WHETHER TABACCO FIX PRICING WILL BENEFIT LOCAL MALAWIANS

ROVUROVU · Newbie

WHETHER TABACCO FIX PRICING WILL BENEFIT LOCAL MALAWIANS

abre les ojos · Guru

ROVUROVU wrote:

Recent stance by CHITSULO CHA CHANJI to fix starting prices for tabacco,Is this good for malawi or it will scare buyers away.

Tobacco as an export crop is soon to be defunct. It is high time the country started to diversify. With tobacco being banned left, right and centre all over the west it is not something that the economy of any country can rely on. The price fixing might be a temporary solution but it would harm the local industry in the long run.

Black Panther · Senior Member

I think ita a great idea. and it is long overdue that an africn president has the guts to point out that they are buying tabacco at a price that is way too low. Sellers end up undercutting eachother when they are no minimums or standards. There is a minimum that they set prices at in all countries. Almost all commodites in the US that farmers produce come with a minimum price. Why not us ? Those sellers will soon cave in b/c they make more then a 100% profit on that tabacoo. The presiednet shoudl concentrate on builing allies with other tabacco producers so that no one dipd below our minimum.... They need to pay for the value of the product they get... We shouldnt forget that Earl Grye is made from our tea. and the British love tea. If they cant get it, there tea prices go up .... they will feel it...5 cups of tea a day is no joke

Pope · Guru

Black Panther wrote:

I Almost all commodites in the US that farmers produce come with a minimum price. Why not us ? Those sellers will soon cave in b/c they make more then a 100% profit on that tabacoo.

Thats the point we want to hear.Time to fear the buyer should go.The grower should have a say on what price he needs the product to go at.Even a computer has a cost set up by the manufacterer.What these whites need to know is that we are tired of being manipulated and exploited, if they cant afford fare and well let them go to zimbabwe or brasil.

What puzzles me is the way they treat the tobacco from their own estates,they have decided to have floors in their sheds,give each other good prices even the worst leaf fetches more than $1.70.

Bingu should push hard the xellerator,his tough stance is not being dictatorial but trying to say the truth.We should not as malawians fear these tobacco buyers,where do we stand on tobacco production,malawi has the best soil for production of tobacco both virgia and oriental even flue though the last is not nature friendly.

I also agree with the idea of diversification, do you have any idea?

Black Panther · Senior Member

alternative crops?

Id go for Paprika , and other vegetables... but as I have always said, In order for us to grow any alternate crop govt needs to create a need for that crop.... commission cooks to make new Malawian receiped suitable for the village etc.. A lot of pices grow in Malawi but people wont grow goods if they dont know how they themselves can use it.....establish a culture to promote what ever it is first , to make it patlatable, then grow the hell out if it - estb the internal market first and the the interenational one...

Pope · Guru

why is Malawi not doing well on sugar,coffee,macdamia,tea ontop of Paprika?Do we have aagriculturists on this forum.

Black Panther · Senior Member

MALAWI
Malawi's tobacco price fixing burns trade
Posted Thu, 30 Mar 2006

Blantyre – The Malawian government’s insistence of providing a minimum price for tobacco has left sellers at Malawi’s main auction house without buyers since Monday.
On Wednesday, potential tobacco buyers at Lilongwe Auction Floors rejected the minimum prices for low quality ($1.10) and high quality tobacco ($1.70).
The president has received stiff opposition from international tobacco groups saying that price controls go against free market best practice. The President, however, claimed that given the national importance of tobacco, tea and cotton, price controls became necessary to protect the industies from exploitation.
General manager of the Tobacco Control Commission Godfrey Chapola confirmed that the market had been closed because buyers were not interested in paying higher prices. He added “government made a decision on prices (and) it will be government that will make a decision as to what happens.”
The government introduced price fixing after farmers complained that they were receiving less money for the tobacco leaf every year and were struggling to survive. In many ways, the government was reacting much the same way that governments in charge of industrialised countries would react except that in first world countries it is called a ‘subsidy’.
Tobacco is central to Malawi’s economy. The leaf currently brings in 70 percent of forex earnings, accounts for 30 percent of GDP, and provides direct and indirect employment for 70 percent of the population. Given that it also provides 25 percent of the government’s tax purse, perhaps introducing a subsidy would have been wise, however, possibly less affordable. -BiA Online

sepusepu · Senior Member

An agricultural subsidy is a moneytary grant paid to farmers by the government to supplement their income, help manage the supply of agricultural commodities and bolster the supply of such commodities on international markets. The effect of such action is, in fact, lower prices which results in welfare losses for unsubsidized producers. From my understanding what is happening is setting up a price floor. A Price floor is a government-imposed limit on how low a price can be charged for a product.

sepu

-- Edited by sepusepu at 20:32, 2006-03-30

Black Panther · Senior Member

Sepu,

your defnintion of subsidy is the one I know as well... I think the writer used the wrong word aunless subsidy can be used in a different context or way ....

the bottom line though is that President acted in the same way as a western county would excpet in the west its called "protecting, and wise and good" and in African its "fixing and wrong dictatorial and bad" -

Ngwazi · Guru

Black Panther wrote:

President acted in the same way as a western county would excpet in the west its called "protecting, and wise and good" and in African its "fixing and wrong dictatorial and bad" -

Panther,

Lets be honest here,the President may have had good intentions but the manner and where he said those words was inappropriate.Its like at work,when your boss speaks to you harshly in front of your colleagues or juniors,what offends you most is the manner he spoke to you and where he said those words and not why,you accept you are/were in the wrong but you still think how could he say that to me in front of anthu onse aja?and it is the same here and that is why the buyers today are not willing to bulge and pay more.

You have to remember that our Malawi is a liberalised economy whereby the forces of supply and demand determine the price.Its no secret that our farmers have not been getting good prices for a long time,it is even an open secret that such problems arose because the buyers formed a cartel whereby they agreed to work together and not compete against each other so as to keep the prices down and this has worked for them.However you dont reverse a trend by dictating or fixing a price without collective bargaining.The farmers in America get a fair deal because they formed a body and speak with one voice to get a better deal and so did the cotton farmers in West Africa.What we need in Malawi is the same thing,we have two toothless bodies in the name of TAMA(Tobacco Association of Malawi) and TCC(Tobacco Control Commission)who are supposed to protect the farmers yet these bodies have been silent for a long time on these malpractices just because the top hierarchy in these bodies themselves are farmers but are able to negotiate preferential prices for their tobacco in return for keeping low prices for the rest.

Political interference like what Bingu did are counter-productive because these buyers do hold all the aces in this case at the moment and already trading has been suspended because the buyers are not willing to pay the prices Bingu set.The solution lies in letting this tobacco season pass and we accept the market prices being offered and we prepare for next year.These two toothless bodies should wake up from their slumber and put as as a policy or contract/ruling that the minimum prices accepted from next year would be say$1.10 and then we will know that those buyers who comes back next year are willing to pay that amount and not the other way around where our farmers are being exploited.

Pope · Guru

Ngwazi wrote:

, Lets be honest here,the President may have had good intentions but the manner and where he said those words was inappropriate.Its like at work,when your boss speaks to you harshly in front of your colleagues or juniors,what offends you most is the manner he spoke to you and where he said those words and not why,you accept you are/were in the wrong but you still think how could he say that to me in front of anthu onse aja?and it is the same here and that is why the buyers today are not willing to bulge and pay more.:

Ngwazi, the President called these buyers to a secret place for discussion but to everyones surprise these guys went to the media and started spilling beans.They later refused to burge to the demands(to borrow their speech) of the gvnmt.Now Bingu wanted to share with them while they refused and am sure they had a mind of where will they go.So after these fruatrations what would you do to your Junior,kneel down?Never,enough is enough.

They have now burged in and they are paying to Bingus demand.What we need to do is be careful with them they may come with a gun and destroy us.They have already fired casual labourers just to show their muscles.

Ngwazi · Guru

Pope wrote:

the President called these buyers to a secret place for discussion but to everyones surprise these guys went to the media and started spilling beans.

Pope,

Its true that the President called these buyers to a meeting and they were blunt enough with him,they told him that what he was proposing was a non-starter and the next thing they heard was the President dictating the prices and that actually made them to be very angry and they were just flexing their muscles when they caused the trading to be suspended.Now it has resumed but after lengthy discussions with a bit of give and take here and there.

Pope · Guru

Right Ngwazi,we are together now,but you and me know these white fools,they got used too much in the past and they felt they are owners of malawi tobacco.We need to teach them how much it costs to get someones wife......By next year our farmers will be one step higher and buying power will be back in the economy.

Sometimes it pays to do Mugabe's tricks.

Black Panther · Senior Member

I think during the old regime, there was less control so they got used to raping our tabacco sellers. We still need to stand firm. Even if in the end the price is set a little hihger, so be it the farmers are still in a better position then they were. Those Buyers need to get out of dodge if they dont want to pay. So the President did discuss this with them...What are the Tabacco Authorities doing anyways , isnt it there job ? or are the heads of TAMA being raped as well ?

Black Panther · Senior Member

New tobacco company opens shop in Malawi

March 31, 2006, 4 hours, 28 minutes and 13 seconds ago.

By Frank Jomo

Blantyre (AND) A new company, Malawi Leaf has started buying tobacco at the auction floors, which will offer competition to the traditional buyers on the market.

While the traditional buyers, accused of forming a block that is manipulating prices on the auction floors were reluctant to buy the leaf at a fixed price of US$1.10 for lower grade and US$1.70 for high grade tobacco, the new company was buying the leaf at the government recommended price.

Goodall Gondwe says the new company was formed to offer competition on the floors and according to authorities in the tobacco industry other traditional buyers have also started buying tobacco at the government fixed price.

“The problem was that with few tobacco buyers there was no competition in the industry,” said Gondwe.

He said Malawi’s economy being agro-based the country needs to protect its crops.

The company whose owners are not known but rumors are that government has stakes in it, is competing with Limbe Leaf Tobacco Limited, Alliance One Africa Leaf Limited, RWJ Warren and Premium Leaf.

Malawi (AND)

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Pope · Guru

Black Panther wrote:

New tobacco company opens shop in Malawi March 31, 2006, 4 hours, 28 minutes and 13 seconds ago. By Frank Jomo Blantyre (AND) A new company, Malawi Leaf has started buying tobacco at the auction floors, which will offer competition to the traditional buyers on the market. While the traditional buyers, accused of forming a block that is manipulating prices on the auction floors were reluctant to buy the leaf at a fixed price of US$1.10 for lower grade and US$1.70 for high grade tobacco, the new company was buying the leaf at the government recommended price. Goodall Gondwe says the new company was formed to offer competition on the floors and according to authorities in the tobacco industry other traditional buyers have also started buying tobacco at the government fixed price. “The problem was that with few tobacco buyers there was no competition in the industry,” said Gondwe. He said Malawi’s economy being agro-based the country needs to protect its crops. The company whose owners are not known but rumors are that government has stakes in it, is competing with Limbe Leaf Tobacco Limited, Alliance One Africa Leaf Limited, RWJ Warren and Premium Leaf. Malawi (AND) Search for similar stories

Wamisala akati ndikugenda ndiye kuti waponda mwala.Next time am sure we shall deal with vendors the same way, pamberiiiiii Bingoooooo.....Aluta continua