Special Edition

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August 2015

The

This publication is published with funds from the European Union for the Farm Income Diversification Programme (FIDP)

This publication has been produced with the assistance of the European Union. The contents of this publication are the sole responsi-

bility of the Farm Income Diversification Programme (FIDP) and can in no way be taken to reflect views of the European Union.

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Inside The Business Farmer Page

Dowa Macadamia —————— 5

Piggery proven viable —————— 6

Cassava value addition —————— 7

Hara produces rice —————— 8

Two hives guarantee —————— 9

MAGAMO needs cooler —————— 10—11

Chowo Paprika —————— 12

Demand for Misuku Banana ———— 13

Word from the Imprest Administrator—— 3

Overview —————— 4

The Malawi’s government policy direction is enshrined in Malawi Growth and Development Strategy (MGDS)

and the Agriculture sector is ranked one of the key priorities to transform the economy from predominantly im-

porting to a predominantly producing one. In response to Government priorities the Ministry of Agriculture, Irri-

gation and Water Development has been implementing Farm Income Diversification Programme (FIDP) with

financial and technical support from European Union (EU) since 2005. So far the Programme has been imple-

mented in two phases (FIDP I and FIDP II) but the Government of Malawi signed an addendum to Financing

Agreement to continue implementation of FIDP II with a top up funding amounting to 23million Euro from 2014

to December, 2019. This additional phase is however named FIDP Phase II since it is just an addendum to exist-

ing Financing Agreement.

The objective of FIDP is to contribute to the reduction of poverty in Malawi.

The FIDP II will mainly focus on agribusiness and nutrition in order to address some weaknesses identified in the

previous phases. The phase will concentrate on involvement of private sector in identification, development and

strengthening of viable agribusinesses. This then means that the major implementation approach is using large

grants to be provided to private firms with aim of promoting the business culture amongst the farming communi-

ty. It expected that the farmers will have the capacity to manage their production and access reliable and sustain-

able markets at local, regional and international levels. The programme also aims at direct interaction among

farmers and buyers and other agribusiness value chain players. The Ministry of Agriculture through its Depart-

ments, Programme Coordination Unit, Agricultural Development Divisions, District Agriculture Development

Offices and Extension Planning Areas will mainly play a crucial role of providing policy direction, coordinating,

monitoring and evaluating implementation of activities to ensure that objectives of the programme are achieved.

The Project will be implemented in Chitipa, Karonga, Rumphi, Mzimba and Nkhata-Bay in the North; Dowa,

Salima, Lilongwe in the Centre; and Balaka, Chiradzulu and Thyolo in the Southern Region. The programme is

being implemented through Programme Coordination Unit housed at the Department of Agricultural Extension

Services of the Ministry of Agriculture to realize the following result areas:

1. Smallholder agriculture productivity increased and diversified

2. With private sector involvement, viable agribusiness and processing opportunities identified, developed and

implemented

3. FIDP farmer group management capacity enhanced and developed

4. FIDP group social dynamics developed and enhanced

5. Capacity of farmers and district level staff (through participation of civil society) to better understand

household nutrition issues related to agriculture and Scaling Up Nutrition (SUN) implementation enhanced

It is highly expected that the programme will build capacity of both farm

- ers and institutions to deliver much-needed agribusiness services to in

crease food, income, and nutrition security in Malawi.

Page 4

Overview

This is a special Farm Income Diversification Programme (FIDP) Phase II Top-Up News-

letter which highlights some selected activities in all the 12 districts in which the pro-

gramme operates. Some of the activities captured include beekeeping in Salima, paprika

production in Lilongwe, macadamia nuts in Dowa, banana production in Chitipa, starch

making from cassava in Nkhotakota and Nkhata Bay, piggery in Balaka and Mzimba North.

In Rumphi apple production has been highlighted while in Karonga rice value addition has

been covered. The farmers in these selected groups like many others supported by

phased out FIDP I and II demonstrated self-sustenance or lack of it.

For some groups, the culture of entrepreneurship is evident while others still believe they

will have to be supported both financially and materially.

All in all the farmers need a culture of entrepreneurship to progress but the majority still

have the feeling they will need a hand.

Page 5

hen it comes to macadamia growing in

Dowa, the name that comes immediately

is that of Betland Kapondo. Many more

have followed the entrepreneurial farmer in this

field. The current Chairperson for Nachisaka Maca-

damia Cooperative

in Dowa Biswick

Kambiri admits that

he was inspired by

Kapondo’s success

story to start grow-

ing macadamia.

Kapondo’s success story has been instrumental in

attracting about 50 farmers who form the macada-

mia cooperative in Dowa. The farmers have the

resolve to get to the level of Kapondo though they

have some way to go before they can attain that

feat.

“Selling our macadamia nuts through a cooperative

is beneficial even though the prices are lower than

selling directly to the buyers outside the coopera-

tive,” says Kambiri, he says attendance so far is

poor.

“We still need some external help in terms of train-

ing. It appears there is no trust among us that we

can train ourselves and improve the cooperative,”

says the cooperative chairperson. The cooperative

is scheduled to be meeting quarterly but it meets

monthly though attracting participants that barely

form a quorum.

Nachisaka Macadamia Cooperative raised money

close to MK200, 000 which was used to purchase

soya and maize for resale when demand for the

commodities rises. The cooperative still in its teeth-

ing days, intends to employ full time staff to run

the entity on behalf of the board.

To achieve credibility, the cooperative would like

to ensure a gender balance, encourage a culture of

transparency and accountability where all mem-

bers should be in a position to follow operations of

the cooperative and appreciate what is due to

them.

The majority of farmers have some years to wait

before starting harvesting macadamia nuts which is

done once a year and sold at MK2802.50 per kg for

first grade.

The future for macadamia nuts is promising with

ever growing demand for the commodity both lo-

cally and internationally.

W

Pic: Betland Kapondo

Page 6

ix-member Ngongomwa Piggery Group in Ba-

laka has been in business since 2007. The ini-

tial pigs were given to the members by the

Farm Income Diversification Programme (FIDP).

The beneficiaries later shared the animals in a pass

-on-programme. Now everybody owns their own

pigs but the communal pig house is still functional

and used by members.

Amy Malasa a member of the piggery group says

members are now breeding pigs at the communal

pig house for sharing to replenish their depleted

stocks of individual numbers whose animals have

been sold out. Members own up to 10 pigs per

household.

On the business aspect, Ngongomwa has been

able to sell both piglets and grown pigs to vendors,

individuals and institutions though the trend has

dropped in number of pigs sold in the past year

due to shrinking of the market size.

“Non-governmental organizations which used to

buy our pigs are no longer buying from us these

days and it is only vendors around here who are

our main buyers,” says Malasa.

Ngongomwa virtually needs fresh ideas to move

forward to adapt to the changing market dynam-

ics.

Still in its infancy, 21 people in Msengacharo,

Mzimba North run the piggery business. Having

been given seven pigs by the Farm Income Diversifi-

cation Programme (FIDP) in 2014 the members are

still on the drawing board in capturing the business

approach to the industry.

Before engaging in piggery, the group started in

2008 with 10 people in Msengacharo according to

Baby Munthali as an irrigation group. The members

say they are working as a group from feeding the

pigs, right to selling them on the market.

Msengacharo members target the local buyers as

their future market.

One of the group members, Kondwani Kamanga ad-

mits that it is an uphill task to surmount to raise the

pigs to a point where they can be sold at a profit.

The group nonetheless plan to grow into a coop-

erative and be able to employ personnel to look

after the animals. For Msengacharo all is but a

learning curve they will go through to claim any-

thing tangible.

S

Page 7

and other related products. FIDP funded the construction of cassa-va processing plants for the two cooperatives, Tiwonerepo in Nkhotakota and Limbikani in Nkhata-Bay.

Dorothy Kawere, the treasurer

for Limbikani Cassava Coopera-

tive says members have the ca-

pacity to produce cassava both

for domestic use and starch pro-

duction.

The plant is expected to produce

2,000 kg of starch cake from

10,000 kg of cassava in 8 hours

which the farmers feel is insuffi-

cient contrary to what they ex-

pected as indicated in earlier

agreements which pegged the

machine capacity at many times

higher than the installed plant.

The Nkhata Bay plant is only ca-

pable of producing cakes which

will be further processed in

Nkhotakota for starch an ar-

rangement Limphasa society

members find wanting. The

members are sceptical of the

cost involved in transporting the

cassava cake to Nkhotakota. The

members say they would be will-

ing to handle the whole produc-

In Nkhotakota and Nkhata-Bay, cas-

sava growers are determined to change this traditional thinking by converting the crop into a commer-cial product and fill the ever in-creasing market demand for cassa-va flour and cassava starch.

Nkhata Bay is Malawi’s leading cas-

sava producing district with an out-

put of 10 tonnes per hectare. Cassa-

va is grown on about 840 hectares

for 200 growers in the area sur-

rounding Limphasa and Chombe

which translates into 35,000 tonnes

of cassava per year according to sta-

tistics at Chintheche Extension Plan-

ning Area.

With support from Farm Income Diversification Programme (FIDP), close to 30 farmers from Nkhata-Bay and Nkhotakota districts have organized themselves into coopera-tives with an aim of processing cas-sava into high quality cassava flour

tion processes up to the market

point other than handover unfin-

ished products to a different enti-

ty that might cause confusion in

accounting for revenue in the

end.

In addition the factory will be

producing cassava flour of high

quality. The members say they

have the capacity to produce cas-

sava enough for both starch pro-

duction and domestic use.

Loiness Nyirenda a member of

the cooperative says interest re-

mains high in the group as the

members continue to meet and

share knowledge. The coopera-

tive is anxious to see how the

sharing of a drier at Banga in

Nkhotakota will come to fruition.

Page 8

Hara Producers, Processors and Mar-

keting Cooperative Society Limited

(HARICO) has been operational for a

number of years yet it needed capaci-

ty in many areas in order to consoli-

date its market share and later ex-

pand to other markets.

HARICO needed capacity building in

terms of infrastructural development,

value addition and marketing strate-

gies. FIDP met the cost of warehouse

and office construction, destoner and

grader all amounting to MK12.1 mil-

lion.

The cooperative has 164 members

with 74 women and 90 men making

up the entity which has shares valued

at MK10.35 million in 2015 according

to Peter Msomphora, HARICO secre-

tary. A share as of 2015 goes at

MK2071. Many more members are

joining the cooperative.

In 2015/16 season the society has

bought rice worth MK10 million for

grading, stocking and to resell later.

The dominant varieties the coopera-

tive trades in are Kilombero and Faya

both highly scented varieties of rice.

Main market for HARICO is their shop

which is on the Karonga-Mzuzu road at

Uliwa Trading Centre, about two km

from its offices, while the other shop is

in Mzuzu. At its Uliwa shop, HARICO

sells between 3 to 5 tonnes a month.

Mzuzu Sunbird Hotel buys up to a

tonne a month.

“The majority of customers find it too

long to branch off the stretch to come

buy rice here but Uliwa is apparently a

convenient spot,” says the secretary.

HARICO can only stock up to 50 tonnes

a year but 60 tonnes could be meaning-

ful enough to help the cooperative

break-even.

There are plans to have outlets in Li-

longwe and Blantyre to cater for cus-

tomers in these cities and another shop

in Mchinji to target buyers from Zam-

bia. So far HARICO manages 50 tonnes

a year but would like to treble this fig-

ure in order to sustain and expand the

business.

HARICO still requires refresher trainings

for its members especially those who

join the rank and file of the coopera-

tive.

HARICO products have been pre-

certified by the Malawi Bureau of

Standards which means Kilombero

and Faya are export products.

The cooperative which expects a MK3

million profit this year is self-

motivated by owning the business of

such size a feat the majority of farm-

ers elsewhere can just dream of.

Transparency and accountability de-

termine that members are fully aware

of the operations of the institution to

maintain its credibility and profitabil-

ity.

The cooperative manager Arnold Muk-

wala says members are given farm

equipment, seed, fertilizers and other

farm related needs on loan or cash

loans are given to members not ex-

ceeding the shares they hold with the

cooperative.

HARICO is on its way to expanding its

local market and penetrating markets

outside now that its products are cer-

tified by Malawi Bureau of Standards

(MBS).

Page 9

alawi has about 5000

small-scale producers of

honey owning some 10,000

hives. The activity is much of a

par time activity for most bee-

keepers. Apart from the small-

scale producers there are a few

medium and large scale semi

commercial beekeepers. These

beekeepers use improved hives,

which can produce much more

than the traditional hives used by

the majority of the beekeepers.

Apart from honey hunting, tradi-

tional beehives are the dominant

way of collecting honey in Mala-

wi. Some beekeepers received

from projects improved hives

which have a considerably higher

yield potential than the tradition-

al hives. However, the bars used

in these hives don’t allow for pro-

cessing with a centrifuge. For

processing with a centrifuge, the

honey needs to be on racks.

The Chinguluwe Beekeeper Asso-

ciation started in 2002 with 14

groups of beekeepers covering

256 members and 300 hives. All

hives were traditional ones. With

the assistance of FIDP and the

government of Malawi improved

hives were introduced as well as

improved bee farming methods

(protective cloths, smokers) and

in 2009 the construction of a fa-

cility for collection, processing

and sales of the honey started.

Beekeeping is a traditional activi-

ty in Chinguluwe.

There are three harvest seasons

for honey in Chinguluwe. First

harvest from June to July

giving about 10% of the

annual yield, second har-

vest from August to Sep-

tember giving about 65%

of the annual yield and

third harvest in November

giving about 25% of the

annual yield.

The traditional hives in

Chinguluwe area give an annual

yield of 6 kg per hive while the

improved hives give an annual

yield of 40 kg per hive. Beekeep-

ing is a traditional activity in

Chinguluwe.

The Chinguluwe Beekeeper As-

sociation started in 2002 with 14

M

Continues on page 11

Page 10 Continues on page 11

phompha Apple Growers and Marketing Or-

ganization (MAGAMO) in Traditional Author-

ity Mwankhunikira, Rumphi

has 71 members with 31

women and 40 men, grow-

ing apples for commercial

purposes.

MAGAMO in the process to become a cooperative

society limited started in 2003 with few bushes but

has now close to 50,000 trees grown

on 20.7 ha according to the body’s

vice chairperson Golden Mlowoka

Chirwa.

Vendors are the main market for the

apples but attempts to use chain

stores such as Shoprite proved suc-

cessful in 2014-2015 season supply-

ing 786.5 kg to Shoprite and 38.213 kg were

sold to hawking vendors. MAGAMO sold graded

apples to Shoprite at MK495 per kg while vendors

bought ungraded apples at about MK150 per kg.

“We are willing to produce and sell more but we

will need to sell our products even beyond the sea-

son when apples are in demand,” says Chirwa. So

far apples are in season from October through to

December coinciding with fruits such as mangoes

which are in season this time too. The availability

of mangoes makes the prices for fruits quite com-

petitive. Apples suffer low pricing this time.

To preserve the apples beyond the season

MAGAMO needs a cooling house to keep apples

for sale when they are needed during times

when fruits are scarce. Plans to build a cooling

house had been modified to turn the building

into warehouse due to technicalities. Chirwa

says the building meant for a cooling house of

the apples did not meet the required standards

for the purpose.

“Without a cooling house it is a challenge to pre-

serve the apples beyond December. Apples are

in demand from

January when we

have little supply

of other fruits,’’

says Chirwa.

MAGAMO is now

planning to start

a juice making

venture using the

apples that will remain unsold

other than sell them at give-away prices.

For its own sustainability MAGA-

MO has an orchard at its leased

place with 400 trees estimated to

realise about MK4million a year

once the bushes start producing.

Members also raise money through

contributions of about MK2000 per

member per year. MAGAMO banks

In Traditional Authority Mwankhunikira, Rumphi

has 71 members with 31 women and 40 men,

growing apples for commercial purposes.

M

Page 11

from page 10 - apple needs the cooler

groups of beekeepers covering 256 members

and 300 hives. All hives were traditional ones.

With the assistance of FIDP and the Govern-

ment of Malawi improved hives were intro-

duced as well as improved bee farming meth-

ods (protective cloths, smokers) and in 2009

the construction of a facility for collection, pro-

cessing and sales of the honey started.

The Association has to develop into a Coopera-

tive as the Association is not a formal business

entity in Malawi.

Chairman of the association Lloyd Daza ex-

plains that the amount of honey sold through

the Association was not more than 1800 kg in

2012 while the production of the members was

around 14000 kg. The members sell the honey

individually to clients who buy directly from the

farm and through trips to Salima. For the facility

to be able to work profitable, the members

should sell most of their honey through the facili-

ty.

The socio economic structure of the members in

Chinguluwe Beekeepers shows that none of the

beekeepers with traditional hives can make a full

time business out of beekeeping. Only the bee-

keepers ones with more than two improved hives

can make a full time business out of beekeeping.

At the moment only about 40% of the members

of the Association qualify as full time beekeepers.

The improved hives are producing honey on a bar

which doesn’t allow for processing with centrifu-

gal force.

From page 9—two improved hives

its sales proceeds with one of the commercial banks in Malawi.

MAGAMO will also have to overcome the transport hurdle by acquiring a cooling van to transport the

apples to the market to have them fresh when they reach the destination.

Plans are being hatched to build a training centre on its 2.7 ha leased land with good accommodation

to raise funds for the group and provide in-house training for members for business innovation and

growth. Water has already been connected to irrigate apples and for electricity all preparatory work

has been done.

MAGAMO is apparently confident enough to overcome some of the production and marketing chal-

lenges but a good transport system would make it even easier for the members to have flawless ac-

cess to the market.

Page 12

Members of Chowo Cooperative in Traditional Au-

thority Chitekwere in Nkhoma, Lilongwe are mobilis-

ing resources to put their business on the right

footing. The cooperative’s main commercial product

is paprika which has a steady market in Exagris Afri-

ca Limited.

Cooperative chairman Dete Chakwana says paprika

Grade A in 2015 was sold at MK700 per kilogramme

to Exagris up from 2014 asking price of MK400 when

the entire commodity was sold to hawking vendors

who offered a price of MK820 per kg.

“This year vendors offered to buy our paprika at

MK650 per kg while Exagris Africa Limited pegged it

at MK700 for Grade A which was more attractive

than the vendors’,” says Chakwana. Vendors buy

ungraded paprika. Chowo Cooperative sold 3500 kg

of paprika, well below the target figure of 10, 000

kg. Poor rains affected paprika output for Chowo

Cooperative farmers.

The cooperative does not have data for 2014 sales

having sold their paprika as individual members to

the hawking vendors. The members reckon that sell-

ing the commodity individually is a loss to the coop-

erative which depends on revenue realised from

collective sales through prescribed deductions from

each member’s revue earned through cooperative.

The paprika farmers are able to demonstrate some

level of sustaining their business through stocking

other commodities other than paprika such as maize

and soya stocked at their warehouse built with

funding from the Farm Income Diversification

Programme (FIDP).

In 2015 the farmers raised up to MK850, 000 which

has been put aside to purchase agriculture products

for resale in time high demand. The cooperative ex-

pects to buy 80 bags of maize each weighing 50 kg

and 15 bags of soya each weighing 50 kg. The coop-

erative is scheduled to sell these commodities dur-

ing thin periods from January to March in 2016. Sim-

ilar arrangements have proved profitable in the

past. In 2014 farmers bought a 50 kg bag of maize at

MK3, 500 and sold it later at MK12, 000 to non-

members of the cooperative while cooperative

members bought the same at MK10, 000.

Chowo Cooperative secretary Msekandiana Chilima

says the current status of the cooperative is

attracting more members to join them. Chowo Co-

operative has strong structures and the business

concept is entrenching.

Page 13

A banana growing group in Misuku, Chitipa has seen its fortunes grow from growing bananas as a subsist-

ence crop to a commercial one earning farmers close to a maximum of MK100,000 a year from barely a

quarter of that revenue five years ago.

The group chairman Wipyana Musukwa whose 13-

member group received help from the Farm In-

come Diversification Programme (FIDP) in 2010 has

however some distance to cover to attain a com-

mercial status of recognisable scale.

“We do not sell the bananas as a group. Every

farmer manages his or her own bananas from pro-

duction to market and we don’t have any records

as a group as such,” says Wipyana.

FIDP introduced to the Misuku farmers Giant Williams, a variety that has seen a

jump in banana production per hectare per farmer registering a three-fold in-

crease in yield.

“There is high demand for Giant Williams because it soft and sweet, that is what

many consumers tell us,” testifies Mughoma Banana Club chairman. A business

culture is evidently lacking among the members. Coupled with challenges to

access a viable due to poor road network, the farmers will need much external

help to stay in business.