What investment opportunity lies in agriculture in Malawi? Malawi, the 'Warm Heart of Africa', is best known for its friendly people and its lake, which covers 20 per cent of the country. A largely agricultural country, 84 per cent of Malawians live in rural areas where about 11 million are engaged in smallholder subsistence farming; but only one-third of the land is suitable for cultivation because of mountains, forests and rough pastures. Despite that, agriculture accounts for more than one-third of GDP and 90 per cent of exports.
Smallholder farmers contribute 75 per cent of food consumed and cultivate some 5.3 million hectares of arable land. Maize, cassava, sweet potatoes, rice, sorghum, groundnuts and pulses are important food crops. However, most farmers have less than a hectare on which to grow the bulk of their food which, in combination with declining soil fertility and limited access to credit and extension services, has seriously limited smallholder productivity.
To boost maize production and food security, the government has subsidized improved seed varieties and fertilizer since 2005, following several years of drought and chronic food shortages that left one-quarter of the population in need of food aid. The policy worked well, and successive years of bumper harvests have resulted in surplus maize production. However, the programme is not without controversy; some argue that with donors reducing support due to poor governance, the government cannot afford to continue subsidizing inputs at the expense of other national needs, including health and education.
Ranked 171st out of 187 countries on the 2011 UNDP Human Development Index, Malawi has one of the highest maternal mortality rates in the world, while 12 per cent of the working population is HIV-positive. Due to poverty and a shortage of adult labour resulting from migration and HIV/AIDS related deaths, Malawi has the highest number of child labourers in Africa. Green tobacco sickness, a type of nicotine poisoning, is not uncommon among Malawi's estimated 80,000 child tobacco workers.
Unsustainable practices
Malawi has high population growth, which is increasing the pressure on its natural resources. Many farmers have to cultivate on steep hillsides and other marginal lands, often with inadequate soil and water conservation. As more land is opened up to production, problems such as soil erosion and the resultant siltation of rivers and lakes are worsening, exacerbated by high levels of deforestation. According to the National Forestry programme, the demand for forestry products is double what is estimated to be sustainable, with wood-fired tobacco processing and charcoal production adding to the pressure on forests from agricultural expansion.
Fish has traditionally been the most affordable source of animal protein but between 1987 and 2007, the total supply of fish dropped 20 per cent while the population increased by 60 per cent, leading to a price increase of some 3.5-fold. A recent report, from the Ministry of Finance and Development, has blamed unsustainable fishing practices and climate change for the drop in production. In addition to restoring degraded environments for fish breeding and promoting integrated aquaculture-agriculture interventions, the report has highlighted the need for specialized training to create capacity for understanding the effects of climate change. Cage aquaculture that uses locally available materials, such as bamboo, has also been highlighted as a suitable venture for small scale farmers along the lakes.
Tobacco blues
Coffee, cotton, tea, sugar and tobacco are the principal cash crops. Tobacco alone is estimated to account for 60-70 per cent of the country's exports and takes up four per cent of farmland. But overproduction of burley tobacco, poor leaf quality and anti-smoking campaigns have caused market prices to drop, substantially reducing foreign exchange earnings since the late 1990s.
To tackle the problem of overproduction, the government has re-introduced a quota system to regulate production, increase quality and reduce supply. In order to find alternatives to tobacco as an export crop and protect Malawi's biodiversity, the European Union is supporting production of sugarcane and coffee while USAID is promoting honey production. The government has also been promoting cotton production and processing, setting aside US$10 million in 2011 to support the sector. It hopes for the establishment of new textile industries which can maximize potential foreign exchange earnings.Maximizing resources
To reduce farmers' dependence on rain-fed agriculture and vulnerability to drought, the Greenbelt initiative is working to irrigate 1 million hectares of land within 20km of the country's three lakes and 13 rivers. So far, shortage of fuel for water pumps has limited uptake, but there are plans for gravity-fed water projects in Mulanje, Blantyre and Phalombe. For other farmers, the initiative is encouraging them to group together, use organic manure, construct ridges to collect rain water, and adopt improved plant spacing.
Since 2006, the Malawi Growth and Development Strategy (MGDS) has been the overarching national development plan, in which agriculture and food security, irrigation and transport infrastructure are prioritized. Mechanization of agricultural production, value addition, fair international and internal trading and sustainable exploitation of natural resources are just some of the objectives of the Strategy. But with an estimated cost of US$9 billion to fully implement the MGDS, Malawi requires significant foreign assistance to execute its plans.
