Malawi Kwacha fragile stability irks farmers

Farmers Union of Malawi (FUM) on Tuesday expressed disappointment over the timing of the appreciation and pace of the local currency, Kwacha, against major international currencies.

The local unit is now trading at K692 against one US$.

FUM President, Alfred Kapichira Banda told journalists in Lilongwe that the recent marketing developments particularly on exchange rate are a scaring to livelihoods of farmers.

“While the appreciation has excited other segments of the society, mostly importers, on one hand, the same is nuisance and of course a perceived sabotage to farmers who bought their farm inputs at more depreciated Kwacha rate than now,” he said.

Kapichira-Banda observed that it is a tradition in the country to see a local unit gaining value when markets for Malawi’s major crops such as tobacco are opening which in essence displeases and sabotages farmers.

“The current pace and timing of the appreciation is shocking and compels one to suspect that there is an invisible hand behind the current movement of the Kwacha,” he said.

But the Reserve Bank of Malawi (RBM) through a statement has assured farmers that the current exchange rate system was the best and makes them competitive on the international market.

On pricing of some crops particularly tobacco, he said, it is high time government involve farmers when coming up with minimum prices for the product.

He said there should be a negotiation table on the minimum prices of tobacco between government and the farmers representatives before it meets the tobacco buyers because the union believes that if a farmer is given opportunity to set the prices, there can be a win-win situation, no complaints from farmers and also disagreements at the market with buyers could be solved.

Malawi economy depends on agriculture with tobacco as its major exchange earner.