Tobacco Stakeholders Want Prices Enforced

Source from:  by Zainah Liwanda, 16 November 2006 - 06:55:17  11/20/2006

Stakeholders in the tobacco industry on Wednesday complained that despite President Bingu wa Mutharika setting minimum prices for tobacco in the just ended season, there was no enforcement mechanism to ensure that buyers comply. At the opening of the tobacco selling season in March, Mutharika set minimum prices for tobacco to protect local farmers from exploitation. A representative of the Tobacco Control Commission (TCC) Fred Kamvazina told the Agriculture and Natural Resources Committee of Parliament yesterday that his organisation tried to implement the prices but had no enforcement mechanism. Chair of the committee, Vitus Dzoole Mwale, had earlier asked the stakeholders to explain why tobacco prices were low compared to last year and why the review of the Tobacco Act is taking long, among other issues. Kamvazina said the challenge they faced in implementing the reserve prices was the absence of the implementation mechanism. "In the absence of that (implementation mechanism), to achieve whatever is said is difficult," he said. Auction Holdings Limited (AHL) executive director Evance Chipala told the committee that setting minimum prices for the commodity is a good development but that there was need for government to put in place mechanisms of clearing the tobacco that has not been bought. According to Chipala, by doing so, buyers would be forced to change their stance on the prices they offer. "If buyers cannot help the farmers, then government has the responsibility to help," he said. Chipala said other countries have pool tobacco, where government buys tobacco from farmers and keeps it in processed or raw form for future sale, especially when emergency orders come up. Apart from subsidising production only, Chipala said government should also consider subsidising marketing. On his part, deputy executive secretary of the Tobacco Association of Malawi (Tama) Christopher Beya said there is need to change the marketing policy and attract other buyers to encourage competition in the industry as the current number of buyers is not conducive to a competitive market. The committee, however, quizzed the stakeholders on whether they advised government on mechanisms to implement set prices, their stance on contract farming by buyers like Alliance One and the reasons buyers gave for ignoring the President's directive on the prices. When it was time to respond to the queries, the stakeholders asked chairperson of the committee, Vitus Dzoole Mwale to send the media out of the meeting. They argued that the information they wanted to divulge was classified. Enditem