While government is optimistic that the launch of the Buy Malawi Strategy will help boost and propel local enterprises, some sectors of the economy doubt if the strategy, which was launched by President Peter Mutharika in Lilongwe on Friday, will work.
Mutharika, to ensure that the strategy is a success, advised all workers in parastatals and government agencies to start wearing Malawi made clothes.
He also said 30 percent of goods and services procured by public institutions should be from Malawian enterprises and directed that the Ministry of Lands, Housing and Urban Development should priotise allocation of land to enterprises and investors that would be producing export products.
But Small and Medium Enterprises Association of Malawi (Smea) president James Chiutsi said on Tuesday there are hitches that would equally contribute to the strategy’s failure if not checked.
He said access to finance remains a challenge for most small and medium enterprises (SMEs).
“While we are excited to be part of this Buy Malawi Strategy, we will not be able to contribute much because access to finance is limited,” he said.
Chancellor College–based economics Professor Ben Kaluwa, also believes that there is more that needs to be done if locally produced products are to survive on the local market.
The Buy Malawi Strategy is being supported by United Nations Development Program (UNDP) and the private sector.
Malawi dairy farming woes
Consumption of milk in Malawi is very low. As KONDWANI KAMIYALA finds out, that is just the outcome of a horde of problems Malawi dairy farmers face. He writes:
She has three dairy cows and a frustrated farmer. Loveness Mangazi, a member of the Thunga Milk Bulking Group in Thyolo calls dairy farming perpetual servitude.
To feed the cows, she needs at least six 50 kilogramme (kg) bags of maize husks per month. She buys each bag at K7 000. Then, she has to get fodder, which according to her is no easy thing in the land-pressured district. Daily, she produces between 18 and 20 litres of milk.
“It is most painful that I get a paltry K145 per litre for such hard labour.
“As if that were not enough, sometimes, the processor does not come and we end disposing of the milk—all our pains and labour lost,” bemoans Mangazi.
Her worries are echoed by several other members of the bulking group, who claim they are losing out.
“The processor who gets milk from us, buys at lower prices than other processors like Dairibord and Lilongwe Dairy who get milk from other bulking groups.
“At times, they do not come to collect milk without even telling us so that we should not milk our cows,” says another farmer, Lucius Mzungu.
According to Askim Liwago, treasurer for the group, which has over 300 members and was established in 2004, they produce up to 1 000 litres a day and at times, they have had get rid of it.
“Apart from inconsistencies with our processor, we have also been throwing away milk due to power outages.
“To solve that, we bought a generator on hire purchase but as we are disposing of milk, we are struggling to repay,” said Liwago, before taking Business Review behind the bulking group storage facility, where the scent of disposed sour milk tickles the nose.
While farmers at Thunga are disposing milk at least for seven days in a month, Mpemba Bulking Group farmers are facing a different huddle.
Although last year the Blantyre dairy farmers were disposing of milk as their processor, Dairibord, was not collecting, they are now hit hard with scarcity of maize husks.
During a meeting organised by the Civil Society Agriculture Network (CisaNet), Farmers Union of Malawi (FUM) and Heifer International, several farmers in the area said getting rid of milk was a thing of the past but maize husks (madeya), a vital feed component for dairy cattle, reduces production.
“Not long ago, a bag of husks we were buying at less than K1 000 is now going at K2 500. This is just enough to last three days.
“This leads to low production of milk and the cows also grow thin. Although we now have a ready market for me milk, this is decreasing our profits as we sell the 10 litres we produce daily at K150 per litre,” said one of the farmers, Esther Montfort.
The rising prices for madeya is not a problem for Agness Bibiye and other farmers at Matapwata Bulking Group in Thyolo.
Here, she says, they were trained by the Sustainable Rural Development and Growth Initiative (SRGDI) with funding from the Rural Livelihoods Economic Enhancement Programme (RLEEP) on how to grow elephant grass (locally known as nsenjere to provide fodder even when the rains are over.
“Besides, we do not depend on maize husks as the price has gone up. Rather, we use leukena and glicidia leaves to increase production.
“Growing elephant grass, which is more nutritious, has enabled us to stop cycling to Mulanje or Blantyre for grass,” said the Goliati-based farmer.
Extension workers woes
For John Njanji, treasurer of Namahoya Bulking Group in Thyolo, the lack of extension workers for the farmers in the area is a major problem.
“We have about 500 farmers with only one extension worker. Had it not been for an SRGDI two-year training we would also be facing a problem with artificial insemination experts,” said Njanji.
Maybe he can heave a sigh of relief, as Blantyre ADD deputy programme manager Aggrey Kamanga says government is seeking to employ 200 extension workers countrywide. Currently one extension worker serves over 3000 farmers against the recommended 500.
According to him, currently the group has increased production from 80 000 litres a year to 120 000, raking in between K15 million ($21 645) and K20 million ($28 860)
To avoid being ripped off by processors, they are looking forward to having their own processing plant, having grown their SRGDI revolving fund from K240 000 ($346) to K5 190 000 ($7 489.18).
“We are, however, looking forward to a review in the Milk and Milk Products Act which is not good for the farmer.
“To make matters worse, the three percent withholding tax imposed on us is repressive. As the review is in the process, I wish smallholder farmers were consulted,” says Njanji, who is also chairman general for the Shire Highlands Milk Producers Association (Shmpa).
Among other things, Shmpa—which has over 8 000 farmers producing 1.2 million litres of milk per month—seeks the removal of Section 36 of the Act, which states that all milk to be sold in the cities of Blantyre, Lilongwe, Mzuzu and Zomba must be pasteurised, meaning consumers in the cities cannot buy milk straight from farmers.
CisaNet executive director Tamani Nkhono-Mvula believes this legislation must go.
“The argument that Government put to defend this clause is that it is trying to protect the consumers from health problems as unpasteurised milk is good medium for bacterial activities.
However, if the problem is protecting people, why are they only protecting people from those areas and not all Malawians?” wonders Nkhono-Mvula.
While expressing happiness the law may be amended, Nkhono-Mvula agreed with Njanji that the three percent withholding tax levied on milk be suspended: “Why should dairy farmers be taxed when there are very little services being rendered to them?
“At the same time government should consider putting a levy or a tariff on all imported milk products into Malawi especially those coming from outside the Common Market for Eastern and Southern Africa [Comesa] region to protect infant market of dairy products in Malawi.”
On problems farmers like Mangazi face on uncommitted processors, Mvula advised farmers to enter into written contracts with processors so that the buyers meet the cost of milk when it goes back in situations where they did not come to collect at the agreed times.
He feels the approach taken by the Namahoya farmers—to consider having their own processing plants—is the way to go.
“Farmer cooperatives must invest in machinery to process milk at local level. This will help farmers get better returns and reduce losses as a result of traders not honouring their promises,” said Mvula.
Another option to protect farmers, he says, is to insure their businesses.
Only if this message trickles down to dairy farmers like Mzungu in Thyolo, his cry will remain: “We have always been told that farming is a business. But what type of business can thrive when all we are making are losses?”