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Progress Toward Sustainability via Agribusiness in Malawi

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In 2011, the Millennium Villages Project (MVP) began to accelerate its business development activities as part of a project-wide push to enable communities to become self-sufficient by 2015. The establishment of rural cooperatives is the driver behind this strategy, facilitating agricultural production, sales and increased incomes. The community can then reinvest the increased agricultural income to maintain progress in other areas, such as education and health. The cooperatives are designed to help member farmers transition from subsistence to commercialized agriculture.

Community support for the cooperatives is key to their long-term success, and the success of the MVP itself. The MVP team has been working closely with villagers to build cooperatives from the ground up, and the Millennium Village of Mwandama in Malawi is leading the way.

Following MVP agricultural interventions starting in 2005, Mwandama’s farmers quadrupled their harvest of staple crops, generating a surplus in one of the most food-insecure areas of the country. Without cooperatives, converting these gains into sustainable incomes proved difficult for individual farmers.

“The major challenge in Mwandama before cooperatives were established was marketing,” Mwandama Cooperatives Coordinator Roderick Chirambo explained. “As farmers harvest, traders flock into the rural areas and offer to buy crops from farmers at unreasonable prices, and oftentimes use unfair weights and measures that have been deliberately tampered with. Since farmers operate independently and are desperate for cash, they have no choice but to sell.”

In response, the MVP team began meeting with local farmers, as a first step to setting up the Mwandama Association of Primary Cooperatives – the umbrella body for all the area’s fledgling commercial ventures. Following initial skepticism, tangible results began to appear.

One challenge was to convince farmers to take ownership of the cooperatives and adopt a commercial approach. Many were initially reluctant to forgo MVP grants of farm inputs in favor of the new, credit-based system. To overcome this, MVP sought buy-in from community leaders. The headmen of Mwandama’s seven villages were given the opportunity to ask questions about what cooperatives can do and to understand the roles of different stakeholders. They now fully support the idea of an enterprise whose owners, customers, and beneficiaries will be the smallholder farmers themselves.

Mwandama already has a Grain Bank run by the MVP, which farmers have been using successfully to store surplus produce, a portion of which is contributed in return for inputs like fertilizer. Although the cooperative will work closely with the Grain Bank, there are fundamental differences between the two institutions, and the community’s understanding of this point has been key to their buy-in. Where the Grain Bank remains a food security vehicle, the cooperative will organize farmers into a legal entity independent of the MVP, allowing them to manage and sell surplus produce in a commercially viable way. Beyond 2015, the cooperative aims to sustain the benefits of MVP interventions, but continuing development progress will depend on the farmers themselves.

Following a series of community meetings, farmers grouped themselves into clubs, which will form the grass-root foundation of the association. Inevitably, there was some resistance from farmers who saw no immediate tangible gains in joining. However, membership has since ballooned. The cooperatives now contain thousands of members, and over 100 clubs have been registered. The MVP has assessed these, and provided technical advice in group formation, leadership and management.

The next step was to set up a primary cooperative in each locality, based on the most profitable commodity produced. Each village elected an interim management committee to oversee member recruitment, legal registration, and setting up of financial management processes and other developmental functions.

The first major activity to be carried out by the cooperatives will be the marketing of farm produce like maize, pigeon peas, soybeans, and peanuts. They will assist member farmers to identify more lucrative markets, and sell at better prices than those offered by informal traders.

“Previously, farmers had to accept whatever unfavorable prices offered to them,” Chirambo explained, “but now they can be more demanding by selling collectively and accessing bigger markets beyond their village.” The next big hurdle will be the amalgamation of all primary cooperatives into the Mwandama Association of Primary Cooperatives – a dream that is finally becoming reality. The union will undertake vital functions common to all cooperatives. For example, it will employ technical staff to offer guidance to all cooperatives and coordinate major bulk sales to maximize strength at market.

The people of Mwandama understand the massive potential for sustainable economic development inherent in cooperative business and the future of sustainable agribusiness in Mwandama looks promising.

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