President Dr. Joyce Banda has expressed optimism that 2013 will be the year when farmers will earn decent incomes from their labour and that indeed the Malawi economy is on the road to recovery.
The agriculture sector, one of the five priority sectors of ERP, prioritizes tobacco as one of the pillar cash crops besides legumes, cotton, rice, cassava and livestock.
“It is pleasing to note that during the 2012 marketing season, good prices were offered to farmers for their tobacco. For the first time in many years, we saw tobacco prices gradually increase from an average of US$1.04 per kg at the start of the season to US$2.20 per kg towards the end of the season.
“This is what my Government desires. The grower must have a fair return for his investment and not to be exploited by any player in the industry. It is my sincere hope and belief that this trend will continue this marketing season,” said President Dr. Banda when she presided over the official opening of the 2013 tobacco marketing season at Kanengo Auction Floors, Lilongwe on Monday, March 11, 2013.
“This year’s tobacco growing season has been different from the previous ones in many different ways as it is pleasing to note that the reforms my Government introduced in the tobacco sector are bearing fruit,” said the President, explaining that the crop is of good quality and in large quantities, almost double what was available last season.
She said there is a projected volume of 156 million kilogrammes compared to 79 million kilogrammes in 2012 with a projected value of at least US$300 million compared to US$177 million last year.
“There has been continuous dialogue between myself, my Government and all stakeholders in the tobacco industry resulting into a broader ownership of the reforms.
“The tobacco industry has become a case study in my Government’s drive for diversification and commercialization. The sector has a complete structure with a well organized industry in the whole value chain from farmer to market and provides ability to trace foreign exchange earnings.
“My Government, therefore, plans to adapt this system to other cash crops like cotton, legumes, rice, tubers and livestock,” said Dr. Banda.
She noted that apart from contributing greatly to the country’s foreign exchange earnings, tobacco is also important in the socio-economic well-being of the majority of our people.
“My Government is therefore promoting tobacco production and marketing as a crop of strategic importance so that our farmers in the rural areas earn decent incomes and as a nation we can enhance our foreign exchange earnings in the short term,” she said.
She explained that as a way of developing the sector, she has personally ensured the introduction of the Integrated Production System (IPS); and harmony with tobacco buyers through contact and dialogue at various levels and by giving a reprieve to those that were deported by the former Government.
Banda also said she directed that farmers should be paid their proceeds using exchange rates from commercial banks and not as determined by Reserve Bank. She also announced that Government is reviewing the policy regime in the agriculture sector to ensure policy coherence and coordination; and aligning it with programmes on crop diversification.
Despite the reforms being undertaken, the President said she was aware that “the battle is not fully won as there are still some challenges in the sector”.
“I am concerned that flue cured tobacco production is currently reducing over the years in spite of high global demand. Malawi currently produces less than 20 million kilogrammes of flue-cured tobacco and yet there is a huge demand for it on the world market.
“My Government will therefore continue to promote the production of flue-cured tobacco as one way of responding to the current opposition to burley and to the global market demand for flue-cured tobacco.
She also said that despite the World Health Organization Framework Convention on Tobacco Control (WHO FCTC), is a serious threat to tobacco industry, Malawi will continue growing tobacco based on trade requirements until there is no demand.
“I am reliably informed that there is an increase in demand for burley tobacco worldwide, which is good for Malawi as we are the largest producer of the burley tobacco in the world. I would therefore like to appeal to you, our tobacco buyers to make sure that Malawi takes a lion’s share of the global burley tobacco market,” she said.
Other speakers at the event included Agriculture and Food Security Minister Professor Peter Mwanza, Chairman of the Tobacco Control Commission, Ambassador Gamaliel Bandawe and Chairman of Auction Holdings Limited, Dr. Jerry Jana.
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