Union: Low tobacco prices will hurt workers

17 March 2010, The Maravi Post
URL: http://www.maravipost.com/index.php?option=com_content&view=article&id=2747:union-low-tobacco-prices-will-hurt-workers&catid=47:development&Itemid=128

Lilongwe:  Farmers are unhappy with the government decision to lower minimum prices for tobacco at the Auction Floors, arguing that it will affect the returns from the tobacco at national level.

Tobacco Control Commission announced last week that prices will average $2 per kilogramme for the best grade of burley tobacco, which is fifteen American cents (15 cents) lower than that of last year.

TCC Chief Executive Officer Dr. Bruce Munthali had earlier announced that production will be down by 24 million kilogrammes for burley tobacco due to dry spells in most production districts.

John Smite, President of the Tenant Union of Malawi, said the low prices will affect the already low production and translate into a massive loss for farmers. "Just like oil, when it goes down they create a cushion fund and subsidise for it when there are losses. They should have improved last year's prices that farmers get more," he said.

Smite said the new prices will continue to see more than 200,000 tenants in the sector suffering as most farmers will use it an excuse not to pay their workers well.

The Auction Floors which starts on Monday in Lilongwe is expected to improve the current foreign exchange shortages and Government has this year also reversed last years decision which saw all the proceeds being paid to Reserve Bank of Malawi, before being remitted to farmers banks.

Malawi is expected to sale 228 million kilogrammes of tobacco whose major buyers are Alliance One and Limbe Leaf owned by Universal leaf.