The Mwapata Institute says Malawi could earn $97.1 million (K170 billion) per annum from soybeans and add 35 700 jobs by implementing three policy reforms targeting the value-chain of the subsector.
In a policy brief, the institute targets boosting local feed industry through targeted poultry reforms, improving the marketing and trading regulation of soybean products and enhancing the export of soybean and oil cake through public-private sector partnerships aimed at export promotion.
Titled ‘Policy options for unlocking the potential of Malawi’s soybean value chain’, the reforms could redirect the currently exported seed cake towards domestic processing, utilising the excess installed capacity and targeting the production of value-added Textured Vegetable Protein soya products for export markets.
“The second policy reform is focused on an improvement in the marketing and trading regulation of soybean products, including the removal of buying permits; the third is removal of minimum price setting; removal of export restrictions and the creation of a supply and demand industry forum to promote transparency and market information.
“The reform aims to create a conducive environment by improving farm gate prices and reducing the raw material purchase price of processors to expand production and exports,” reads the policy brief.
According to Mwapata Institute, implementing the three policy reforms could have a direct impact on the gross domestic product (GDP), job creation and poverty reduction.
F o r i n s t a n c e , implementing the local feed and soy-pieces reform would add $12.4 million (K21.7 billion) to the GDP, marketing liberalisation reform would raise the gain to $43.7 million (K76.5 billion) while implementing all the three would add $97.1 million.
“The gains include 12 600 jobs based on local feed and soy pieces reforms; 8 900 additional jobs from marketing liberalisation reforms; and 14 200 jobs from soy product export reforms. If all the three reforms are implemented, 35 700 jobs would be created.
“The results show strong poverty impacts, with between 20 500 and 101 700 people lifted out of poverty by 2030 relative to baseline poverty of 9.4 million people,” it reads.
In an interview, Farmers Union of Malawi President Mannes Nkhata said the research policy brief has exposed the real challenges that soybean farmers are facing and acts as the guideline for policy makers on initiatives to uplift the sector.
“First, soybean farmers lack access to certified and improved seed that can increase their production and productivity. As a result yields for most farmers are still below one metric ton per hectare against the potential of up to three metric tons per hectare.
“The policy brief is also spot-on on the issue of export bans. They reduce competition among soybean off-takers thereby suppressing domestic farm gate prices. This eventually disincentivies soybean farmers,” Nkhata said.
In a separate interview, agriculture policy expert Tamani Nkhono-Mvula said the policy reform proposals have come at a right time when the country is underutilising soybean value-chain potential.
For instance, Nkhono-Mvula described the export bans that are regularly imposed on soybean as a sign of production deficiencies as producers fail to satisfy the domestic market.
“At one point, Malawi was the leading producer of groundnuts in the region. That should translate the potential of soybean production as the two crops are both legumes meaning the latter could equally do well in most parts of the country,” he said.
Earlier, Ministry of Agriculture director of crop development Elida Kazira said the ministry is banking on mega farms and introduction of modern varieties to boost soybean production which would enable the country to satisfy export markets, including China.
