JTI says it prefers contract growers

Post was last updated: December 8, 2015

JTI Malawi Leaf has admitted that it prefers buying tobacco from contracted growers because it is easier to control the quality of their leaf unlike that from the auction market.

JTI’s confession follows developments on the auction floors early this year when merchant companies openly favoured contract farmers in the buying and prices offered for tobacco.

JTI Malawi leaf managing director, Fries Vanneste, told journalists in Lilongwe on Friday that the tight market for tobacco globally calls for more emphasis on quality than ever before.

“IPS [Integrated Production System] is a direct contract with the grower through which we are able to control quality. But we can’t control quality with the auction system which is largely used by intermediate buyers. The proceeds don’t even go to the farmer,” said Vanneste.

“With the IPS, I deal directly with the farmer,” he said.

He said IPS is the best way of growing tobacco currently as it addresses the issue of traceability which, he said, is key in the trading of tobacco internationally.

“In fact, Malawi is the only country still operating the auction system. Even Malawi’s neighbours such as Mozambique and Zambia are growing tobacco on a 100 percent IPS system. And this is reflected in the quality of leaf they are producing,” said Vanneste.

Chipping in, JTI Malawi Leaf’s leaf production director, Riaan Herselman, said under IPS, JTI is able to directly support growers through input loans as well as with extension support to ensure that they follow best agricultural practices.

“We provide the growers with extension services through our leaf technicians from Bunda [Lilongwe University of Agriculture and Natural Resources] and Mwimba [Farm Institute],” said Herselman.

He said growers are thoroughly assessed before being contractedand that the company procures quality inputs such as seed and fertiliser which is loaned to the grower under the agreements.

Support towards maize farming is also provided to ensure food security among the contracted growers.
JTI buys 25 million kilogrammes of burley tobacco out of an average 150 million kilogrammes of the leaf produced by Malawi.

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