As the global coordinator for WFP’s Purchase for Progress (P4P) pilot, I visited Malawi in early July to review the challenges facing smallholder farmers and how P4P might build on the progress to date. These are a few of my observations.
Flying into Malawi, nestled between the Lake and the lush hills of Africa’s Rift Valley, the deforested hills and depleted soils are visible from 2,000 metres. This presents daunting challenges for Malawi’s farmers, most of whom rely on semi-subsistence rainfed production to feed their families and earn a decent living.
One might say that the P4P pilot in Malawi is experimenting with a two track approach: one bottom up by working directly with smallholder farmers’ organizations, and the other top down through the Agricultural Commodity Exchange for Africa (ACE), working to engage various stakeholders to use the commodity exchange as a marketing platform. A nascent Warehouse Receipt System (WRS), affiliated to ACE, provides guaranteed storage and quality control for buyers and sellers.
Continuous increase in purchases from smallholder farmers
WFP offers a reliable market opportunity for farmers’ organizations (FOs) and small and medium traders who can supply high quality staple commodities, particularly white maize and pulses; and through P4P works closely with numerous partners at different points along the value chain to improve smallholder farmers’ capacities. To date, P4P and partners have provided hands-on training to some 15,000 farmers who belong to participating farmers’ organizations. The farmers have been trained in various topics including : organizational management and business planning; improved production and post-harvest handling; quality control; storage facility management; marketing; conservation agriculture; and other aspects of the value chain.
WFP Malawi purchases almost 70 percent of its food locally. Since the inception of P4P in 2009, WFP has purchased almost 52,000 metric tons of commodities through ACE or directly from farmers’ groups, putting US$ 14 million more directly into the pockets of the smallholder farmers and the local economy. The food is used in WFP programmes in Malawi and neighbouring countries for activities such as school meals, food for assets, refugee rations and maternal child health programmes. Purchases from farmers’ organizations continue to increase as more FOs achieve the capacity to meet WFP’s quality standards, minimal contract sizes, and relatively strict delivery requirements.
Applying knowledge from P4P training to other markets
During the visit, I met with the members of Cheka FO in Ntchisi district. The FO had recently received a “Certificate of Graduation” due to their good performance in marketing to WFP and others. This means that they have graduated from the “direct purchase” modality (a negotiated contract), to a competitive procurement modality through the internet-based trading platform of ACE.
Matthews Kamphambe, the chairman of Cheka FO, told me that last year the FO sold maize to a large agro-dealer as well as to WFP. He proudly told me that “we got a good price, as we sold later in the season”. He attributes this success to the training and experience over the past three years. Cheka is now applying their improved knowledge regarding warehouse management and marketing to the other products that they aggregate. “We offer our members the possibility of getting paid when they bring their commodities to the warehouse - or to wait to get paid a better price when we find a market. Last season we did not have any farmers asking for upfront payment, because they now believe that it is better when we all sell together. And we always encourage our members to keep enough for their families before deciding to sell.”
Optimism despite challenges
As part of the “graduation strategy”, WFP’s P4P team in Malawi seeks to help farmers progress from semi-subsistence agriculture to become empowered market actors. As in all P4P pilot countries, many challenges remain, such as access to affordable financial services, poor roads and insufficient storage infrastructure.
Fortunately, many FOs in Malawi are steadily overcoming these obstacles through their own initiative, hard work and persistence. There is certainly an enormous potential to strengthen WFP’s partnerships with other organizations to support conservation agriculture, improve access to farm inputs and financial services and to further enhance both production and market access.
Ken Davies, Purchase for Progress (P4P) Global Coordinator