Groundnuts could unlock K3tn business potential

In a bid to unlock $1.6 billion (about K3 trillion) in potential groundnuts agribusiness, players in the agriculture sector have proposed incentivising producers with higher prices for aflatoxin-free crops.

This approach, they say, would encourage farmers to prioritise contamination control.

The call comes after Malawi set a target of boosting groundnut output from the current 200 000 metric tonnes (MT) to one million MT by the end of 2030.

However, a study by Mwapata Institute shows that local farmers are not fully aware of how they can contain aflatoxin, a development that could undermine exports.

Lilongwe University of Agriculture and Natural Resources agricultural economist Horace Phiri said containing aflatoxin contamination has remained a challenge because there is no incentive for local farmers to produce non-contaminated seed.

He said: “We operate in a market environment where consumers do not care about aflatoxin contamination and its associated risks.

“Farmers do not get paid a premium to produce pure and quality seed so they will not do that. That will affect the performance in the market.”

To rectify the problem, Phiri urged the government to introduce a grading system to ensure consumers pay more for higher quality seed.

The call echoes sentiments by Pyxus Malawi Limited managing director Ronald Ngwira that groundnuts is a profitable crop along its value chain.

National Planning Commission research manager Andrew Jamali said in an interview on Monday that local authorities should prioritise managing the complications that come with taking care of groundnuts and cereals after harvest.

“The first aspect will be for the local farmers to heed early warning systems and follow the advice made by experts. Second, we need to invest in promoting energy access in rural areas,” he said.

Data from the Malawi Trade and Investment Centre shows that groundnuts accounted for nine percent of the total share of exports in 2022, compared to 45.3 percent for tobacco, the country’s top export crop.

Malawi’s groundnuts exports have hovered around $45 million (about K79 billion) over the past five years, according to National Statistical Office data.