They persisted in becoming risk takers. They initially invested in agribusiness whose business prospects of recouping their initial outlay and working capital as well as getting the just rewards for their toil looked unpromising.
From such humble beginning in 2009 blended with viable business strategies, they are reaping the benefits. They are now failing to meet overwhelming demand of their products thereby creating an inefficient market.
Such is the story of founding members of Nkhotakota Cassava Processors Association who decided to venture into cassava processing to come up with high quality cassava flour for selling to individuals and companies.
“It was risky and many people shunned this business by opting for fishing on Lake Malawi and growing rice which are the main economic activities in Nkhotakota,” says Geoffrey Chikaonda, who is chairperson of the association.
The association, which strives to improve rural livelihood through improved food security and increased household income levels through production and marketing of cassava flour has over 800 members in Nkhotakota and Salima.
The association’s treasurer Kasiya Maliro says in 2009 an advert was put in local papers calling for individuals willing to engage in cassava processing.
Nine people were selected, but only eight showed up for follow-up training.
“The eight comprised five people from Nkhotakota, one from Salima and two from Lilongwe. This was followed by exchange visits to various districts to enhance their competences on production of cassava flour. The process involves uprooting of cassava, drying, grinding, sieving and drying again.
“This whole process should take place within 24 hours to produce cassava flour because failure to comply with this 24-hour rule does not produce cassava flour,” he says.
“Drying, for instance, is a very crucial stage because if it is not adequate, it affects the quality of the flour such that it no longer becomes high quality cassava flour. Thus, weather and drying place contribute to the outcome of cassava flour,” he adds.
Maliro says later on the membership dropped following resignation of two members from Lilongwe because of the varieties of cassava grown in the district.
He says the varieties were not bitter and they had higher average production costs than average revenue, hence losing out on competitive advantage with other varieties.
Target costing proved futile and the only way of making profit could have been passing on some of the production costs to buyers by increasing prices, losing out on comparative advantage and influencing cost-push inflation.
“With the bitter varieties like the ones grown in Nkhotakota, four kilogrammes of cassava produces one kilogramme of high quality cassava flour. The bitter variety is high yielding and has readily available market for flour produced out of it,” he says.
Maliro says processing machinery was bought with funding from United Nation’s Food and Agriculture Organisation (FAO) and each of the six members had to pay a deposit amounting to half of capital expenditure.
“In February 2011, the processing machinery arrived and a consultant from Ghana enlightened us on how best to go about processing cassava to come up with high quality flour.
“Each person was processing one tonne of high quality cassava flour per month and we decided to form an association to address swelling demand of the flour as well as to partner with farmers who provide cassava as raw material,” he says.
“During that time, we had not identified reliable markets, a situation which resulted in little production of flour. The cassava farmers were then frustrated that we were not buying cassava from them and some relinquished from this value chain. After forming the association by including 65 farmers clubs from Nkhotakota and 10 from Salima, the membership grew to over 800.”
–Eyeing high quality products–
The association’s mission statement is to produce and market high quality cassava flour through value addition using best agronomic practices, talented personnel, modern and innovative technologies in compliance with healthy, safety and environmental standards while creating wealth for its members.
Guided by business principles and values of hard-work, teamwork, networking, honesty, innovative, accountability and transparency, the association aspires to be the leading supplier of high quality cassava flour in Malawi.
Maliro and Chikaonda say they are hopeful of fulfilling their vision because of existence of readily available markets for the flour as Maldeco Fisheries and Universal Industries indicated that each needs 10 tons of high quality cassava flour per month.
“At one time, Raiply indicated that it needed over 300 metric tons of high quality cassava flour. The demand also comes from Lake Shore Bakery in Salima and community members who buy the flour and mix it with wheat flour to produce various food products,” says Chikaonda.
Maliro adds: “The good thing with our association is that it is surviving because of the commitment of its members and not through donations. Even the structures we are using like the drying racks were erected by us.”
When President Peter Mutharika officially opened the 26th Malawi International Trade Fair in Blantyre which drew close to 200 local businesses and four international companies, he said Malawi is geared to maximise value added products to meet international demands.
The President observed that currently, Malawi’s agro-based products are failing to fetch international markets because they are not value added.
He said that it is time the country has to interact with foreign businesses to embrace new innovations that will assist them to produce high quality products that will promote export.
“This country must be transformed and this can only be done by enhancing its capacity to produce more traditional crops such as cotton, tea, tobacco, coffee, groundnuts, tomatoes cassava, peas, beans, among others, processing them into finished products for export,” he said.
Chikaonda says they have participated in trade fairs in Blantyre to market the flour, but they lack capacity to meet the demand although they formed a national association after amalgamation of five cassava processors associations.
“I am producing 1.5 tons to two tonnes a month, but I aspire to be producing five tonnes per month. Production of high quality cassava flour is also negatively affected by lack of adequate potable water supply. Each processing machine has a capacity of processing only one tonne of fresh cassava to come up with 250 kg of high quality cassava flour per day.
“We would like to have solar dryers and better machinery because when we had gone to Nigeria for education visit, we saw machinery capable of producing nine tonnes of high quality cassava flour per day,” he says.
The education visit was organised by Land O’ Lakes who are implementing Food for Progress (FFP) Project in Nkhotakota and Salima, following findings of cassava, rice and small livestock value chain assessments in the two districts.
Regarding usage of cassava during the 2010/11 season in Nkhotakota, 64 percent of the output was consumed by the producers and only 10 percent was sold while three percent was given to friends and 23 percent was in stock in form of dried cassava (makaka).
This was different from Salima where 79 percent of cassava output during the same season was sold.
Land O’Lakes has, therefore, called on cassava farmers to move a step forward to business perspective by focusing not only on consumption, but also on selling to improve their lives.
Chikaonda says what is needed is awareness to the farmers to produce more cassava. He says sometimes the association does not produce more high quality cassava flour to avoid creating hunger among the farmers since the crop is also food to some people.
“People flock to the lake because they want fast cash at the expense of growing cassava which takes about nine months to mature. They are not patient but they can change because change takes place gradually. Priorities also matter because some people have cassava processing machinery but they are not utilising them,” says Chikaonda.
The association is registered with Ministry of Industry and Trade and recognised by government and various stakeholders such as Cassava Add Value for Africa which linked the association to Malawi Bureau of Standards (MBS) and spearheaded the formation of national association.
Such formation of local business organisations or economic clusters of enterprises and value chains, mobilising community assets and putting them into productive use and promoting economic development partnerships and alliances is crucial for poverty reduction in line with Malawi Growth and Development Strategy (MGDS II).
Primary beneficiaries of such initiatives are economically active rural poor who have the potential to embark on business ventures.