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Tobacco buyers for contract growing and marketing in Malawi

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Just a few days after JTI Leaf Malawi declared its preference for contract tobacco growers, other tobacco buying and processing companies under a grouping called Tobacco Processors Association (TPA) have come out in the open to announce their leaning towards contract tobacco growing and marketing in Malawi.

The companies, which include Alliance One Tobacco (Malawi) Limited, Limbe Leaf Tobacco Company Limited, JTI Leaf Malawi Limited and Premium Tama Tobacco Limited, issued a statement yesterday to reaffirm their backing for contract growers under what is called Integrated Production System (IPS).

In the statement, TPA says tobacco grown under the IPS provides their customers with the required audited proof that it is grown in a sustainable and compliant manner, saying IPS is a demand driven system that is now a requirement from 50 percent of their customers for the purchase of tobacco from Malawi.

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The grouping says for Malawi to remain sustainable and competitive on the international tobacco market, it is essential that the companies provide their customers assurances that tobacco purchased from Malawi is grown and processed in line with required acceptable standards in countries where they sell their tobacco products.

“IPS allows buyers and growers to work together from seed to market to produce a sustainable, traceable and compliant crop to meet the demands of the international market,” reads the statement, in part.

“All major tobacco producing countries such as Brazil, Mozambique and Zimbabwe have adopted a form of IPS,” it adds.

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IPS, reads the statement, also offers Malawi the opportunity for the much needed crop diversification by providing for integrated production of tobacco with food crops, forestation, irrigation farming and best practice in labor and environment.

It says that since 2012 when IPS was adopted, more growers have voluntarily opted for contract arrangements as opposed to auction.

“The interest therefore assures us that IPS has support from growers,” says TPA in the statement.

The number of IPS registered farmers, says TPA quoting figures from the Tobacco Control Commission (TCC), increased to 82 percent in 2015 from 74 percent in 2014 and 69 percent in 2013.

Under IPS, buyers are allowed to contract with the grower to buy an agreed volume of tobacco at a price not less than the Government Minimum Pr ices (GMP) and that the industry works with farmers in compliance to government stipulated IPS regulations which also provides for minimum terms of IPS contracts.

TPA says since the advent of the IPS, there has been improvement in a number of areas in the tobacco value chain which include improved yields, quality, food security and market efficiencies and that there is now less rejection of tobacco at the market attributable to non-conformity, with both buyers and growers having the option to negotiate on quality variance.

Government and growers are also better placed to tailor production accordingly for the benefit of all stakeholders.

There is more awareness on child labour and labour related issues in general while use of certified chemicals and g eneral good agricultural practices as well as reforestation programmes have improved the environment.

TPA says IPS offers sustainability for Malawi’s tobacco industry and that it is important for all stakeholders to work together in developing a constructive and objective approach to IPS and issues affecting tobacco industry in order to retain Malawi as one of the main sources of burley tobacco leaf.

“TPA encourages all those stakeholders with concerns on how the IPS is being implemented in Malawi to contact us for open, constructive and transparent dialogue while seeking for areas of improvement,” reads the statement.

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