- Category: Business News
- Written by Bright Kumwenda
The Eight Annual Congress of the Farmers Union of Malawi (FUM) held in Lilongwe recently agreed to lobby government to stop Admarc from buying and selling farm produce.
FUM president Felix Jumbe confirmed in an interview last week that the congress noted that farmers are not getting good returns from their investments because the Agriculture Development and Marketing Corporation (Admarc) is profiteering at the expense of farmers, most of whom are still wallowing in poverty despite growing crops for years.
He said the congress noted that the agriculture sector, despite being the mainstay of the countryâ€™s economy, is not growing as fast as it should because government, through Admarc, is actively involved in agro-trading market.
The sector employs 80 percent of the countryâ€™s total workforce, contributes over 70 percent of foreign exchange earnings and accounts for 39 percent of gross domestic product (GDP).
â€œDays when Admarc was supposed to be buying and selling produce are gone. Even if they are stretched, it will not work because in a liberalised economy, government is not supposed to do business,â€ said Jumbe.
FUM wants Admarc turned into a regulatory body like the Malawi Communication Regulatory Authority (Macra) and Malawi Energy Regulatory Authority (Mera) which will be responsible for building markets and ensuring that the playing field is levelled.
â€œAdmarc started with farmers as Farmers Marketing Board. The role of the board was to buy and sell produce from its members. But at the time, farmers were not allowed to form cooperatives so the then government turned the board into Admarc,â€ said Jumbe.
He said the board was formed to sell crops on behalf of farmers and remit profits back to the producers.Â
Jumbe said Admarc does not only keep the profits, but also stifle prices on the market.
â€œCoffee farmers sell their crop; so why not allow the rest of the farmers to sell their produce as well? After all, the products Admarc sells belong to farmers. So, what is wrong with farmers integrating marketing cooperatives into the value chain so that they get good returns and reinvest the money into the sector?â€ argued Jumbe.
At the official opening of the 9th National Agriculture Fair, Malawi Confederation of Chamber of Commerce and Industry (MCCCI) chief executive officer Chancellor Kaferapanjira also observed that the Malawi economy can only grow if farmers get good returns from their investments.
He said if farmers get good prices, they will be encouraged to grow more crops and this will in turn boost manufacturing industries as they will have enough raw materials for their production.
Kaferapanjira said only a vibrant agriculture sector can help Malawi have a strong manufacturing industry which can transform the country from a predominantly importing and consuming country to a predominantly producing and exporting one.
Admarc chief executive officer, Dr Jerry Jana, said the parastatal can still make money if turned into a regulatory body but that will mean abdicating its social responsibility role.
But Jumbe argued that Admarc, in its present state, is not playing the social responsibility role.
â€œIf anything, it is at a price paid by the local farmer. If farmers take over some of Admarcâ€™s roles, they will operate cooperatives which will have both social and business obligations to its members.
â€œIf they sell their produce, they will share the profits. In the current status, Admarc keeps profits due to farmers,â€ he said.
Jumbe said cooperatives can achieve a lot in terms of commercialising agriculture in Malawi.
â€œIn Kenya, for example, the best milk company, Kenya Cooperative Corporation, belongs to farmers.
â€œMzuzu Coffee is another classic example that if farmers are left to sell their produce, they can even export commodities Admarc is failing to sell abroad because it is run in a civil service way,â€ said Jumbe.