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Malawi: Overproduction Strangles Malawi’s Tobacco Industry

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Despite being major a foreign export earner, the future of Malawi’s tobacco is uncertain, President Peter Mutharika has observed. Malawi News Agency’s MARY MAKHIRINGA and EMILY BANDA of csjnews.org write.

Mutharika said the continued dwindling prices of Malawi’s tobacco at the auction floor demands that farmers should start growing other cash crops.

“As a country we need to move away from tobacco as it is the buyers who suggest prices for the tobacco.

“Many times I have been meeting the buyers in person where they promise to provide good prices but they only do that in few days of opening the tobacco market and later go back to the lower prices,” he said.

Mutharika said this on Thursday when he met the International Fund for Agriculture (IFAD) president Kanayo Nwanze.

Mutharika said when prices of products are dictated by buyers and not producers, something is completely wrong.

“The writing is on the wall that we need to move on and start focusing on other crops such as legumes which are fetching good prices in Asia,” said Mutharika.

Malawi’s tobacco’s future uncertain

There are a number of factors that have resulted in tobacco fetching low prices.

Overproduction due to wrong policies is one of the factors responsible for poor prices of the golden leaf.

At the time there is little demand for the leaf Malawi continues to over-produce forgetting the basic economic law of demand and supply.

An attempt to bolster the prices through an initiative called Integrated Production System or IPS is failing to change the situation.

The problem of overproduction came in when the government decided to stop its strict regulation of the industry in the 1990s.

The liberalisation of Malawi’s tobacco market resulted in almost anyone else who wished to grow tobacco to do so.

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