Commentators have reiterated the need to commercialise and industrialise agriculture and establish cooperatives in the sector so as to revamp the economy in the short to medium terms.
This follows revelations that the sector continues to lose its grip on contributing to the country’s gross domestic products (GDP) basket.
An Annual Economic Report published by the Ministry of Finance, on its website, indicates that the sector has been consistent in contributing to the economy, averaging 22.5 percent since 2018.
It holds that the sector contributed 22.0 percent in 2018, 22.1 percent in 2019, 22.8 percent in 2020 and is expected to contribute 23.2 in 2021 and grow to 23.4 percent in 2022.
However, the trend is a significant drop in the sector’s contribution to GDP when compared to the 29.6 percent recorded in 2010.
Agriculturalist Leonard Chimwaza said the development stems from lack of aggressiveness to transform the sector into a vibrant business by both the government and citizens.
He said agriculture should be commercialised, industrialised, with a focus on cooperatives rather than individuals who operate on subsistence basis.
“If farmers can focus on forming cooperatives, they would have the muscle of all factors of production, especially on capital, and they will be able to buy machinery that will increase production,”Chimwaza said.
Economist Betchani Tcherani concurred with Chimwaza, saying the right path is diverting from smallholder farming and adding value to agriculture products.
“We should not depend on smallholder farmers because they do farming for food purposes,” Tchereni said.
In its recent communication on how the country can utilise agriculture, the Economics Association of Malawi (Ecama) said stakeholders, including government, should adhere to due diligence laws, complement tobacco as the main cash crop and address fiscal policies, among others, if the economy is to grow from the industry.
The body added that commercial agriculture is affected by high energy costs, high corporate taxes for commercial agriculture companies, land encroachment, illegal mining, limited value addition and deteriorating soil nutrition.
Ministry of Agriculture spokesperson Graciun Lungu said the ministry will revamp the agriculture sector through structured markets and entities such as Agriculture Commercialisation (Agcom).
“We are working on having a structured market for every commodity so that proceeds are accounted for and we are empowering cooperatives through grants under Agcom, which we believe will turn around the sector,” Lungu said.
Recently, the country launched a long-term development plan dubbed Malawi 2063, which holds that Malawi should become a vibrant knowledge-based economy with a strong and competitive manufacturing industry that is driven by a productive and commercially vibrant agriculture and mining sector.
The plan notes that the development dream is anchored on three key pillars, namely: agriculture productivity and commercialisation, industrialisation and urbanisation.
Justin Mkweu is a fast growing reporter who currently works with Times Group on the business desk.
He is however flexible as he also writes about current affairs and national issues.