tobacco in Malawi is sold under IPS.
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