Salvaging soya bean trade in Malawi

Soya production and utilisation in Malawi is increasing rapidly due to demand from poultry millers and soybean based products such as soymilk, soy flour and soy protein.

The growing demand coupled with attractive farm gate prices has stimulated significant interest in soya production among smallholder farmers and larger commercially oriented growers.

Between the period of January and March 2014, the Agricultural Commodity Exchange (ACE) registered a record high of 56 000 metric tonnes demand of soya beans on forward contract in the coming marketing season as requested by large scale processors on the local manufacturing industry on its trading platform as a pre-season demand.

This sadly will not easily be achieved because the formal marketing system of soya in Malawi is flawed due to a majority of small scale farmer still opting to trade their produce through the informal marketing structures which are often extortive and exploitive.

Further, the soya research sector is also facing multiple challenges as a result of inadequate funding for research and there is almost a zero subvention from government.

As a solution to these impeding issues, the Civil Society Agriculture Network (Cisanet) with financial support from Usaid through the FtF-INVC programme is implementing an initiative aimed at incubating agricultural innovation platforms that will see the birth of Soya Association of Malawi (Soyama) whose overall objective is to advance and promote the development of a competitive soya value chain in Malawi.

“The idea of looking at value chain for cash crops in smallholder communities is to analyse the full linkage between the production of an agriculture enterprise such as soya beans and the final consumer utilising the goods produced. It often involves what are expected to be high value crops that are often quality sensitive crops requiring extra care to obtain the quality or critically timed marketing opportunity” said Cisanet programme manager Tiwonge Msonda-Banda.

Soyama as an innovation platform aims to address the most essential determinant of what farmers will produce within the crops or other farm enterprises that are possible within the physical environment, analyses the market structure and links farmers to all value chain players for their needs.

Malawi produces more than 85 000 metric tonnes of soya beans per year. Most of the soya bean is exported raw and little is processed for food domestically. Malawi’s soil is very conducive to soya bean cultivation and farm gate prices are internationally competitive. Malawian farmers would overwhelmingly respond to increased demand for soya.

Malawi imports crude oil for refining into cooking oil. SOYAMA will therefore work towards enhancing opportunities that exists in investment in soya bean oil extraction and tofu making as evidenced by a high demand for cooking oil both locally as well as in the Sadc/Comesa region.

According to Msonda-Banda, due to the increasingly high demand for soya beans, in 2013, soya prices have been as high as K290/kg (about $0.72/kg).

As a result, farmers are earning considerably higher incomes, which they can spend on sending their children to school, buying farm inputs such as seed and fertiliser, and improving their homes with burnt brick and iron roofs. Some of them have even invested in non-farm businesses such as grocery stores.

SOYAMA would like to see value chain actors undergoing an economic revolution, said Msonda-Banda.

Sweet stories like these will however not be easily achieved without intensive sensitization on producer farmers and small traders since there are several management problems that also needs to be resolved.

“Therefore, Soyama is essential to facilitate the effectiveness of the soya value chain. Soyama will be there to facilitate the introduction or enhancement of the soya value chain by evaluating all the links between the smallholder producers and the final consumer. This includes any valued added processing that may enhance the value of the crop as it moves up the chain, independent of simply moving up the chain with the normal costs of transport and handling,” explained Msonda-Banda.

In its recent plea, the Malawi Investment and Trade Center (Mitc) invited investors to invest in soya bean processing activities due to significant volumes of soya bean cultivated in the country.

“Through Soyama, we are currently consolidating, validating and prioritising issues hindering development of soya value chain in Malawi that will eventually lead us to commissioning of policy research studies and analyses on the prioritised issues” he said.

Soya as one of the important grain legume crops in the world has a very high protein content, reasonable oil content, and potential to fix nitrogen well in excess of its own requirements.

Apart from its nutritious value to humans and animals, it can also assist in soil improvement leading to a higher level of sustainable agriculture, with minimum inputs.

Thus soya beans have the potential to become a major component in the farming systems of Malawi. The crop can be grown for both subsistence use and cash income.

This is mostly for processing into confined animal feed, but there is some direct consumption. There is a substantial amount used by various NGOs in supplemental feed programs dealing with a largely captive audience in school lunch programmes, hospitals, orphanages and refugee relief programmes.

Soyana is a private sector led agricultural innovation platform operating on a public private partnership concept.