The Agriculture Development and Marketing Corporation (Admarc) on Monday signed a Memorandum of Understanding (MoU) with the Farmers Union of Malawi (Fum) aimed at ensuring that farmers have access to structured and profitable markets.
Among other things, the MoU mandates Fum to organise smallholder farmers through cooperatives and medium to large farmers to aggregate their produce for selling to Admarc.
On the other hand, the MoU commits Admarc to be buying produce from farmers at the recommended minimum price.
Fum Chief Executive Officer, Jacob Nyirongo, said for a long time farmers in Malawi have struggled to find markets for their produce.
This, according to Nyirongo, has given room to unscrupulous and profiteering vendors who have exploited farmers by among other things, buying at a lower than recommended price, using tampered measuring scales, shunning farmers from the remote areas, and even collecting produce from the farmers without making any payments at all.
Nyrongo said this market failure has greatly contributed to crumbling of the Malawi’s agricultural sector as production should be determined by markets.
He added that it is Fum’s position that functional agricultural markets will lead to improved profit margins for the farmers thereby incentivizing them to further invest in their respective agricultural value chains through, mechanisations, intensification and value addition.
“Statistics for this year alone are very worrisome. As I am here speaking, about 30,000 metric tons of the 45,000 metric tons of cotton produced in the previous season is still with the farmers because no ginner is willing to buy from them.
“Again, a recent study by IFPRI has indicated that more than 76 percent of maize farmers and 90 percent of soybean farmers have sold their produce at a price that is below the official minimum farm-gate prices.
“This follows another study that was conducted last year by the same institution that revealed that more than 92 percent of pigeon pea farmers sold their produce at a price that was below the official floor price. These examples provide just a tip of how farmers are struggling to access produce markets that are profitable and that can enable them commercialise and intensify their production,”Nyirongo said.
He observed that Fum believes the signing of the MoU with Admarc would significantly address some of the challenges that farmers have been facing when accessing produce markets.
“As farmers we can, therefore, not afford to see this agreement not bearing its intended fruits. Farmers have been waiting for this day and we are more than ready to comply with the stipulations of the MoU. From our previous engagements with Admarc, we have also noted strong commitment from Admarc to provide markets to the farmers.
“However, the major drawback has been delayed and inadequate funding from the government. It is for this reason that we would like to take this opportunity to plead with the government to ensure timely and adequate funding to Admarc so that this MoU bears its intended fruits,” Nyirongo said.
Admarc Chief Executive Officer, Felix Jumbe, said his organization is crucial in ensuring that growers have a ready market for their produce.
Jumbe observed that, once recapitalised, Admarc is expected to play its rightful role of making sure that farmers do not suffer the headache of hunting for markets for their produce.
The former Fum President said currently Admarc is seeking a K300 billion guarantee from government to revolutionalise its operations for the benefit of the local Malawian farmer.