Malawi: Tobacco Processors Reaffirm Support for the Integrated Production System (IPS)

Source from:  The Maravi Post 12/10/2015

The Tobacco Processors Association (TPA), a body of local buying and processing tobacco companies comprising of Alliance One Tobacco (Malawi) Limited, Limbe Leaf Tobacco Company Limited, Japan Tobacco International Leaf Malawi Limited and Premium Tama Tobacco Limited, would like to confirm its support for tobacco production in Malawi, reaffirm its backing for IPS growers and to proactively provide clear information on IPSso as to assist relevant parties and the public in understanding the system.

Each TPA member operates independently in the Malawi market and addresses non-competitive industry issues under the TPA.

Why IPS?

Tobacco grown under the IPS system provides our customers with the required audited proof that it is grown in a sustainable, compliant manner. It is a demand driven system with over 50% of our customer base requiring this for their purchases.

In order for Malawi to remain sustainable and competitive it is essential that we provide our customers the assurance that tobacco purchased from Malawi, is grown and processed in line with required acceptable standards of the countries where the Malawi Customers sell their products.

The IPS system allows buyer and grower to work together from seed to market to produce a sustainable, traceable and compliant crop to meet the demands of the international market. All major tobacco producing countries have adopted a form of IPS (Brazil, Mozambiqueand Zimbabwe).

The system also offers Malawi the opportunity for the much-needed crop diversification the country seeks to achieve, by providing for integrated production of tobacco with food crops, forestation, irrigation farming and best practice in labor and environment.

Since its adoption in 2012, more growers are voluntarily opting for contract arrangements as opposed to auction. The interest therefore assures us that IPS has support from Growers. Statistics from the Tobacco Control Commission (TCC) indicate that the number of IPS registered farmers are increasing - from 69% in 2013 to 74% in 2014 and 82% in 2015.

IPS Regulations

In response to international Customer requirements, IPS received government approval in 2012 allowing the buyer to contract with the grower to buy an agreed volume of tobacco at a price not less than Government Minimum Prices (GMP). The industry therefore operates under the government approved IPS regulations (Government Notice No 14 of 17th January, 2014) which also provides for minimum terms of IPS contracts.

Benefits of the Integrated Production System (IPS)

Since the advent of the IPS system there has been improvement in a number of areas in the tobacco value chain:

·Improved yield per hectare creating land space for other cash crops and forestry.

·Improved yield accompanied by improved quality.

·Food security at household level. Growers under the funded contracts can be provided with maize and legume seeds for crop rotation thereby promoting food security at household level as well as additional income from surplus.

·Improved market efficiencies due to a committed Buyer and grower.

·Less rejections attributable to non-conformity with both buyer and grower having the option to negotiate on quality variance.

·Awareness of the market requirements - Government and Growers are better placed to tailor production accordingly for the benefit of all stakeholders.

·Improved awareness and implementation of Agriculture Labour Practices. There is more awareness on child labour and labour related issues in general.

·Improved Environment due to crop rotation, use of certified chemicals and general good agricultural practices. Increased forestry operations alongside tobacco production.

·Increased Grower Support Programs in tobacco production areas

·Creating the foundation and environment for Growers to establish themselves as agro-business people.

·Higher return to the grower

A Positive and Sustainable Industry

IPS offers sustainability for Malawi's tobacco industry. All stakeholders need to work together to develop 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. Enditem