Malawi: Why Mutharika Must not Set Price on Agricultural Products

Folks, you have to excuse me but I will not stop ranting about the state of affairs in loved country, Malawi. President Bingu wa Mutharika has been in the headlines of late, both locally and internationally after ordering deportation of 'foreign' tobacco buyers. Mutharika accused the tobacco buyers of paying less than his set price on the commodity.

I do not have an idea how tobacco is graded and priced. Therefore, I cannot comment on the effectiveness of his policy of having a fixed price on a commodity with quality that constantly changes. What is apparent however, is the fact that Mutharika will have to find buyers from somewhere. Tobacco selling season in Malawi is coming to an end but there is disaster looming in the agricultural industry.

For instance, about a moth before this tobacco incident, The Nation news site reported that cotton farmers in Southern Malawi had pleaded with the government to lower down the set price of MK75 (MK is Malawi Kwacha)because buyers were unwilling to pay the amount due to poor quality of the product. This standstill meant that the quality of the cotton was getting worse by day whilst still in the hands of the farmers. According to the story, the farmers resorted to selling their product to "unscrupulous" buyers who were paying MK30, which is even less than Mutharika's set price.

What this means is that Mutharika's policy may be tough on the "foreign" buyers that he is chasing away, but the truth is that the policy is affecting the very farmers that Mutharika was meant to be protecting. If Mutharika wants to protect farmers, the best move is to anchor the industry to the market; attract as much buyers as possible, the more bidders for the product the higher the price.

I strongly believe this is the only way forward. State regulations will always be there but resorting to dictatorial threats is not a solution. After all, tobacco is a dying industry. I am not trying to write its eulogy here but as a concerned citizen I am surprised that the government has not started looking at its alternatives more seriously.

By the admission of the Principal Secretary at the Ministry of Agriculture, Andrew Daudi, in the last two or three harvesting seasons Malawi has had good tea and coffee harvests. This has also coincided with the rise of the price of the commodity on the international marker. Yet our country stays mum on this and keep its focus on tobacco. Malawi is second-biggest tea producer in Africa, after Kenya. The commodity brings 7.9 per cent of foreign exchange, annually; only second to tobacco. Yet Malawi has only one tea market (in Limbe) where farmers can sell their product?

My point here is that by chasing or deporting "foreign" tobacco buyers branding them "colonialists", right or wrong, Mutharika has priorities and his main priority in this case are the farmers who are clearly not going to benefit from this policy. Mutharika needs to look at a bigger picture. The policy in place will only hurt Malawian farmers, the very people Mutharika is meant to be protecting!