Malawi: Magufuli Opens Malawi Tobacco Market - Mutharika Orders Tax Exemption for Small-Scale Farmers

25 April 2019

President Peter Mutharika says tobacco small-scale farmers will be exempted from tax from their first ten bales of the leaf with immediate effect.

Tanzanian leader Magufuli speaking at the opening of Malawi tobacco market in Lilongwe

President Mutharika accompanied by his Tanzanian counterpart Magufuli visits tobacco auction floors in Lilongwe

Mutharika was speaking Thursday at the opening of the tobacco marketing market for 2019 which was presided by the visiting Tanzanian President John Pombe Magufuli.

The Malawi leader said government always thinks about farmers, investors, and the economy, adding that the economy needs to grow with stability.

In his remarks, Mutharika also said fertilizer prices will be reduced - apart from the Farm Input Subsidy Programme - to make sure farmers ably buy necessities for their farms.

He also announced that factories will be established in rural areas for easy market access for farmers.

Mutharika also said village banks will also be established to increase the access of loans for smallholder farmers.

He further said the Social Cash Transfer Programme (SCTP), popularly known as Mtukula Pakhomo, will be increased. The programme targets ultra-poor and labour-constrained households who are getting cash transfers every month.

Mutharika, who acknowledged the difficulties arising from the outdated law on the tobacco industry, said the Tobacco Industry Act comes as a reform to the tobacco industry and will protect farmers from selling their tobacco at a low price.

"Malawi's economic growth is founded on farming and for this reason, our farmers need to be protected," he said.

Mutharika said government wants to create better regulation for the industry, provide affordable fertiliser for farmers and protect farmers from drought and climate change.

On his part, Magufuli said agriculture is an integral sector in most of the countries in Africa as it ensures food security, employment, national income and foreign exchange.

However, the sector faces many challenges such as lack of capital for farmers, over-dependence on rainfall, lack of improved farming technology, lack of agricultural inputs and good storage for produce.

Magufuli commended Mutharika for his effort in undertaking initiatives to overcome some of these challenges for example, the establishment of the Green belt initiative.

He also commended Malawi for incorporating other crops in its agriculture sector.

Concluding his remarks, Magufuli expressed satisfaction in the good relations that exist between Malawi and Tanzania and declared the 2019 tobacco market season officially opened.

Expectations are high over the opening of the season as it will boost the country's foreign exchange reserves, a situation likely to strengthen further the local currency against major convertibles.

The opening of the season also comes at a time the country is bound to yield lower than expected volume of tobacco on the backdrop of ravaging floods that damaged and washed away crops, including Malawi's major foreign exchange earner, tobacco.

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