Commercial agriculture: way to go?

Challenges facing rice production are part of the broader story of Malawi’s small-holder driven agriculture failing to take off and lift millions out of poverty. Could commercial agriculture be the answer?  EPHRAIM NYONDO wraps up the debate on rice production.

Nothing best sums up Malawi’s extraordinary mix of challenges and opportunities than its agriculture. On the one hand, Malawi is home to millions of households that go hungry in a country that fails to grow enough food to meet her needs.

Yet, the country has large tracts of unused land suitable for farming. In fact, increasing yields on the existing farmland by 50 percent would not only meet Malawi’s food requirements, but also provide a surplus for export.

With the global food supply needing to increase by an estimated 70 percent by 2050, Malawi is at the heart of the challenge of food security.

This explains why agriculture in Africa is finally getting the attention it deserves from the continent’s governments and donors. There is now increased pressure on G8 leaders, who met recently in the UK, to tackle the issues at the heart of food insecurity.

But what should Malawi do to benefit from these opportunities and lift her people out of poverty?

In a 2009 research article titled Agricultural Growth and Poverty Reduction in Malawi: Past Performance and Recent Trends, Chancellor College economics professor Ephraim Chirwa argues that in spite of the many policy reforms that have been implemented in the agricultural sector, its performance has been disappointing.

This ties in with the 2006 Ministry of Agriculture report which notes that the country’s agriculture is characterised by low and stagnant yields, over-dependence on rain-fed farming which increases vulnerability to weather-related shocks, low level of irrigation development and low uptake of improved farm inputs.

“In addition, there is low profitability of smallholder agriculture which has been influenced by weak links to markets, high transport costs, few farmer organisations, poor quality control and lack of market information.

“The interplay of these various factors has negatively affected agricultural development and growth, with implications on the contribution of agriculture towards poverty reduction,” reads the report.

Michael Jana, a political economist studying for a PhD in South Africa, has researched and published on the political economy of agriculture in Malawi.

Jana argues that for Malawi to make strides in commercial farming, the country needs to review its agricultural practices.

“We need a radical approach to eventually phase out subsistence farming and bring about commercial farming, create jobs, bring good returns to capital and hopefully be able to fund and develop the industrial sector,” he said.

Professor Chirwa, in a 2011 article titled From Subsistence to Smallholder Commercial Farming in Malawi: a Case of NASFAM Commercialisation Initiatives, shares a critical insight regarding the country’s continued failure in agriculture.

“The dominance of subsistence farming with traditional farming systems in the smallholder sector is one of the concerns in achieving higher agricultural productivity,” said Chirwa.

In searching for a way forward, a 2006 government strategy on agriculture recognises that intensification and commercialisation of smallholder agriculture are crucial to achieving increased productivity and profitability of smallholder agriculture.

So can commercialisation of Malawi’s agriculture be the key to achieving food security?

Experts agree that the process of agricultural commercialisation involves change from traditional self-sufficiency goals towards income and profit-oriented decision making.

For Jana, investing in subsistence farming is essentially hand-to-mouth and can be costly to subsidise in the long run.

“Government would rather gradually subsidise commercial farming that has the potential of producing profits and creating jobs both in that sector and other sectors,” he said.

The model of commercialisation Jana proposes is not out of the blue. In articulating the Green Belt Initiative (GBI), the Bingu wa Mutharika administration said one of the major investment problems big farmers face is lack of large tracts of land viable for commercial farming at the highest possible economies of scale.

Consequently, through GBI, government committed to facilitating the acquisition of land from smallholder farmers.

“The large growers need vast acres for large production … Land has to be identified for them along the Green Belt Initiative and these have to be linked to the banking institutions for inputs such as machinery, fertiliser, seeds, pesticides, labour, and cash.

“Large growers will have to engage in discussions with local assemblies to relocate villages for intensified farming by using heavy machinery…  Irrigation schemes [will] be owned by large-scale commercial farmers and corporate companies [who]…. will be responsible for developing and operating them.

“These will lease the land for a specified period of time as per the current land policy and thereafter determine their priority crops to produce and production strategies to employ,” reads the 2009 GBI concept paper.

However, according to a 2011 paper by Dr Blessings Chinsinga, Dr Henry Chingaipe, Professor Ephraim Chirwa and Michael Chasukwa, titled The Political Economy of Land Alienation: Exploring ‘Land Grabs’ in the Green Belt Initiative in Malawi, it would be difficult for the country to commercialise using large-scale commercial farmers if it does not review its land laws.

“Transfers of customary land in Malawi lack a definitive legal framework and are probably the most politically sensitive component of the GBI. The role of traditional leaders, given their position in the network of political patronage, is likely to yield more and perhaps violent conflicts as land transfers under the GBI scale up,” reads the paper.

Perhaps, with the passing of the Land Bill, which addresses some of the challenges of land ownership, there is hope that GBI could take off.

After a lot of hype, GBI has been bogged down in a web of implementation hurdles.

“Inadequate funding, access to land, misconceptions among communities and lack of private sector participation are some of the problems that bedevils the programme,” said Professor George Kanyama Phiri, GBI coordinator.

According to Kanyama Phiri, five years after its inception, the programme has designed the 530-hectare Chikhwawa Green Belt Scheme whose construction began in June 2012 and is expected to be completed this year.

“We are also currently working on designs for three other irrigation schemes in Karonga, Mangochi and Chikhwawa. We also developed a five-year strategic plan for the initiative, conducted resource mapping, baseline surveys and mobilised communities in target irrigation sites,” he said.

The problems hobbling GBI, the lynchpin of the commercialisation drive, highlight the how far Malawi is to achieving this dream.