No anti-tobacco campaign
As Malawi’s tobacco revenue started to drop, it was worrying not only to farmers but also the country, as forex continued to dwindle.
According to TCC, in 2016, revenue from tobacco dropped by 18 percent, from $337 million in the previous year to $275.7 million. This year, the crop had realized $209 million when auction floors closed in August.
According to the AHL Group, the company that owns and operates Malawi’s tobacco auction floors, tobacco sales were 192.5, 195.1 and 106.5 million kg in 2015, 2016 and 2017 respectively.
Luka said there are around 30,000 tobacco farming groups, with five to 10 farmers in each group. He said the exact figure is difficult to know because the number of farmers varies according to prices of tobacco on the market and also the size of the cultivating area. Malawi exports tobacco to 15 countries, including China.
“They should stop putting so much energy in tobacco because it has no future and try other crops like legumes,” he said.
An economics lecturer at the University of Malawi, Dr. Martin Phangaphanga said Malawi should properly implement its plans and strategies based on the planned Malawi Growth Development Strategy if it is to realize a bright future.
“The economy still faces challenges including widespread poverty and heavy dependence on primary agricultural products for its export earnings. Currently, the economy has attained some macroeconomic stability,” said Phangaphanga.
He said if Malawi can achieve and sustain low levels of inflation and grow its economy faster than the population growth to reduce the poverty levels, then it should be on a promising path.
The economist warned that the anti-smoking lobby will effectively reduce demand for tobacco. He also warned that if Malawi farmers insist on growing tobacco, which will result in saturating the market, prices will fall and they will fail to even break even.
Phangaphanga agreed with the call for crop diversification to avoid relying on tobacco whose future looks bleak.
“Diversification to other exportables and investment in forex-earning activities seems to be the obvious way out of the current vulnerability. Of course there are still over a billion smokers around the world, but this [antismoking] campaign will work gradually, perhaps over a period of time since smoking is a behavioral issue. So countries like Malawi should plan and manage their economic transition accordingly,” he said.
Principal Secretary for Malawi’s Ministry of Agriculture, Irrigation and Water Development Erica Maganga said the government is still looking at alternative crops, but it is increasingly becoming difficult She said whenever a suggestion is made on a particular crop, a negative factor arises resulting in complete abandonment.
“For example, we settled for pigeon peas as a good cash crop to replace tobacco. But prices on the international market have crumbled and farmers who grew it are complaining. So we are still searching, but we do not know how long this will take,” said Maganga.
She disclosed that some crops like coffee and macadamia have been proposed, but the government is still researching their suitability for a steady market.
Phangapanga has meanwhile advised the government not to rush to find a replacement for tobacco to avoid disappointing farmers and further denting the economy.
“The market for tobacco still exists and Malawi will continue to export in the foreseeable future. But as an economy, the country should work toward developing its industrial and manufacturing sector in order to be able to offer processed products on the international market, rather than primary agricultural products,” he said.
(Reporting from Malawi)