Malawi’s smallholder farmer experience shows us that the middle-income farmer has nowhere to go

The country gets so much right, but so much wrong at the same time

Malawi is clearly a country of agriculturalists. This is the place that policy-makers dreamed of when they discussed their plans for smallholder farmer led economic growth.

Everywhere you look something is being deliberately and carefully grown. Crops are lined up in rows, and in most fields there is evidence of DIY irrigation, intercropping and tree-planting that demonstrates that these farmers know what they’re doing. A crucial factor considering the sector supports over 80% of the rural population and, on average, contributes about 30% of the country’s GDP. 

So imagine the shock when you walk into “Shoprite”, one of the country’s more pricey shopping establishments, only to discover that pretty much every single fruit and vegetable is being imported, mostly from South Africa. Something clearly went wrong along the way and, when talking to the country’s farmers, it soon becomes clear as to what it is.

Daniel Kampani is a farmer who shows that a transition from the subsistence, low-income farmer to a middle-income farmer is possible, evidence that agriculture is a valid foundation for pro-poor economic growth. He explains that he started farming groundnuts in 1997 as a source of income. But while groundnuts grew well in the area, the farmers were not motivated to grow them because of problems accessing markets. 

When the markets were available they were usually far away and the farmers would have to deal with middlemen who gave them low prices and used weighing scales that had been tampered with. But they had no choice, so went ahead with poor deals. Unable to carry on in this manner, in 2001 Daniel joined the National Smallholder Farmers’ Association of Malawi (NASFAM), an association that offers commercial and development support to over 100,000 farmers and which had initially started off as a USAID project but has since become virtually independent.

A farmer who did well 

NASFAM linked Daniel and other farmers to markets. Today 40% of the groundnuts they produce go to a fair trade organisation called Twin Trading, while 60% gets sold to the South African market and locally. In just 13 years Daniel has moved past subsistence farming into farming as a business and he’s done well. Because of his sales he can to afford to support his family, sending all four of his children to school and has even been able to invest in livestock, now the proud owner of pigs, chickens and goats.

But this is where the fairytale gets complicated. Farmers like Daniel have managed to attain a sort of middle-income status, but moving past that is proving very difficult. This is because the continued growth of farmers is hampered by government policies on market liberalisation, taxes and a lack of support for crop diversification. For example, Shoprite are unable to rely on Malawi’s farmers for fruits because it is not a sure source of supply as a result of low fruit production. This is because the government has just focused on the bigger cash crops such as tobacco, maize and tea, with good reason. A strong recovery in tobacco output boosted the overall agriculture sector growth to 5.7% from a 2.3% contraction in 2012.

Fixing the problem

It’s clearly a crucial product, but this should not come at the sacrifice of all other agricultural produce and the diversification into different sectors which would support an even wider base of farmers, reduce the need for importation, improve food security, and ensure increased growth. The support from the government should come in the form of increased accessibility to seeds, capacity building and crucially, research. 

Another issue holding back Malawi’s SHFs and the development of the industry in general, is that while the government is making noises about a national export strategy which aims to enhance export competitiveness and promote exports of processed agro-products to feed into regional and global value chains, they are not creating a sufficiently supportive environment for agro-processing or for exports. NASFAM for example have set up a range of agro-processing centres to support the industry, from rice centres to sunflower oil and a chilli paste factory, but they are handicapped by poor infrastructure, specifically energy. When electricity is available, the costs are high (due to the domination of the Electricity Supply Corporation of Malawi (ESCOM)) and there is a serious lack of electricity with only 25% of urban areas connected to the grid, and 1% in rural areas – not a conducive environment for SHFs or associations that would want to move into processing.

There is hope

But there is hope. The Malawi government after all did sign the CAADP (Comprehensive Africa Agriculture Development Programme endorsed at the African Union Heads of State Summit in July 2003) compact in 2010, which demonstrates its commitment to agriculture. Thanks to advocacy work by associations like NASFAM, often supported by African philanthropic groups such as TrustAfrica, there has been evidence that the government is listening to SHFs. For example, Malawi used to import eggs from Zimbabwe but these were being sold at a cheaper price than eggs produced by Malawians because of exemptions on duty. Following an outcry, the government is now imposing duties on foodstuffs that can be produced locally.

Currently NASFAM is also advocating for the government to be more consultative on trade bans. John Chipeta, an advocacy officer with NASFAM, argues that whilst he understands the government’s logic in imposing an export ban on certain foodstuffs in order to ensure domestic food security, it needs to be done in a consultative manner and not as a blanket ban. For groups like NASFAM who are pushing for bigger and better markets for SHF, they have signed contracts which they are then forced to back-track on and the impact of this can be detrimental for the future. 

Malawi has a long way to go but despite the hurdles facing it’s agricultural industry, there are signs of encouraging brilliance. With a deeper commitment from government there’s no reason why this small southern African nation cannot move the middle-income farmer forward and turn its fortunes around.

Article from our agriculture ebook, in partnership with TrustAfrica, which can be found here…

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