Woes of Biriwiri Farmers Cooperative

Grace Lameck chuckled as she loaded potato crisps into small packs, ready to put the product on the market.

The 47-year-old mother of six, who comes from Kanyimbo Village, Traditional Authority (T/A) Njolomole in Ntcheu, is a member of Biriwiri Farmers and Marketing Cooperative.

“Now, I have two jobs: farming and processing potato crisps. Besides, our cooperative has created employment for university graduates who would otherwise be jobless,” she mused.

Biriwiri Farmers and Marketing Cooperative processes Irish potatoes into crisps with technical and financial support from the One Village One Product (Ovop) project.

The cooperative also sells raw Irish potatoes to renowned hotels and restaurants, including Sun and Sand Holiday Resort in Mangochi.

Ovop national coordinator, Kamia Kaluma-Sulumba, said the cooperative is among a few Ovop-supported groups that have stayed afloat amid economic problems.

However, like many cooperatives under Ovop, Biriwiri is under threat of folding up after economic conditions, loans and other factors conspired to retard its progress.

According to Lameck, the group entered into a working relationship with Ovop in 2008, three years after the formation of the cooperative in 2005.

Prior to the agreement, Biriwiri’s main business was buying and selling Irish potatoes to intermediaries on behalf of its members.

However, the group felt the intermediaries were ripping them off by offering low prices for their crop.

To beat exploitation by the unscrupulous businesspersons, Lameck and other farmers from T/As Mpando and Kwataine joined forces to establish the cooperative.

Their desire was to stimulate production of Irish potatoes and explore new markets for the crop.

It was at this point that the group developed links with officials from Ovop.

“In 2008, we held discussions with Ovop officials. They advised us to write a project proposal and a request for technical and financial assistance to enable us start processing potato crisps,” said Lameck, who is a board member of the cooperative.

It did not take long for the Ovop secretariat to supply the group with a potato crisps processing machine and working capital worth over K5 million.

Within a few months, production began in earnest, much to the delight of members of the cooperative who saw it as an opportunity to turn around their economic fortunes through job creation that would also benefit others in the area.

However, production had barely picked up when some members embezzled the working capital, forcing the group to suspend operations for years.

“But with our support, the members regrouped. Of course, all the culpable members were excluded. After reorganising them, Ovop lent them K361 000 to resume operations because they had nothing in their coffers,” said Francis Sadyamtambe, Ovop project assistant cooperative liaison officer for Balaka and Ntcheu.

Sadyamtambe said despite the financial mess the first group found itself in, Ovop was still interested to invest in Biriwiri because this is the only initiative that gives communities opportunities to engage in economic activities based on their natural endowments and other advantages, thereby eradicating poverty using locally available resources.

When they were joining Ovop, members of the cooperative had every reason to look to the future with hope because when the initiative was adopted from Japan in 2003 government had groups such as Biriwiri in mind.

Government envisaged that Ovop would play a critical role in fighting poverty by giving communities opportunities to engage in economic activities based on their distinctive advantages.

Government expected Ovop to stimulate social and economic growth through agro-processing and job creation, among others.

When he launched the programme, former president Bakili Muluzi said Ovop was an effective tool for diversifying the economy at the local level and creating jobs that would push more people above the poverty line.

The idea was that communities should have at least one competitive product that is distinctively its own to offer to the market. It was envisaged that cooperatives would stimulate social and economic growth through agro-processing and job creation.

The Ovop magic was just too good for members of Biriwiri Farmers and Marketing Cooperative to ignore. After all, Ovop was a crucial platform for Ntcheu, a hub of Irish potato production, to market its ‘gold’ beyond the borders of the district.

However, five years down the line, the story has not been the happy-ever-after tale for members of the cooperative.

The K5 million loan the group obtained from Ovop is proving too big to clear. The loan, charged at a 15-percent interest per annum, threatens to keep members of the group in a web of poverty.

“There isn’t much that has improved among us. We are simply working to service the loan and pay employees. We are not making significant progress here,” complained a member of the cooperative who opted for anonymity.

He said options for achieving independence from their money lenders are limited given the ever-rising interest. He also admitted that the cooperative obtained the loan without understanding its terms and conditions.

“We have been repaying the loan since 2008, yet we are far from servicing even a third of it, not to talk about interest. Every time we pay Ovop something, it goes into settling the interests we have accumulated over the years. How will we achieve independence in such a situation?.

“Imagine that since we started production, we have only paid K9 000 out of the K5 million-plus loan. All this time, we have been struggling to clear the K361 000 Ovop lent us as working capital. Can we claim to be making progress?” said the member.

He also revealed that the cooperative struggles to pay its employees and K52 000 monthly rentals for the building housing the factory.

This has forced the cooperative to bank on grants from the African Development Fund (ADF) through the National Association of Business Women (Nabw), which offered to pay salaries for the senior staff only.

While confirming that the loan is hampering the group’s potential to grow and meet its obligations, production supervisor Maggie Maseko said the cooperative has stagnated because it has not received certification of its products from the Malawi Bureau of Standards (MBS).

Maseko said the group gets most of its revenues from selling raw Irish potatoes to tourism facilities.

“On average, we earn about K8 million per annum from selling Irish potatoes on behalf of our members. Unfortunately, this amount goes straight into the pockets of the members because we are just selling on their behalf. When we are lucky, we get the surplus after paying everyone their dues,” she said.

Maseko said the cooperative would have made significant strides towards servicing the loan had MBS certified its products.

She said the cooperative, which sells a 25g pack of potato crisps at K80 and K1 500 for a 20-pack bale, is restricted to do business outside Ntcheu due to lack of certification.

“We believe certification would have enhanced sales of our products, thereby realising more profits to enable us service the loan and achieve independence within a considerable time,” said Maseko.

But MBS executive director, Davlin Chokazinga, dismissed the concerns over certification, saying there is more to the issue than a domestic or export certification the cooperative is complaining about.

Chokazinga said local producers can still sell their products within or across the borders without an export certificate as long as consumers do not demand it.

“Unless they are trying to say consumers are raising concerns with their products, they can sell anywhere in the world. Hence, the issue of certification doesn’t arise,” he said.

One of the key people behind the adoption of Ovop, former ambassador to Japan Dr John Chikago, said the accusations and counter-accusations over the project are a sign that it has failed.

Chikago said the collapse of some cooperatives is also a demonstration that strong and visionary leadership is missing in the administration of Ovop projects.

He challenged that revitalising the project will require government to deal with “some elements” that are behind the failure.

“For a long time, some of us have been advocating for the revolutionising of the whole system to make sure it ticks and bring the desired fruits. Unfortunately, it seems there is no political will to do this,” said Chikago.

But Kaluma-Sulumba disputed the assertion that Ovop is a flop, arguing that the project has empowered rural communities in areas where it has been successful.

She singled out Bwanje Valley Rice Cooperative in Ntcheu, Mitundu Agro-processing Cooperative in Lilongwe, Kamwendo Oil Processing Cooperative in Mchinji and Wovwe Rice Producers and Marketing Cooperative in Karonga as some of the groups that are still vibrant and are set to grow bigger.

“I am not denying. Challenges are there! But that doesn’t mean the project has completely failed. My appeal to Malawians is that they should give the project time,” said Kaluma-Sulumba.

Lameck believes that rural factories can propel meaningful rural economic growth, but urged government to create mechanisms for protecting vulnerable farmers from exploitation by money-lending institutions.

She said the high interest rates microfinance organisations, Ovop inclusive, charge for their loans are making poor farmers more vulnerable instead of empowering them.

“Although we have created jobs for ourselves and others, our fear now is about how to repay the loan. Should we fail to service it, it will be the end of this cooperative,” said Lameck.