Agriculture for development agenda in Malawi

In this article TAMANI NKHONO-MVULA is trying to the question how can we make agriculture a tool for development.

Since my days as a student in secondary school, I have been told that agriculture is the backbone of this country. However, when I came of age, I have been asking myself the meaning of this “fact” which I have found to be true but wanting in many aspects.

Agriculture is indeed an important sector not only to the Malawi economy but all economies of the world as no country develops or sets itself on the path to development without firstly addressing the issue of food security in one way or the other.

In agrarian societies like Malawi agriculture is central when it comes to food security. However in my quest for answers, I have been asking myself as to why all the years of huge investments into the sector of agriculture, nothing seems to be progressing? Why we are still stuck in poverty and subsistence kind of production?

I have found that the main challenge with our agriculture policies and investments are that they are so obsessed with achieving food security than promoting development and transformation.

I also do understand the dilemma the government, as a duty bearer, finds itself in, in terms of feeding a persistently food insecure population but at the same time, the question I have is; what kinds of strategic investments are we making in the process as a country to get out of this situation?

Malawi needs to reset itself from the agriculture for food security agenda to agriculture for development agenda. To achieve that, there are a number of structural issues to be addressed and strategic investments to be made.

The most important one is to address the disconnect between agriculture and the manufacturing industry which remains one of the most important structural constraints of Malawi’s economy, with a reversal negative feedback consequence for development within each sector.

From now onwards, Malawi needs to start seriously thinking of how to develop its own agriculture processing industry and infrastructure. Malawi must start to own its entire agriculture value chains.

Over-emphasis on raw export crops like tobacco has created a dichotomy of spheres in the agricultural sector in Malawi. The bulk of agricultural investment is devoted to the production and marketing of such export crops, while production for domestic consumption and industry suffers chronic under-investment.

The effect has been the under-development of domestic production for the domestic industry, which happens to be where the overwhelming majority of our population earn their livelihoods.

Within this sphere, families till farms of less than an acre in size; using little more than hoes and other such rudimentary implements. These are mainly rain-fed, with little irrigation. Supporting infrastructure and services, like roads, are minimal or absent.

Extension services and input support, as well as marketing institutions and market stabilising mechanisms disappeared with the onset of World Bank promulgated structural adjustment programmes in the 1980s.

Rural banking and other development finance institutions such as the Small Enterprise Development Organisation of Malawi (Sedom) and Malawi Rural Finance Company [MRFC] which have attempted to provide affordable rural credit have receded, leaving in their wake as the main source of credit the usurious village loans and saving, as well as more recent yet equally restrictive microfinance institutions.

The necessary domestic market for domestic agricultural production, already narrow in scope due to concentration on the production of food crops and also having a very small middle class market, suffers further erosion due to the sustained surges of subsidised food imports flooding the Malawian markets through the unbridled trade liberalisation inspired by the World Bank and International Monetary Fund (IMF).

Malawi imports tomatoes and other horticultural products from South Africa. These unnecessary imports stifle the potential for expanding and diversifying the domestic agricultural market. Such constriction of the market further constrains private domestic investment, whether by rural-based smallholder farmers or national commercial farmers.

Side by side this stagnation of agriculture for the domestic market has been the collapse of domestic industry, especially the manufacturing sector. The attempts by postcolonial government of Dr. Hastings Kamuzu Banda, to build domestic manufacture, having run into difficulty in the late 1970s, were brought to a halt and reversed under structural adjustment.

Indiscriminate closures and privatisation of state own-enterprises including well performing ones, as well as those meant to serve a strategic catalysing role in crowding in domestic private enterprise, went hand in hand with indiscriminate liberalisation of manufactured imports.

The other important phenomenon to note was also the end of apartheid in South Africa. Many of the companies that were producing in Malawi in the 1970s and 1980s were not producing for the Malawi market but south Africa as due to apartheid most countries didn’t want to be seen as having any economic cooperation with South Africa.

However, Malawi had open trade ties with the Apartheid regime. It was safe therefore for these companies to produce in Malawi and export to South Africa.

When apartheid ended most companies like Unilever relocated the production of their world class brands once produced in Malawi such as Stork margarine, Surf, COVO and Reward among others to South Africa.

Somebody asked me, why was Kamuzu International Airport (KIA) so busy in the 1980s with big planes like KLM, British Airways and Air France landing at the airport They were not servicing Malawi but South Africa.

However, Malawi failed to capitalise on this to develop its own industry. So structural adjustment and the end of apartheid in South Africa are what I acknowledge as the main initial reasons for Malawi’s de-industrialisation.

Whatever remains of domestic manufacture consists essentially of pockets of very light manufacture—and even this is under threat from further waves of liberalisation emanating from envisaged international trade agreements like the Economic Partnership Agreement  (EPA) and other unequal bilateral trade agreements. In addition to the burdens of unfair competition from abroad, these operate under essentially unfavourable domestic economic and policy conditions.

Here the most private-sector development policies for Malawi are geared at attracting foreign investment, routinely overlooking the challenges specific to the domestic private sector. Hence, inappropriate macro-economic policies and their outcomes, such as forbidding interest rates resulting from singleminded inflation-targeting monetary policy, have piled onto long-standing problems that have constrained development in this sector, including access to technology, labour, intermediate inputs, and infrastructure.

Above all, domestic manufacture remains limited by a barely existent domestic capital goods sector, with whatever seeds sown in the post-independence period washed away long ago with the deluge of structural adjustment.

Expressed in this is the failure of the hoped for symbiosis between agriculture and domestic manufacture, each sector respectively supplying the fundamental needs, and providing the impulses for the dynamic transformation, of the other, leading to improved productive capabilities in the entire economy and improved living conditions of the people.

In much of the ongoing discussion of the problems of small-scale agriculture, the rural economy, joblessness, and the non-existence of domestic manufacture, little consistent attention is paid to the factors relating to the agriculture-manufacture interface within the domestic economy.

On the contrary, the tendency in mainstream discussions seems to contain the issues and their solutions within each sector. In the case of agriculture, this has been reflected in two largely contending perspectives: one that seeks large-scale agricultural commercialisation through projects like Greenbelt Initiative as the ultimate solution of the problems of the sector, and the other over-emphasising improvements in the conditions of small-holder food production as the trajectory forward.

Discussions in relation to manufacture hardly strain beyond the narrow sphere of so-called agro-processing, a definitive departure from the concerns of early post-independence period and an abandonment of lessons of development experience of much of the world.

In some instances, the potential for intersectoral interrelations are formulated as part of processes outside of the entire economy. Such is the case with programmes for integration of domestic agricultural and manufacturing producers into and through global value chains.

This approach ignores the danger that this would essentially reproduce new forms of the fundamental constraints attendant upon the primary commodity export structure of the Malawi economy.

To address this context, a coherent framework of policy must:

lformulate the specific problems deriving from the technical conditions and social relations of the agriculture sector as well as of manufacturing industry;

lrestructure the existing relations between the two sectors, as well as, if need be, of other sectors of economy like education, energy, road and telecommunication infrastructure;

laddress the needs of rural small-holders while tapping into their agency;

ldeepen national and regional markets around the conditions for manufacturing and industrial enterprise; and,

lexpand the middle class through increased access to tertiary education, opportunity for jobs and decent livelihoods.

Critical to this policy approach is a renewed understanding of the changing dynamics of rural economy and domestic manufacture within the overall primary commodity economy like Malawi; as well as an integrated appraisal of the issues rooted in property and other social relations of power, including gender relations, which define the distribution of access resources, jobs and other means of livelihood.

It is equally essential to build constituency around these issues of knowledge and policy, reinforcing alliances between the academia, activists, government, the industry and the agency of the social groups whose fundamental interests are implicated in this agenda.

However, I still believe Malawi’s agriculture and industry has a future, what we only need is to think, reorganise and properly invest.

My take home message is that Malawi agriculture will never transform and will remain subsistent in the absence of an industrial forward linkage.

—*Tamani Nkhono-Mvula, an expert in agricultural policy and development.