National Smallholder Farmers’ Association of Malawi ...ksiconnect.icrisat.org/.../NASFAM-Presentation-at... · National Smallholder Farmers’ Association of Malawi 1. Partnership

National Smallholder Farmers’ Association of Malawi

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Partnership for Smallholder Development to Access Markets

BY DYBORN CHIBONGA, Chief Executive Officer

Prepared for Seminar Presentation at ICRISAT Headquarters, Hyderabad, India, March 22, 2012


Presentation Outline1. Introduction to Malawi2. Smallholder Farming in Malawi3. Challenges for Smallholders4. The Birth of NASFAM: A Paradigm Shift5. NASFAM Corporate Structure6. Vision and Mission7. Development Methodologies8. NASFAM Functions9. Strategic Services to Members10. Partnership for Development of Market Access11. Linkages to Markets: Domestic and International 12. Keys to Success13. Main Challenges14. Conclusion

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Introduction to Malawi

Population: 14 million

Population growth: 3%

Urbanisation: 14%

Population living in poverty: 52%

Access to improved water: 66%

Adult Literacy: 64%

HIV prevalence: 12%

Life Expectancy: 49 years

Agricultural sector:

• 85% of the labour force

• 35% of GDP

• 90% of foreign export earnings

• 65% of raw material for industry‘The Warm Heart of Africa’

Presenter

Presentation Notes

Malawi is classified as a least developed country with an estimated GNP per capita of $182 (1999). Poverty is estimated at 65.3% based on the Integrated Household Survey (IHS) of 1998. Adult Literacy rate is 42.6%. Due to the effects of HIV/Aids the life expectancy has been reduced from 42 years in the 1990s to 37 years. The main causes of poverty are constraints on economic productivity of land, labour and capital. Agriculture is the mainstay of the economy, and affects the welfare of over 85% of the population who derive their livelihood from it, either directly or indirectly. Agriculture accounts for over 35% of GDP and 90% of export earnings which accrue from three main crops namely tobacco, tea and sugar. 65% of raw materials for the infant manufacturing sector come from agriculture.


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• Average farm size 1 hectare, with the hand hoe as the main tool.

• Employs 80% of the population.

• Accounts for more than 85 % of agricultural production

• Primarily subsistence farming.

• Main food crop is maize, supplemented by rice, cassava, sorghum, pulses and sweet potatoes.

• Since early 1990s, smallholders have been allowed to produce/export industrial crops.

Smallholder Farming in Malawi


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Challenges

for Smallholders

• Limited access to credit and high interest rates

• Unaffordable prices for agricultural inputs

• Limited access to inputs, particularly certified quality seed

• Weak bargaining power and low product prices

• Lack of access to markets

• Insufficient access to technology, equipment and knowledge

• Weak institutional linkages and extension structures

• Lack of voice to defend smallholder political and economic interests


The Birth of NASFAM: Paradigm Shift

• NASFAM emerged out of greater recognition that the answerto smallholder situation and challenges lied in working inorganised groups.

• Farmer members chose to work in association after beingchallenged that their future lies in being organised.

• Meanwhile NASFAM has 14 Association ManagementCentres with 43 viable Associations which form NASFAM atnational level with an overall membership of 108,000farmers.

• Thus, NASFAM is organized as a farmer-directed businesssystem where farmers promote and market cash and foodcrops such as chilies, groundnuts, tobacco, cotton, rice,soya, and beans.

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Presenter

Presentation Notes

NASFAM began in 1994 as the Smallholder Agribusiness Development Project (SADP), a USAID funded project to organise smallholder tobacco production Since 1995 the focus has diversified to production of other cash and food crops including groundnuts, rice, chilli, cotton, soya and other legumes NASFAM, as it is now, was legally registered under the Trustees Incorporation Act in February 1998


NASFAM Corporate Structure

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NASFAM CorporateProviding System coherence –

Finance, IT, HR, Admin, Association Management &

Governance

NASFAM Commercial(for-profit Co.)

NASFAM Development

(Registered as an NGO)


Our Vision…

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“NASFAM exists to improve the lives of smallholder farmers. Through a sustainable network of smallholder-owned

business organisations, NASFAM develops the commercial capacity of its members and delivers programmes that

enhance their productivity”

‘To be the leading smallholder owned business and development organisation in Malawi that promotes farming as

a business, producing economic and social benefits for its members, their communities and the country’

Our Mission...


NASFAM Development Methodologies

NASFAM Development

Methodologies

Work with Motivated Farmers

Promote Farming

as a Business

On-site Technical

Assistance

Develop Linkages

with Service

Providers Fiscal

Management and Control

Build Capacity

of Farmers


NASFAM Functions

Commercial Functions

• Marketing of smallholder crops to domestic, regional and international markets.

• It also assists member access to affordable farming inputs such as certified seed, crop protection products and fertiliser.

Development Functions

• Capacity building of members to farm as a business, through crop production, business and adult literacy training.

• Provides member community support for food security, gender equality and HIV/AIDS mitigation, as well as advocating on behalf of smallholders for policy change.

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Strategic Services to Members

Crop Production and Marketing Farm Supply Shops

Capacity Building

Policy and Advocacy

Food Security

HIV/Aids & Gender IntegrationInformation and Communication

Rural Infrastructure DevelopmentAdult Literacy/Numeracy

Linkages to Service Providers

Conservation Agriculture

Governance Leadership and Democratic Institutions

Monitoring Evaluation & communication


Partnership for Development of Market Access

• NASFAM as a smallholder farmer organization does not possess all the technical competencies and strategies for overcoming smallholder challenges.

• Works to establish and nurture partnerships that enhances the effectiveness of NASFAM.

• Partnerships and collaborations play a critical role in enhancing synergies and improving programme efficiency and effectiveness. – Any activity conducted by another organisation which furthers

NASFAM’s vision or goals is generally beneficial to NASFAM membership and thus welcomed and supported.

– All the better if NASFAM can influence the manner in which it is carried out.

– NASFAM therefore maintains an open dialogue with most organisations involved in smallholder farmer and rural development – both public and private sector.

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The NASFAM- ICRISAT Partnership

• Over the years, NASFAM has been spearheading a crop diversification agenda to reduce reliance on maize and tobacco.

• One of the major challenges to this agenda has been access to quality certified seed as well as development of varieties that are suitable in the present changing climatic conditions.

• The NASFAM-ICRISAT partnership was born during our Strategic Development Plan I from 2000-2005 to address these challenges.

• NASFAM provides its member Associations with a deeper level of technical assistance and acts as a conduit for results from research on new technologies, crop varieties etc.

• ICRISAT on the other hand as a seed breeder, multiplies seed so that many farmers can have access to good quality seed.

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Developing Short and Medium Term Crop Varieties

• In response to short rainfall seasons, ICRISAT has assisted NASFAM in partnership to develop short to medium duration groundnut and pigeon pea varieties.

• Historically, pigeon peas have been a Southern Region crop for Malawi. By developing the new varieties, NASFAM has been able to introduce the crop, with shorter season varieties, to the Central Region.

• By growing these varieties, such as ICEAP 00557, farmers were able to still have a good harvest even when the rainfall seasons were short.

• In order to make this seed more widely available to smallholders, NASFAM is running various seed multiplication programmes that are designed on the basis of a revolving fund.

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Enhancing Smallholder Farmer Access to Certified Seed

Currently, the NASFAM-ICRISAT partnership is contributing to the following projects:

1. AGRA Soil Health ProjectThe project aims at increasing benefits of smallholder farmers from improved soil fertility through integration of Pigeon peas, Groundnuts and Conservation Agriculture in maize production systems in Malawi.

2. Rural Livelihoods Economic Enhancement Project (RLEEP)This project aims at increasing incomes of smallholder farmer families through enhancing their participation in the groundnut value chain.

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3. The Egmont ProjectThis is an HIV/AIDS impact mitigation project which aims at reinforcing smallholder capability to respond to impact of HIV and AIDS through on-farm and off-farm income generation and locally available nutrition security measures.

4. Irish Aid Conservation Agriculture ProjectThe overall objective of the project is to promote selected principles and practices of Conservation Agriculture among smallholder farmers in order to achieve sustainable agricultural production, thereby achieving sustainable food and cash crop production while reversing environmental degradation.


• NASFAM works with over 100,000smallholder farmers to form andmanage cohesive grass roots farmergroups for input and output marketing

• Brings benefits of economies of scaleand bargaining for better marketingterms

• NASFAM members produce differentcrops which are sold to domestic andinternational markets

• Association centres are keyprocessing, collection and marketingpoints.

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Linkages to Markets – Domestic & International . . .


Associations are supported in terms oforganising transport to market. This iswell established for tobacco growingmembers.Domestically, focus is on comparativeadvantage – NASFAM links farmersto service providers rather than tryingto provide all services.In terms of international markets, Fair-trade customers (such as Twin TradingLtd) play a key role in buyinggroundnuts from NASFAM for retailersin the UK such as Co-op, Tesco,Sainsbury’s as well as the own labelLiberation (www.chooseliberation.com).

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Linkages to Markets – Domestic & International . . .


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• NASFAM started shelled Groundnuts trading in 2001.

• Commenced exports to the Region in 2003 and to Fairtrade markets in 2004.

• Export stock quality management was done through HPS (Hand Picking Selected) method

• In conjunction with ICRISAT, commissioned Aflatoxin management activities in 2005

• In 2007, acquired and manages the AflatoxinTesting Laboratory

• In 2007 developed a partnership with a private Groundnut processor for roasted nuts production

• In 2008, Installed Electronic Groundnuts Grading plant in Lilongwe.

• In 2010, installed groundnuts oil extraction plant in Lilongwe

• Commenced seed multiplication to distribute Certified Seed

Moving Up The Value Chain – Input Supply, Farmgate Trading, Wholesale Processing, Branding and Exports


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• Introduced NASFAM Farma Nuts Super Grade Raw Nutsin 2005.

• Introduced Farmers Pride NASFAM Roasted and saltedPeanuts in 2007.

Moving Up The Value Chain – Input Supply, Farmgate Trading, Wholesale Processing, Branding and Exports


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• Own Fleet of Distribution Vans. • MK1m Marketing Campaign.• 3 Own Retail Outlets for Branded Products • Exports of Aflatoxin free Groundnuts to UK – Fairtrade, USA &

RSA.• In 2009 a Break through of Groundnuts Exports to Caribbean

Islands. • In 2011 formed Afri-Nut and installed Advance Processing

Plant to enable Production of Blanched Nuts and Groundnut Paste

Exports of processed nutsValid Nutrition - Ready to Use Therapeutic Foods (RUTF)Peanut Butter

Moving Up the Value Chain – Own Distribution, Marketing Campaign, Exports


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• Liberation was established by fair trade pioneering organisations Twin Trading (www.twin.org.uk) and Equal Exchange (www.equalexchange.co.uk)

• Liberation Foods’ shareholders include farming groups in – Malawi – Mozambique– Nicaragua – El Salvador – Bolivia – Peru – Brazil– India

• It is 42% owned by these groups, which represent 22,000 farmers, and 58% owned by ethical investors.

The International Nut Producers Cooperative (INPC)

http://www.twin.org.uk/

http://www.equalexchange.co.uk/


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Branded Product Range

• Harry’s Nuts! 120g Peanuts• Harry’s Nuts! 90g Cashews• Harry’s 227g Peanut Butter• Harry’s Nuts! 50g on Backing

Cards• Harry’s Nuts! 50g on Clip strips

• Liberation Peanut & Cashew 150g

– Lemon & Chilli– Natural– Lightly Salted

• Liberation Peanut Butter 6 x 227g

– Smooth– Crunchy

New Product Development• Harry’s Nuts! 25g Cashews• Harry’s Dry Roasted Nuts!• Harry’s Honey Roasted Nuts!• Nut Snack Bar• Christmas Range


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Keys to Success

• Commitment to work only with self-motivated farmers.

• Careful research before geographic expansion.

• Only areas with strong economic and human potential selected.

• Links to service providers made rather than trying to provide all services.

• Awards1st Position Agriculture Fair 2008 & 2009 – No 2 in 2010Yara Award for African Green Revolution 2009

National Smallholder Farmers’ Association of MalawiMain Challenges

1. Impact of Climate Change2. Association directed, Area focussed Economic

Growth3. Smallholder led solutions to livelihood

challenges4. Market & Business Development linkages5. Overdependence on tobacco & maize6. Membership Growth and participation

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National Smallholder Farmers’ Association of MalawiConclusion

• Traditional ways of farming by smallholders is a Challenge – Farming is Business

• Marketing of raw produce at the Farm Gate faces many challenges including unstable prices.

• It is desirable to move farmers up - through value added processing (for Local markets) and out (in processing for Regional and Fairtrade markets) for them to benefit from farming as a business.

• The NASFAM-ICRISAT partnership has enabled more smallholder farmers in Malawi access good quality legume seed.

• NASFAM has for three years running provided legume seed to the Farm Input Subsidy Programme.

o Over 700MT tonnes of seed were provided to the programme in 2011 and this was enough to benefit over 300,000 farmers.

• NASFAM has been able to access domestic, regional and international markets for groundnuts following quality and productivity improvements.

• The partnership is making available legume and rice seed on the retail market hence reaching out to the general farming community.

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27The End

“The future belongs to the organized”/‘‘ Science with a … Human Face’’

Thank you / Zikomo!

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National Smallholder Farmers’ Association of Malawi ...ksiconnect.icrisat.org/.../NASFAM-Presentation-at... · National Smallholder Farmers’ Association of Malawi 1. Partnership