Auction Holdings accuses tobacco buyers of sabotage

Auction Holdings Limited (AHL) Group says it has noted elements of sabotage from tobacco buyers who deliberately want to frustrate farmers who are selling their tobacco on auction in order to promote the Integrated Production System (IPS).

Kapichira- Banda: Accuses TCC
Kapichira- Banda: Accuses TCC

The use of IPS, whereby tobacco farmers produce and sell their tobacco on contract basis, has divided opinion on its use in the country with some sectors calling for a review of the system saying farmers are not benefiting enough from it.

AHL Group Receiving Manager Samuel Mkhutche raised the alarm when a group of journalists under the banner of Media Network on Tobacco toured the auction floors in Lilongwe Tuesday.

“If you look at the quality of the tobacco that is been rejected on the auction floors and the one which is been bought under the IPS you would really wonder, that is why we are not ruling out traces of sabotage,” said Mkhutche.

He said this might be a deliberate ploy by the buyers to impose the IPS on farmers who do not favour the system.

After 18 weeks since the market was opened, a majority of farmers selling their tobacco on auction are yet to sell even a single bale and have massively suffered from high rejection rate which at times is hitting as high as 98 percent.

Mkhutche said although the buying companies want to force the IPS on farmers, it has been proven that farmers are not reaping the expected rewards from the system as previously touted.

“What is happening is that the buyers are just buying amounts just enough to enable the farmers repay their loans and the rest is sent back and at the end of the day the farmers have nothing to take home,” he said.

In a separate interview Farmers Union of Malawi (FUM) President Alfred Kapichira Banda blamed the Tobacco Control Commission (TCC) for not playing its role in sensitizing farmers on what IPS is all about.

“The problem with IPS is that companies buying tobacco do not sit down with the farmers to tell them what the system is all about.

“They just push it to farmers during the times when they are desperate and are looking for farm inputs like seed and fertiliser,” said Banda.

He added: “Farmers do not even negotiate how much it is per hectare and the interest. They do not even know if they will repay the loan in dollars or kwacha but when they see the deductions that is when they realise that they got themselves into something bad.”

The FUM President said in order to safeguard the interest of the farmers on the market there is need to revert to the structures of the past to help bail them out of their current misery.

“We need to go back to how things were, let us establish who the owners of the markets are, the one controlling the markets and who is setting down policy guidelines.

“We should reset to the old structures where it was only the government through ministries of Agriculture and Trade and TCC who were in charge of the markets,” he said.

Limbe Leaf Tobacco and Alliance One are some of the companies who are buying tobacco from contract farmers.

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