Agricultural economist Derrick Kapolo says the existing structured markets have failed to bring desired outcomes to farmers as their operations are far advanced to meet the needs of the majority of small-scale farmers.
The country has two structured markets—Agriculture Commodity Exchange (ACE) and Auction Holdings Commodity Exchange (AHCX).
Kapolo said in an interview that the only viable structured market in the country is that of tobacco.
He said if the country can identify value chains in legumes such as soya beans and groundnuts, among others, and assure farmers of ready markets, Malawi can easily diversify the economy through agriculture.
Said Kapolo: “Price and markets are main drivers of agricultural production and if we can address this then we will achieve diversification.
“We have the ACE and AHCX structured markets, but their operations are not aligning to aspirations of the local small-scale farmer.”
He said years back, State produce trader Agricultural Development and Marketing Corporation (Admarc) was playing a pivotal role in providing ready market for farmers, motivating them to grow more cash crops.
Centre for Social Concern (CfSC) economic governance programme officer Lucky Mfungwe said in an interview that there is more that needs to be done for farmers to utilise structured marketsw.
“Structured markets do deduct some taxes from the commodities farmers deposit through the warehouse receipting system which farmers do not really like as they feel it reduces their earnings,” he said.
On her part, Civil Society Agriculture Network (CisaNet) executive director Pamela Kuwali said it is worrisome that implementation of structureed markets progressing is at a slow pace.
“We can attribute the delays to lack of a proper strategy for dealing with informal exports and promote structured markets,” she said.
But AHCX general manager Thomson Chipata differed with the expert views, saying structured markets are the way to go for economic growth and for farmers to benefit from their investments. “Malawi is losing a lot of foreign exchange through informal,” he said.