Report reveals falling prices in IPS

Post was last updated: November 26, 2019

A report by a consultant hired to review the effectiveness of the Intergrated Production System (IPS) in tobacco has revealed that while the system helped pamper prices in the initial stages, prices have started declining in recent years.

Malawi adopted the IPS in 2012 as one way of ensuring sustainable production of the green gold.

Currently, about 80 percent of the country’s tobacco is produced and sold on contract while the remaining 20 percent is sold under the auction system.

Addressing delegates during last week’s Tobacco Industry Conference, Tobacco Commission (TC) Board Chairperson, Inkosi ya makosi M’mbelwa V said there was need for a study to look at reason behind the weak prices in IPS.

“While IPS has managed to improve prices, there has been general price decline over the period. Such development calls for further research to contributing factors,” M’mbelwa said.

He added that the study revealed that Malawi should continue with IPS as there are limited options.

On a positive note, M’mbelwa said IPS has achieved most of its objectives by improving leaf quality and farmers access to inputs.

“IPS has enhanced compliance in the production of tobacco in the country,” M’mbelwa said.

He urged stakeholders in the tobacco industry to formulate interventions to address various challenges in IPS.

He further noted that the tobacco industry in the last marketing season has contributed K400 million to Treasury in form of forestry levy.

M’mbelwa said industry would like to see management of the fund to be handled by the industry stakeholders.

“It is the expectation of the industry to see this contribution translate into forestry coverage. However, the industry has noted that government is yet to demonstrate this translation,” he said.

Agriculture Minister, Kondwani Nankhumwa, said his ministry would liaise with the concerned parties in government to explore best ways of utilising the levy.

Nankhumwa said his ministry appreciates the efforts by various agents in making sure that tobacco remains sustainable through forestation drive.

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