7 December 2017

Malawi: Mutharika Stands Firm Against Exploitation of Farmers

Lilongwe — president peter mutharika witness a live trading session inside the action Holdings premises-pic by Lisa Kadango Vintulla

President Peter Mutharika says his government will end the malpractice of exploiting farmers which he said is happening due to informal exports of agricultural commodities.

He made the remarks Wednesday in Lilongwe during his visit to the Auction Holdings Commodity Exchange (AHCX), which facilitates domestic and international trade, mainly grains and legumes under the concept of warehouse receipt.

The president wanted to familiarize himself with what exactly happens on this structured market and facilities that are there to service farmers and stakeholders.

Mutharika said farmers in the country are being exploited due to what he said was an existing informal export market whereby the country has lost around USD980billion.

"Informal buyers come into the country and export commodities but the money never comes to Malawi. Money is disappearing and we have lost around USD980billion through this kind of thing. But we are going to stop that because we want to protect our farmers who have been cheated for many years now," said Mutharika.

The president who two years ago went to Ethiopia to appreciate the opportunities, challenges and how structured markets function said it is high time now money remains in the pockets of farmers if the country is to develop.

"We want to get good prices for our farmers because this country will only develop if there is more money in the pockets of our farmers. That is what we are trying to do by opening up markets and negotiating for better prices for the farmers

"Also, we will soon be introducing the Control of goods Act for the exporting growers which will also help us in exports," said Mutharika.

He however said the concept of warehouse receipt is a new concept and acknowledged the need to civic educate the farmers who might have reservations as regards fears of safety of their commodities.

During the visit, Mutharika was briefed on recent significant developments that have happened after the inception of the market in 2013, the trade process, operations of exchange and was taken on a tour to see how AHCX interfaces with farmers and financial institutions.

General Manager for AHCX, Davis Manyenje told Malawi News Agency in an interview that structured market has a strong potential in Malawi which he described as massive.

"Malawi continues to export a lot of products informally and because of that; there is export under-declaration and a lot of profits are not coming through.

"But under structured markets, we come in with efficiency, transparency and fairness in the pricing mechanisms that are discovered on the market. This means there are also mechanisms to ensure that all exports and profits are duly accounted for," said Manyenje.

He on the other hand attributed that there are significant interventions that have been done like the recent passing of the warehouse receipt bill and the commodity exchange directive which is being championed by the central bank under the Financial Services Act.

"However there are a number of policy frameworks which need to be harnessed so that they come in, at the implementation level, to guide the operations of the market," said Manyenje.


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