Low-cost financing keyto agribusinesses’ growth

Stakeholders in the agricultural sector say access to low-cost financing and collaborations between agricultural cooperatives and financing institutions are key to unlocking potential of high-value chains.

The sentiments were expressed on the sidelines of the Malawi Agriculture Commercialisation and Productivity Conference in Lilongwe on Friday.

Speaking in an interview, Financial Access for Rural Markets, Smallholders and Enterprise (Farmse) programme specialist Kumbukani Chawanda said the financial support the Ministry of Finance and Economic Affairs provides to the farmers allows them to access farm inputs and technology to add value to their crops.

Farmse, which is jointly funded by the Malawi Government, International Fund for Agricultural Development (Ifad) and the private sector, helps to link farmers to markets for high-value chains and to capitalise on existing opportunities.

Said Chawanda: “Our interventions have had a positive impact on the farmers. We have graduated 16 500 out of 20 000 farmers we had recruited from ultra-poor households.

“We have removed these farmers from the social cash transfer programme.”

On his part, Bomfa Cooperative manager Khanyiwe Shawa, whose organisation produces sunflower oil, said the support from external financiers will help  improve production in the sunflower value chain.

She said: “Our production is limited. The support we will get from Ifad will help us get a refinery where we can produce oil and get by-products such as cotton-seed cake that we can sell.”

Meanwhile, Winstone Yohane from Phata Sugarcane Outgrowers’ Cooperative Society Limited in Chikwawa, said the financial support, technical expertise and business incubation training the group got from its supporters helped the farmers to improve their livelihoods.

He said: “The cooperative has launched some development initiatives in the community.

“We bought an ambulance and set up a scholarship fund to help underprivileged students who have been selected to universities.”

According to the AgDevCo, the cooperative has been profitable and has paid $6.5 million (about K7.2 billion) of dividends to farmers over the last six years.