Tobacco production in Malawi is one of the nation's largest sources of income. As of 2005, Malawi was the twelfth-largest producer of tobacco leaves and the 7th largest global supporter of tobacco leaves. As of 2010, Malawi was the world's leading producer of burley leaf tobacco. With the decline of tobacco farms in the West, interest in Malawi's low-grade, high-nicotine tobacco has increased. Today, Malawian tobacco is found in blends of nearly every cigarette smoked in industrialized nations including the popular and ubiquitous Camel and Marlboro brands. It is the world's most tobacco dependent economy. In 2013 Malawi produced about 133,000 tonnes of tobacco leaf, a reduction from a maximum of 208,000 tonnes in 2009 and although annual production was maintained at similar levels in 2014 and 2015, prices fell steadily from 2013 to 2017, in part because of weakening world demand but also because of declining quality.
History Malawi began exporting tobacco in 1893, just two years after the British set up a colonial government in the landlocked territory known then as Nyasaland. Malawi gained independence in 1964 and Hastings Banda took control of the nation as president in 1966 and President for Life in 1970 until international pressures lead to the 1994 election that Banda lost. Banda was directly responsible for the creation of the Agricultural Development and Marketing Corporation (ADMARC) in 1971 with the new power to assist any public or private organization with capital, credit or other resources in any projects relating to the economic development of Malawi. ADMARC gave priority to a policy of the development of estates growing Burley tobacco, many controlled by Banda and senior officials and politicians. Smallholders had to support ADMARC's high operating costs and much of its profits came from underpaying them. It only re-invested 5% of funds in smallholder farms but subsidised estates: by the mid-1980s, ADMARC diverted two-thirds of its income into estates. During Banda's presidency, Malawi was one of the poorest nations in Africa. During the 1970s, tobacco production shifted globally from the developed world to the developing world. The volatile economic state in Malawi made the government look favorably to the intensification of tobacco production. In Malawi, tobacco cultivation garnered 15,000 tons in 1961–1963. By the early 1970s, this number was up 90 percent to 29,000 tons. The 1970s marked several changes for the tobacco industry in Malawi that would have a lasting effect on the industry today. International tobacco manufacturing companies identified Malawi in the 1970s as possible ally for fighting against tobacco control. In 1972, the government enacted the Special Crops Act that limited the production of tobacco, tea, and sugarcane to estate owners with no exceptions for small landholders. This restriction remained in effect until 1990. Starting in 1989, labor and human rights activists began calling attention to the use of children in Malawian tobacco production. The Malawian Constitution, adopted in 1994, has provisions protecting children from interference with their education and economic exploitation. Malawi's Employment Act of 2000 states that the minimum age of employment is 14 years of age. British American Tobacco and Philip Morris, two of the largest purchasers of Malawian tobacco, issued labor policy statements in the early 2000s which stated their position against child labor. However, violations still occur in the country due to the lack of infrastructure and ability to enforce these regulations in the rural areas. In 2002, Malawi experienced heavy flooding, causing President Bakili Muluzi to declare a state of national emergency. The agricultural sector was devastated including cash crops and food crops. Since a large amount of Malawi's agricultural sector is devoted to producing tobacco, the country experienced extreme food shortages resulting in famine and starvation. In 2010, the rainfall patterns were not favorable to tobacco growing. While the quality of tobacco leaves improved, the quantity of Malawian crop dropped 6.5 percent in 2010. However, the quality improvement was not sustained into the second decade of the century, as the costs of tobacco production went up after the government reduced then ended subsidies for fertilizer.
Economic impact Malawi had at one point relied heavily on tobacco production and sales to support its economy. Its reliance contributed to Malawi's vulnerable economic position on the global level. Though presently when looking at BOP the earnings from Tobacco stands at about 20% of the country earnings and about 50% of export earnings for the country. In the first decade of the century, Malawi was one of seven countries that derived at least one percent of export earnings from tobacco. Burley leaf from Malawi made up 6.6 percent of the world's tobacco exports and accounts for over 70 percent of Malawi's foreign earnings in 2005, but this had reduced to below 60% in 2010. Tobacco sales generated 165 million dollars per year for Malawi, with tobacco making up 53 percent of Malawi's exports. As the world demand for tobacco has decreased in the current decade, reducing producer and government revenues, the national economy has suffered since 2012.
Liberalization of tobacco The liberalization of tobacco farming in Malawi in the early 1990s reversed the laws that had restricted growing burley tobacco to estates and prohibited small landowners from growing. After liberalization in 1990, Malawi reverted to a pre-liberalization allowance system that limited tobacco farmers' production to a certain productivity quota. The allowance system was abolished in 1996. In 1997, 22 percent of households produced burley leaf. By 2004, however, only 13 percent of growers did. The costs of owning land and having the labor to work the land are restrictive to small landowners.
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