Agribusiness: the future of farming  

For 56-year-old Agnes Soko, agriculture has not only offered a path out of poverty and hunger, but an improved livelihood for her family and many other Malawian smallholder farmers who constitute 80 percent of the population.

Soko, a member of Tikolerane Comsip Cluster in Traditional Authority (T/A) Chikulamayembe in Rumphi, participated in the Legume Enterprise and Structured Production (Lesp) initiative, an agribusiness approach to farming in Malawi.

Comsip (Community Savings and Investment Promotion), in a matching grant principle, provides inputs and supports extension services under Lesp, a value chain initiative under the Livelihood and Skills Development (Lisd), a component of Malawi Social Action Fund (Masaf) IV which helps members enhance their nutrition, get linked to markets and earn income to improve their livelihoods.

From the sale of soy beans, Soko has bought a gas cooker valued at K55 000, a no mean achievement for a smallholder farmer in rural Rumphi.

Lesp is an initiative that enhances the leading role of legume in food, nutrition, income security and sustainable agriculture. The initiative has encouraged members to consider legumes production both as an income generating activity as well as a nutrition project. It has the potential to contribute to the Malawi Export Strategy that emphasises on production of pulses for exports.

But while Soko and a few others benefited from the Comsip initiative that enhances the leading role of legumes in food, nutrition, income security and sustainable agriculture, numerous other smallholder farmers in the country rue agriculture.

As observed in the National Agriculture Policy (NAP), over the years Malawi has allocated considerable resources to increase the production and productivity of crops, livestock, and fisheries. Despite these efforts, production of the main crops, livestock, and fisheries has not increased significantly to match growing domestic demand and available export opportunities.

It is thus stated that the sub-optimal performance of the agriculture sector can be attributed to low productivity as measured by output per unit area of land and labour. Underlying the low productivity is low adoption of agricultural technologies, low access to farm inputs, low mechanisation, low technical labour skills, weak linkages to markets and limited irrigation, especially among smallholder farmers.

NAP observes that a key constraint for many farmers is access to information to guide their production decision. Improved agricultural extension services from both public and non-State providers that give farmers the information they need to address their challenges and to exploit opportunities which they are presented to critically enable Malawi’s farmers to significantly raise their productivity levels.

Meanwhile, the quality of agricultural produce in the country continues to lag behind its potential, meaning that farmers have not been able to capture the attention of high-value private sector buyers, and have instead sold subpar produce at low prices at the farm gate.

Such is the story of many smallholder farmers who constitute the largest private sector group in agriculture. According to 2013 Malawi Labour Force Participation Survey, the employment rate for Malawi is at 79.6 percent. About 64.1 percent of employed persons are in agriculture sector.

Experts argue that turning smallholder farmers into profitable rural businesses that generate surpluses is not only the best way to achieve food security, but also offers a path out of poverty and hunger, as testified by Soko who has a decent home and is food and nutrition secure.

The importance of agriculture to the Malawi economy cannot be underestimated. It is well documented that agriculture is key to economic growth and contributes to socio-economic development of the country. The sector accounts for around 28 percent of the country’s GDP and contributes over 80 percent of the national export earnings, according to the Malawi Growth and Development Strategy III.

But smallholder farmers face an uncertain future as current institutions and governance arrangements are ill equipped to deal with the increasing pressures arising from unsustainable environmental practices and climate change, making it difficult for smallholder farmers to take agriculture as a business.

Some of them are also discouraged by the difficulties of accessing funds or land, the reliance on the hoe in smallholder agriculture compounded by the low and volatile profits.

A renowned agricultural expert familiar with policy, Tamani Nkhono-Mvula observes that taking agriculture as a business has been a desire for many in the country with an interest to see it transforming.

He states that taking agriculture as a business is not being achieved because Malawian farmers face a lot of structural and institutional challenges that are making it impossible for them to achieve this.

Nkhono-Mvula cites lack of a reliable market where farmers can sell their products as one of the challenges stifling the initiative of taking agriculture as a business.

“Malawi has generally a small industrial base which can buy processed products from farmers. At the same time, when farmer cooperatives try to do local processing, no-one to buys from them because the country has a small middle- class that can consume these products.

“Additionally, the small-middle class that we have prefers imported products than buying locally produced products to help uplift our farmers,” he says.

Agricultural marketing systems in Malawi have suffered from several challenges, including deficient or missing infrastructure, policy and regulatory incoherence and low private and public investments, according to NAP. And these constraints have rendered Malawian agricultural value chains uncompetitive, nationally and regionally.

Nkhon-Mvula further notes that the other challenge is the whole issue of farmer organisation.

“To produce to meet subsistence needs and business is not the primary thing to most farmers. As such, they do not belong to any farmer groups. Unless our farmers are organised, it will be very difficult for them to get involved in any meaningful farming business,” he says.

According to him, lack of access to credit is also a major constrain. “In Malawi, credit for agriculture is a huge challenge in the absence of an agriculture cooperative bank. Unless ways are found to provide agriculture sensitive loans, business development for agriculture will always be a challenge. In all these, we need a political will to see things happening, otherwise we are stuck,” says Nkhono-Mvula.

Unless Malawi steps up its efforts to take agriculture as a business as demonstrated by Comsip in the Lesp initiative where members are provided with farm inputs and a ready market through buying of their produce, many smallholder farmers will continue to put in a lot of hard work for little rewards, and disappointing profits and yields will increasingly spurn them.

*The author is Comsip Cooperative Union Limited information, education and communications officer.