The newly-launched Integrated Product System (IPS) holds the promise of a bright future for tobacco production in Malawi.
IPS is a marketing agreement that commits tobacco companies to buying predetermined volume from a grower. It offers growers security, and ensures a sustainable supply for tobacco companies.
Since 2009, JTI has been running a Facilitated Farmers Scheme (FFS), a programme designed to complement IPS. Our FFS provides growers a guaranteed buyer for their leaf by bringing growers and processors together.
Together with IPS, our FFS program is helping to create long-term sustainability of the industry by facilitating growers’ access to low-interest rate financing, extension services, food security, reforestation, child labour prevention and incentives.
These benefits are not available to growers who sell on auction.
The International Tobacco Growers Association (ITGA) undertook research into the effectiveness of the IPS.
The ITGA chose to conduct its research in Malawi as it is one of Africa’s biggest tobacco producers. The researchers spoke to farmers, leaf buyers, leaf and extension technicians (LETs), government and regulatory officials, farmers' organisations, and auction-floor administrators.
The study compared contract farming under IPS with the traditional leaf auction system. The ITGA’s research concluded there is overwhelming support from both farmers and tobacco companies for the IPS.