What are the key challenges faced by the agricultural sector in Malawi?
The agriculture sector in Malawi is unfortunately suffering from very low productivity levels and is basically rain fed. It is also largely a monoculture system with a dominance of maize (food crop) and tobacco (cash crop). There are a lot of challenges related to climate change; soil erosion and progressive fertility depletion has meant that the quality of soils over time has been degrading, and population growth has resulted in farmers having smaller and smaller plots and mostly having to rely on subsistence-based agriculture. There are low levels of mechanisation, very low levels of skills, the transfer of technologies to smallholder farmers is poor, and there is limited access to quality and affordable seeds and extension services.
What are the opportunities for big and small agribusiness companies in the country?
Unfortunately, in Malawi we see a limited number of cash crops. The country’s largest export is tobacco. This is not a very promising crop because globally demand for tobacco is going down. The second largest crop is tea, which is also challenging in the Malawian context because farmers need to replant. A lot of the plantations are very old, and the yield and quality is falling. But we have seen quite exciting success stories in agribusiness and new cash crops are emerging. The EU Delegation has been working on sugar. There are examples of farmers getting together in well-managed cooperatives with good irrigation and technologies and one large company, Illovo, is now buying from them. There is similar potential in products like paprika, beans and coffee. The EU Delegation has been supporting Mzuzu coffee which is now exporting its produce to a number of EU countries.
Labour costs in Malawi are still low and if the government could further improve the enabling environment this would be a very good avenue for Malawi’s private sector to grow.
The EU is funding CTA’s new Southern Africa Flagship Project, which will focus on ICT-enabled climate information services and weather-based insurance. How will these services help farmers in Malawi adapt to climate change?
I am encouraged to see a lot of private sector players interested in the project. For instance, Opportunity Bank; as well as other insurance, microfinance and telecom companies. There is a lot of potential to reach farmers with messages through ICTs like mobile phones. The EU Delegation is going to work through the national extension service and farmer field schools, and this is a potential complementary avenue to deliver messages to farmers in a timely manner. I understand the project will be selling a package to farmers with weather-based insurance and with complementary messages that will be delivered through mobile phones. For example, in Malawi on the issue of the fall armyworm pest that is affecting many crops, the situation could be better managed if farmers could be reached on a real-time basis, with useful information on how to apply the pesticides and when to apply them to combat the pest.
The EU is Malawi's largest trading partner, accounting for about 25% of the country's exports and 13% of its imports. How is the EU Delegation helping Malawi improve its trading relations with other regions of the world?
The EU Delegation is working to support the private sector to boost exports. One of the challenges facing Malawian businesses is the difficulty to certify their products to the standards of importing countries, this includes sanitary and phytosanitary standards.
The government of Malawi is actively supporting the Malawi Bureau of Standards (MBS) and developing a new building for them. The EU Delegation is also supporting MBS with equipment, technology and capacity building. MBS are almost at a point where they will be able to certify a number of tests for Malawian exports and this should benefit Malawian exporters, not only in trade to Europe but to Asia and the United States.
Are there any particular products that will benefit from this certification immediately?
A good example is nuts. Malawi has a lot of potential to export macadamia nuts, and other types of nuts, but they have been affected by aflatoxins. This is one of the first tests that Malawi is seeking certification for so they can test nut exports for the levels of aflatoxins. This will make life easier and cheaper for exporters, who otherwise have to first export samples to South Africa and other countries to get the necessary certificate. Once MBS is accredited they will be able to do the certifications in Malawi, and the process will be much faster.