Newspaper article The Canadian Press

It's Time for Malawi to Quit Tobacco

Newspaper article The Canadian Press

It's Time for Malawi to Quit Tobacco

Article excerpt

It's time for Malawi to quit tobacco


This article was originally published on The Conversation, an independent and nonprofit source of news, analysis and commentary from academic experts. Disclosure information is available on the original site.


Author: Julia Smith, Research Associate, Simon Fraser University

Imagine this: You are a farmer in one of the poorest countries of the world. Each year, the price of your harvest falls, but you keep growing the same crop because it is what your mother and, before her, your grandmother farmed.

Due to low prices at the auction house, you sign a contract, even though you can't read, with a company that loans you money for fertilizer and seeds. You use some of this to pay your children's school fees.

You fall sick with headaches and dizziness. Your children stay home from school to help farm. They fall sick too. At the end of the season, the amount paid for your crop is less than the loan plus interest. The purchasing company says prices are low because people on the other side of the world are trying to shut down your business. Apparently, tobacco is deadly.

World No Tobacco Day is May 31, and while it generally focuses on the health risks of smoking, the harms the tobacco industry inflicts are even broader. It has benefited from exploiting farmers in low-income countries like Malawi.

Malawi is the most tobacco-dependent country in the world. In 2015, tobacco leaf comprised 30 to 40 per cent of its total exports, making up 11 per cent of the country's gross domestic product and 60 per cent of its foreign exchange earnings. While tobacco leaf is clearly an important source of foreign exchange earnings at the national level, most tobacco farmers in Malawi live in poverty.

A 2016 study found that Malawian tobacco farmers make an average profit of US$79 per acre, substantially less than the average in the agricultural sector (US$351). It concludes "tobacco farmers are not earning enough to support a sustainable livelihood."

Since the 1990s, there have been accusations that the prices at the tobacco auction are fixed by companies acting like a cartel.

Despite denials, documents from company records suggest cartel-like behaviour. A British American Tobacco (BAT) report admits that "prices are dictated by the manufacturers." A Philip Morris document reads: "We understand from our suppliers that all major manufacturers present... agreed with our viewpoint that these prices were totally unrealistic and after several discussions... prices started to ease back."

And a representative of the Malawi Tobacco Control Commission is quoted as saying: "The price that is paid to the producer, it starts from the cigarette manufacturer." While prices at this year's auction (currently ongoing) are US$1.58 a kilogram, previous years' prices have been as low as US$0.80/kg, leaving many farmers in debt.

Companies provide seed, fertilizer

As an alternative to the auction, tobacco companies encourage farmers to sell tobacco through contracts: Companies provide seed, fertilizers and chemicals in return for a guarantee to sell to that merchant. In 2015, 80 per cent of tobacco in Malawi was sold on contract. Farmers are reportedly not always informed of the details of their loans, such as interest rates, and are not assured a set price. …

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