Tukula Supports Smallholder Farmers in Malawi
In his book The New Harvest: Agricultural Innovation in Africa, Professor Calestous Juma says that supporting smallholder farmers is critical to unlocking Africa’s agricultural potential. Juma, a professor of international development at Harvard University, argues that “smallholder farmers face the biggest challenges but their productivity is essential for improving nutrition and livelihoods”.
Smallholder farmers comprise 2 million farm families and cultivate about 4.5 million hectares of land in Malawi, according to the Food and Agriculture Organisation (FAO). Approximately 25 per cent of the smallholder farmers cultivate less than 0.5 ha on average while 55 per cent cultivate less than 1.0 ha.
Like many other parts of Africa, smallholder production in Malawi is highly subsistent – characterized by low levels of input and low output levels. Despite being resource-poor, the UN agency says smallholder farmers produce about 80 per cent of Malawi’s food and 20 per cent of its agricultural exports.
The Clinton Development Initiative (CDI), an initiative of the Clinton Foundation, develops and operates agribusiness projects that empower smallholder farmers to increase their economic potential. In Malawi, Tanzania, and Rwanda, CDI integrates commercial farms and other agribusinesses with smallholder outreach to increase smallholder farmers’ access to local markets and enable them to participate equitably in those markets. CDI’s model puts farmers first by increasing their access to knowledge, inputs, services, and markets to improve their crop yields and increase and diversify their incomes. CDI works in close collaboration with governments, nongovernmental organizations, social investors, and farmer organizations.
CDI founded Tukula Farming Company (TFC), an inclusive agribusiness, to spur economic growth and opportunity in rural areas as a part of its Anchor Farm model. The Anchor Farm model links commercial farming with large scale smallholder outreach, providing improved access to inputs, agronomic training, and output markets. Further, the integrated model attracts strategic philanthropic investments in basic health and educational services in the surrounding area. CDI began commercial farm operations in the 2008-9 growing season, and TFC was formally incorporated in Malawi in April 2013. TFC operates five farm estates in the Mchinji and Kasungu Districts, Malawi with a total of 3300 hectares and employs 70 permanent employees and 500 part-time workers.
In partnership with the Alliance for a Green Revolution for Africa, CDI and TFC have established a network of more than 56,000 smallholder farmers in the central region of Malawi—in Dowa, Kasungu, Mchinji, and Ntchisi districts. These farmers have realized an average of 150 percent increase in yields—the result of using improved inputs, following advanced climate-smart agronomic practices and implementing integrated soil fertility management. Because their crops are included in sales contracts negotiated by CDI with large commercial buyers, smallholder farmers’ sales prices for soya have increased substantially.
To boost the smallholders’ productivity, CDI and TFC run field days to showcase the benefit of climate-smart agronomic practices and soil fertility management. CDI invites farmers, government extension agents and other government officials, agrodealers and input suppliers, and other stakeholders to field days in order to engage all participants in the agricultural markets. “We also work with input providers to ensure the smallholder farmers get access to seeds and finances,” says Keith Polo, TFC’s Managing Director. Polo is optimistic the intervention will curb poverty, boost food security and improve living standards for smallholders, who own on average one hectare of land. This year, CDI hosted 21 field days, each with over 500 farmers in attendance.
In 2015, TFC signed a ‘Letter of Intent’ (LOI) with the ministry of agriculture in January 2015 to invest in sustainable agricultural growth in Malawi. Polo is hoping to attract more philanthropic partners to improve access to water, health and other social services in the five states where TFC operates.
“The Clinton Foundation has a wide network of partners and supporters who can support such interventions. They want to promote our best practices. But the issue was, ‘how can we increase sustainability?” Polo explains why they signed the LOI. In order to improve healthcare access for TFC employees and the surrounding community, CDI, with the support of GIZ, is currently constructing the first of three health centers on the TFC commercial farm properties. CDI looks for other opportunities to invest in programs and services that will strengthen the local communities in which CDI and TFC operates.
He adds that the LOI was also planned to deepen the TFC’s interaction with partners and the 'international community' and the government of Malawi to assist with providing basic infrastructure like roads, access to security, electricity and water for irrigation.
According to Polo, the Government of Malawi supports investors to access land and secure both their land and equipment.
Even though cooperation with the local government is extremely positive, he says, the enabling environment still has a ways to go – electricity supply and the road networks are poor – and these are some of the key areas where government and the international community could assist, thus providing access to these basic services to the local community but also improving the business enabling environment. In our case, Polo states, access to electricity for the farms as well as neighbouring communities, as well as the clinics and school we are building and rehabilitating is a critical area of investment that Tukula hope it can find cost-sharing partners from the government and international community.
“For example, to get electricity to one of our farms will cost us approximately US$ 250,000 for a 14 kilometer line. This can be cost-prohibitive for a private company,” he notes. Some kind of government or international community assistance or even cost-sharing would be extremely helpful. It is also difficult to facilitate input finance for smallholders given the high interest rates which range between 40% and 50%.
Lack of skilled workers to run the business and lack of technical expertise in designing and setting up irrigation schemes is also an issue according to Polo. CDI and TFC are working with local partners with expertise, such as Malawi Mangoes (another leading inclusive agribusiness in-country) and Netafim (a global leader in irrigation systems) to change this.
According to Polo, TFC is investing approximately US$2m in 2015 to improve its farms’ soils, infrastructure and productive capacity. All of the company’s farms were former tobacco farms, which are renowned for soil degradation, so much of TFC's investment goes towards rehabilitating soil fertility through a mix of techniques including fallowing, intensive liming, crop rotations, and minimum tillage practices.
Although Polo maintains that their main focus is crops, TFC plans to venture into mixed farming by including livestock, mainly cattle, into the business. He believes this will enable it to practice organic agriculture on a far larger scale than it is currently. TFC is currently undertaking feasibility studies on how to sustainably venture into rearing cattle, which they expect to launch before the end of 2015.
He hopes that adding livestock to staples, oilseeds, and forest environmental services will not only make the company more profitable but also transform the lives of thousands of farmers and community members around its five estates.
“We hope to utilise crop residues more sustainably. The cattle will feed on these crop residues. We shall also use the manure as fertilisers for soil rehabilitation and fertility. ”