Exploitative tobacco buyers sent packing

Malawi State President His Excellency Ngwazi Dr Bingu wa Mutharika. Taking no nosense from exploitative tobacco buyers. Pic by Malawi Digest.

By Raphael Tenthani

Four expatriates working for three large tobacco companies have been expelled from Malawi for resisting President Bingu wa Mutharika's decree on tobacco prices, a senior government official has confirmed.

"The four have been issued with deportation orders because they have been working against the government development agenda," Elvis Thodi, the Chief Immigration Officer, said Tuesday.

"Their Temporary Employment Permits have since been revoked."

The four expatriates were working for Limbe Leaf, Alliance One and Premium TAMA tobacco companies, largest tobacco buyers in the southern African country.

They include Chief Executive Officers for Limbe Leaf and Alliance One, Kelvin Stanton and Collin Armstrong respectively. The other two affected expatriates are Van de Merwe of Limbe Leaf and Alex Mackay of Premium TAMA.

All the companies have links with multinational tobacco companies like Universal Leaf of the US and Premium Tobacco Company of Brazil.

President Mutharika, who branded the tobacco merchants as "exploitative colonialists" for offering low prices for Malawi tobacco, threatened to expel any foreign tobacco buyer who ignores government set minimum prices for the leaf, Malawi chief foreign exchange earner.

The Mutharika administration decreed that the minimum price for burley tobacco should be US $2.15 per kilogramme while flue-cured tobacco should be selling at a minimum of US $3.09 per kilogramme.

But the buyers resisted the set prices, saying with the current global economic meltdown such prices were unrealistic.

Local economic experts also predicted that the price of tobacco on the market will be dictated by the demand of the crop and considering the current global economic problems the demand of Malawi’s tobacco was likely to go down.

But Mutharika shot back, arguing that buyers "want to buy our tobacco at 70 US cents while they sell the same at over US $5.

"I will not hesitate to expel anyone who exploits my people," he warned.

"These colonialists have been exploiting us for a long time. Malawians have been growing tobacco for ages but most of them cannot even afford a bicycle, let alone a decent house. I want the exploitation to stop."

Tobacco is Malawi’s most important cash crop fetching over 75 per cent of the country's foreign exchange earning.

Over 80 per cent of Malawians are directly or indirectly employed by the tobacco industry which contributes up to 30 per cent of the country's Gross Domestic Product (GDP) and at least 23 per cent of all tax collections.

Last year tobacco earned Malawi US $472m from a total of 194 million kilogrammes of the leaf.

This year the country’s overall production of tobacco has been projected at 250 million kilogrammes with revenue projected way over US $500m if buyers adhered to the fixed minimum prices.

Over 30, 000 smallholder farmers are involved in tobacco production after the World Bank asked government to liberalise tobacco growing in the 1980s which was heavily regulated.

The southern African country is the world’s largest producer of burley tobacco, a thin-leafed brand that is dried in the open air, after Brazil.

Agricultural experts have observed that a Malawian farmer spends at least US $1.20 to produce one kilogramme of tobacco which means that most farmers do not earn any profit from the leaf since most buyers were offering less than a dollar per kilogramme before the Mutharika administration fixed the minimum prices.