At a time the country is said to have lost around $980 billion due to an existing informal export market, African Institute of Corporate Citizenship (Aicc) says with structured markets, grains and legumes could easily overtake cotton in export earnings at the current production levels.
Over a six-year period, cotton output has dropped by 85 percent, from 100 000 tonnes in 2010 to around 15 000 tonnes last year.
Amid the slump in cotton production, government is on a wider diversification plan which involves the intensification of grains and legumes growing to supplement foreign exchange from tobacco which is the country’s number one forex earner despite dwindling earnings in the past five years.
In an e-mailed response to a questionnaire, Aicc chief executive officer Felix Lombe said cotton trade is more structured than grains and legumes, hence, data on exports is easily captured and reflected in their national accounts.
He said grains and legumes combined, if they had properly structured markets, would easily overtake cotton in export earnings.
“Informal market systems account for 90 percent of the exported grains and legumes at present, vendors, middlemen and other intermediaries export grains and legumes directly to foreign markets.
“It is difficult for government to account for exports through uncharted routes, hence, it loses foreign exchange earnings and, unfortunately, it is the smallholder farmer who is always at the receiving end of any production mischief.
“For us to develop a vibrant structured grain and legume market system, it has to be a slow but sure process of contextualising the markets based on experience gained and lessons from elsewhere,” he explained.
The National Export Strategy (NES) of 2012 identified grain and legume crops as having the biggest potential to support tobacco in the immediate to short-term.
Structured production and markets are said to have potential to boosts export earnings from around $70 million declared currently to over $500 million within a few years.
In an interview last week, head of agribusiness management department at the Lilongwe University of Agriculture and Natural Resources (Luanar), Sera Gondwe, said there was need for research to come up with a standardised and transparent system which would help smallholder farmers and traders in the country to get better prices.
AHL Commodities Exchange (AHCX), one of the two commodity markets in Malawi, has already tipped legumes production as a solution to Malawi’s forex woes.