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Trouble in cane fields

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The establishment of Salima Sugar Company has shaken the foundations of smallholder cane grower associations in Dwangwa who are now grappling with revolt from their members.

The farmers are dumping their associations accusing them of ripping them off.

They now see the coming of the Salima sugar factory as an act of their redemption from exploitative practices they have been suffering at the hands of their associations.

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The farmers were contracted to the associations to produce cane which is supplied to sugar giant, Illovo Sugar Company, until now the sole sugar producer in Malawi.

But the rebellion has left the associations saddled with bank loans which they obtained on behalf of the cane growers and, therefore, battling for their survival.

Desperate to stem the tide against them, some of the associations have obtained court injunctions to restrain their members from abandoning them.

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However, the cane growers are refusing to be stopped to an extent that they are forming alternative associations.

The conflict has turned physical in some instances such that two people were hacked on the arm and foot in the commotion that ensued at one of the associations, Nkangazinja, as some tried to prevent the rebellious cane growers from cutting their cane for sale to their new-found Salima-based buyer.

Through these associations, the farmers have been getting inputs such as fertilisers, herbicides and seeds –often through bank loans guaranteed by the associations.

The associations are the ones that have been selling the cane to Illovo on behalf of the growers.

However, the Salima Sugar Company, one of the investments in the government’s Green Belt Initiative (GBI), has since trumped this middleman arrangement by allowing individual farmers to sell to and deal directly with the company.

The growers Malawi News has spoken with say this has enabled them to understand the transactions better as they are eyewitness of the process from weighing of the cane to calculations on their earnings –unlike in the case with the associations which they say kept details of the transactions to themselves.

Chairperson of Nkangazinja Cane Growers Association, Umandi Bashir, said almost 68 farmers have pulled out thus far before settling millions of money they owe the group.

“We obtain loans from banks to provide the farmers with inputs like fertilisers, herbicides, seed canes, transportation and meet other costs of production on the agreement that the money will be deducted from the sales of their sugarcane. But the farmers have just left us with huge loans at the bank,” said Bashir.

He accused Salima Sugar Company of turning the heads of the growers and for stealing the association’s sugarcane.

“The company was supposed to approach us formally so we could discuss the matter. But they just went direct to the farmers and started harvesting the sugarcane without our knowledge and blessings. That is stealing,” he said.

Bashir said the farmers were on a five-year contract and are aware that the inputs they used in their fields were purchased using bank loans.

“Now most of them have already sold their sugarcane to Salima [Sugar Company] and I don’t know how we are going to claim our money from them,” said Bashir, whose association has taken the matter to court.

But even with a court injunction, the growers seem to have made up their mind.

One of association’s rebellious growers, Harrison Kalundi, who is also leading the break-away farmers, said they were ready to repay the loans but officials from the association have failed to produce the amount of money the farmers owe it.

“Yes, we owe them money for the inputs but when officials from Salima Sugar Company wrote them to give a breakdown of how much each of us owes them, they did not provide it. So how can we settle loans whose amount we don’t know?” said Kalundi who is also village headman Zunga.

He admitted they were on a five-year contract with Nkangazinja but said they were being forced to remain in the association because they had no alternative market.

“Our presence [in the association] was not of our will but because we had nowhere else to go. Imagine we signed contract agreements without being given a copy. Most of us were not happy but we could not express our concerns because of fear; so an opportunity has presented itself for us,” said Kalundi.

He said the associations have been secretive on transactions relating to inputs and other costs, only for them to surprise the farmers with sales statements that carry strange deductions.

He also dismissed arguments from the aggrieved associations that it did not make business sense for the farmers to transport their cane over a distance of over 200km to Salima when they can sell it next door.

“We are not insane. We know what that distance means to business. But the associations should ask themselves why we would dump them and take all that risk. The matter is simple: we are making much better money now. Those associations have been stealing from us.

“We cannot blame Illovo for all our suffering because we haven’t been dealing with Illovo directly but with the associations. Officials in those associations have become rich on our sweat. Now Salima Sugar Company is offering us an escape route,” he said.

Dwangwa Cane Growers Limited (DCGL) is another of those that have obtained an injunction restraining its member growers from leaving.

General Manager for DCGL, Amos Banda, refused to comment when contacted last week, saying the matter was in court.

But the farmers that have walked away from DCGL have also defied the court order and formed their own association.

Chairperson of the new association, Steve Lungu, said they were surprised with the company’s decision to obtain an injunction when it has not been paying them their money on time.

“We don’t owe them any money. It’s them who owe us money [from 2014/15 sales season]. That is why we decided to be selling our cane to Salima Sugar Company,” Lungu said.

We can report that the five-year contract between DCGL and the farmers expired last year and no new contract is in place yet.

DCGL, the main out grower association, has been tussling with its farmers over unsatisfactory sales proceeds and exorbitant charges for inputs and haulage, among others.

They farmers also say DCGL has been deducting 20 percent management fee from gross earnings of each farmer; an amount which they say is way too high.

Other affected associations include Tipate, Lake Shore, Green Leaf and Kazirira.

Last week, the High Court in Mzuzu threw out an injunction which Kazirira association obtained against its growers, effectively clearing them to sell their cane elsewhere.

When contacted, Salima Sugar Company reserved its comment.

Government has 40 percent stake in the company with the remaining 60 percent shareholding being held by two other investors.

President Peter Mutharika commissioned the Salima Sugar Company factory last week, officially bringing the second sugar producer on the Malawi market.

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