EXPLORING OPPORTUNITIES FOR INVESTING IN PARTNERSHIPS WITH FARMER ORGANISATIONS: Demystifying smallholder cooperatives performance - Part 1

By George Z Goliati 

A media report on successful progress of a smallholder farmers cooperative 


Farmer Organisations in Malawi 
Whether smallholder farmer cooperatives are successfully playing a major role in commercialisation of smallholder agriculture or not, is enigmatic to many of us. While NGOs proudly express satisfaction and gratitude over successful formation or progress of cooperatives through media, many researchers on the other hand tell some sad stories about the cooperatives performance. For those of us considering of joining the rural smallholder farmers collective approach into commercial agricultural investments, the vision is always blurry. Therefore, an indepth understanding of capacity and performance of the smallholder farmers organizations becomes a very important element. 

With Malawi's agricultural land estimated at 61.41%1, poverty rate at 51% and population growth excepted to double by 2038 from 17 million people in 20182, commercialisation of subsistent agriculture becomes the key economic strategy. This has been already responded by the government and donor community. For instance, the World bank has committed over US$250 million to finance two major projects which include Agricultural Commercialisation (AGCOM) and Shire Valley Transformation Programme (SVTP). The projects ultimate aim rests on integration of smallholder farmers into commercial value chains, not just ending hunger. 

Despite dominating food production, smallholder farmers are the most poor and food insecure. The fragmented nature of smallholder farmers is the basis of their limited participation in the commercial value chains and the economy at large. This includes limited land holding sizes, high illiteracy levels, lack of off-farm incomes and unavailability of conducive infrastructure for markets, extension and other services in their remote areas. That is why to achieve commercialisation of smallholder agriculture, collective approach is not an option. 

Through the aggregation of smallholder farmers (SHFs) into Farmers Organisation (FOs), SHFs become better equipped to address these numerous challenges they face as individual farmers3. It has been noted that farmer organisations' functions including collective marketing, promotion of crop diversification, improved extension service, credit access through linkages to microfinance, communication and market linkages positively influence farmers' income4. 

Malawi national policies started reflecting the perceived important role of farmer organizations as early as 19465. Malawi Poverty Reduction Strategy Paper (2002) places a very strong emphasis on promotion of farmer associations to facilitate farmer access to inputs, credit, output markets, market research, and technical training and to improve coordination within the smallholder sector6. One of the largest farmers’ organizations in Malawi is the National Association of Smallholder Farmers’ Associations of Malawi (NASFAM) which was formally incorporated in 19986. With the passing of time, however, government policy changed in favour of cooperatives. The history of FOs in Malawi can be traced to the first cooperative which was established in 19476. Many of the FOs continue to function as farmer-run cooperatives which have evolved to take on new responsibilities such as extension and provision of inputs to their members3. In the case of Malawi, FOs are also increasingly serving as key partners to the private sector, particularly in the production of high-value horticultural and commodity crops3. The Malawi Growth and Development Strategies (MGDS II) (2011) have also highlighted the formation of cooperatives as key strategies in the three agricultural subsectors, namely agricultural productivity and diversification, agro-processing and greenbelt irrigation7. According to Kingsley Makiyoni, a cooperatives development and marketing coordinator of the Cooperative Development Foundation of Canada, Malawi had 548 registered agricultural cooperatives as of 2017. A good number of cooperatives also remain unregistered. 

However, as cooperatives become dominant type of farmer organisations, their ability to support commercialisation of smallholder agriculture is still not clear. Hence at AfriCan Explorations, we dedicated the months of June and July 2020 to dig deep into the reality of farmer organisations, starting with cooperatives, as part of feasibility study for the e3 achor farms model which we intend to foster for investing in partnerships with smallholder farmers. 




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1https://tradingeconomics.com/malawi/agricultural-land-percent-of-land-area-wb-data.html

2https://www.worldbank.org/en/country/malawi/overview

3AFRICRES. (2014) Strengthening Farmer Organisations in Africa: The Role of Service Providers. Africagrowth Institute. Position Paper No. 02/14, August, 2014

4Mango, N., Makate, C., Lundy, M., Siziba, S., Nyikahadzoi, K. and Fatunbi, A. O. (2017). Collective Market Participation for Improved Income among Smallholder Farming Households: A Case of Balaka Innovation Platform in Malawi. International Centre for Tropical Agriculture (CIAT)

5Mapila, M. A. T. J., Makwenda, B and Chitete, D (2010). "Elitism in the Farmer Organization Movement in Post-Colonial Malawi". Journal of Agricultural Extension and Rural Development Vol. 2(8), pp. 144-153, October 2010. Available online http://www.academicjournals.org/jaerd ISSN-2141-2170 ©2010 Academic Journals

6Maganga L. (2017). Performance Improvement in Complex Organizations: The Case of Smallholder Agricultural Cooperatives in Malawi. A thesis submitted in partial fulfillment of the requirements of The University of Bolton for the degree of Doctor of Philosophy June 2017

7GoM (2011). “Malawi Growth and Development Strategies 2011-2016)”



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