Ecama outlines agro exports constraints
Economics Association of Malawi (Ecama) has urged government to address underlying constraints choking agricultural exports, saying Malawi can grow its economy through exports that meet global market requirements.
In a communiqué issued yesterday co-signed by Ecama president Lauryn Nyasulu and executive director Frank Chikuta following the 2021 Annual Economic Conference, the economists body argues that international laws and regulations on supply chain bordering on child labour, human rights and modern day slavery affect the international trade for the country’s agricultural exports.
Reads the communique in part: “Malawi should put in place regulations that mandate adoption of general due diligence to make sure that the value chains comply with these requirements so that the markets are not lost.
“Contract farming is one way of ensuring a more traceable supply chain. Tobacco remains one of the key cash crops for the country with established value chain and market systems as such diversification should not mean moving away from tobacco.”
Ecama said there is need to clear negative perceptions surrounding the future of the crop, arguing the tobacco sector should comply with the international laws and regulatory requirements and also satisfy environmental, social and governance requirements.
The economic think tank bemoaned that commercial agriculture viability in the country is affected by high energy costs, high corporate taxes for commercial agriculture companies, land encroachment, illegal mining, limited value addition and deteriorating soil nutrition.
On the need to complement tobacco as the main foreign exchange earner, Ecama said this can be achieved by building value chains and establishing structured markets for other crops.
Further reads the communique: “The groundnuts value chain was identified as one of the areas with economic potential.
“To assist in its take-off, the country should consider setting a target to increase production to, say, one million metric tonnes in five years and implementing measures to achieve the target.”
Ecama has called for the establishment of a semi-structured market for groundnuts, setting up a groundnuts council and negotiating tariffs with China and other export destinations and ensuring the predictability of export regulations.
In an interview yesterday, agricultural development and policy analyst Tamani Nkhono Mvula agreed with Ecama’s observations, saying there is need for strict compliance with international legal and regulatory requirements if Malawi is to succeed in agricultural exports.
He, however, noted that some of the international requirements do not make sense as they aim at denying the country the opportunity to export finished products.
“What I would advise is that Malawi should seize the African Continental Free Trade Area market opportunities because on the international stage, restrictions will continue while the African regional markets have lesser or reasonable restrictions.”
Nkhono-Mvula said there are many constraints on the entry by commercial companies into agricultural production such as land.
Minister of Agriculture Lobin Lowe earlier said government was keen on addressing constraints affecting large commercial farmer’s participation in the agriculture sector.
He noted that budgetary resources remain constrained, as such the private sector needed to consider investing in the irrigation sector if the country is to achieve rapid economic transformation through investments in the agriculture sector and boost exports.
“After relying on rain-fed agriculture for a long time as a country, irrigation is the way to go in line with the Malawi 2063,” he said.
Legume Development Trust manager Sangwani Makoko said having the majority of the country’s farmers as smallholder, government should consider inclusion of legumes in the Affordable Inputs Programme that will help farmers to diversify their sources of incomes and aggregation for exports.
She noted that some legumes such as groundnuts are resilient to climatic conditions and adds nutrients to the soil which may be an advantage for other crops.
