Malawi’s fairtrade export revenue hits $91m
Export revenue for Malawi’s eight producers and processors under Fairtrade has hit $91 million (about K31 billion) since the country embraced the movement in 2004, cumulative figures at the end of 2012 have shown.
Fairtrade premium—money paid on top of the agreed price for investment in social, environmental and economic development projects—has peaked at $5.4 million (K1.8 billion) out of 129 million kilogrammes of agriculture produce exported.
The country’s eight Fairtrade producers are; Eastern Outgrowers Trust, Kasinthula Cane Growers Association (KCGA), Kawalazi Estate Company Limited, Malawi Association of Smallholder Farmers (Masfa), Msuwadzi Tea Association, Mzuzu Coffee Planters Cooperative Union, Satemwa Tea Estates Limited and Sukambizi Association Trust/Lujeri Tea Estate.
Of the producers, according to the breakdown of the figures, Kasinthula Cane Growers Association (KCGA) has topped the list with exports, thus far, of over 103 million kilogrammes of sugar, raking in $74.3 million (K26 billion) in revenue with premium amounting to $1.8 million (K621m).
However, despite Sukambizi Association Trust exports hitting 7.6 million kg of tea, earning $3.1 million (K1 billion), it received more premium than any other group amounting to $1.9 million (K655 million)
Satemwa Tea Estates Limited, on the other hand, exported 9.2 million kg of tea and realised export revenue of $10.6 million (K3.6 billion) with $916 443 (K316 million) in premium.
The Fairtrade movement, according to Malawi Fairtrade Network, is supporting 18 874 farmers and 11032 workers.
The groups have spent $3.3 million (K1.1 billion) in projects with KCGA leading the pact at 1.5 million followed by Satemwa at $1.1 million (K379 million) with Msuwadzi Tea Association anchoring at $5 243 (K1.8 million).
Masfa, an affiliate of National Smallholder Farmers Association of Malawi (Nasfam), was the first group to join the Fairtrade movement in 2004 and exports groundnuts to European market.
To date, the group has export 1.1 million kg of groundnuts realised $486 000 (K167 million) in export revenue and $51 064 (K18 million) in premium.
The Malawi Fairtrade Network (MFTN) chairperson Doreen Chanje, in an interview last week, advised Malawi’s producers and processors willing to enter the Fairtrade market to not only look at the prevailing entry requirements, but the huge return on investment.
In Malawi, Fairtrade has enabled producers to access international markets, and since its introduction in 2004, it has facilitated entry into the global market of Fairtrade products such as tea, sugar, groundnuts, macadamia, coffee and honey.
The Fairtrade market has standards that have to be met to by producers such as adhering to democratic and transparent governance and decision making at organisational level, social and community development, labour rights and environmental stewardship.
“This [the access to Fairtrade market] is an investment. There is need to decide whether they (producers) are willing to invest to access the market. There is no need to blame the system to have created barriers to investment,” said Chanje, who heads an umbrella body of Fairtrade certified producers and processors.
Entry into the Fairtrade market has its own rules of engagement and includes costs before the producer enters the market such as non-refundable application fee of 525 euro (K264 075) and auditors’ fee of not less than 2 000 euro (K1 million).
According to the Fairtrade Foundation UK, since joining Fairtrade, 25 percent of the annual national sugar production in Malawi is produced from sugar cane that is grown by smallholder farmers belonging to KCGA. Similarly, nine percent of the annual 46 000 tonnes of exported tea is sold into the Fairtrade market.
