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Structured agricultural markets key to Malawi’s economic growth

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Malawi today needs a broad-based, legally enforceable instruments to regulate all agricultural produce trade if economic growth is to be made from proceeds of farming.

The first decade of Malawi 2063 (MIP-1) aspirations is to move Malawi economy to lower middle income status by 2030. This growth will be propelled by industrialisation and urbanisation which will need raw materials from agriculture for manufacturing and exports.

Dr Myles Munroe of Bahamas Republic once recounted a biblical narrative; “It is impossible for an unjust system to produce just characteristics just as a bitter well would not give out sweet waters”. It follows therefore that a poorly-structured agricultural production system and consequent produce market would help deliver our aspirations.

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Agricultural produce marketing must therefore be formal, structured and heavily regulated to protect farmers that are vulnerable to exploitation by middle-men and exporters.

A market is an organised situation where buyers and sellers of goods and services interface to derive a monetary rate of commercial exchange popularly known as price. Technically, a market is not a physical place but a trade mechanism with standing principles that enable a transaction to materialise between willing buyers and sellers dictated by forces of supply and demand.

A structured market, unlike an ordinary market, is an organised and regulated interface trading situation between buyers and sellers of goods where excesses, rivalry and exploitation are preconceived and controlled by a framework of procedure, policy or law, etc. so that there is fair trade. Tobacco, tea and industrial or medicinal cannabis are some crops that have a structured market by law in Malawi.

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It is however disheartening that many other crops such as maize, rice, beans, pigeon peas, cow peas, soya beans, ground nuts, sunflower, cotton and sorghum are left out. This has given room for experienced multinational companies with vast exposure and bargaining leverage to trade with peasant farmers who have no relevant bargaining footing. Such mismatch is a recipe exploitation.

Dr Desmond Dudwa Phiri of the DD Phiri column one time asserted that “people who become too rich in a very poor country do that by sheer theft or exploitation of the poor”. Pigeon peas farmers are one such vulnerable group that for so long has been left to face it off with skilled multinational companies in Malawi. While pigeon peas companies have expanded warehouses and factories, hence flourished with exports of raw pigeon peas, farmers have not maximised their revenue and they remain poor.

Lack of a structured market and any continued delay to set up agricultural commodity auction market for farm produce is a total betrayal of an economy, the people and Agenda 2063. A structured market induces formality of trade transactions and avails statistical records of production output and generated income for tax and other purposes.

It also prompts fair or real competition, undercuts collusion together with powers of cartels and reduces transfer pricing, apart from centralising volumetric sales necessary for exports.

Now, where most of citizens still rely on agriculture as an economic means and the standing aspiration is to move the economy into a lower middle class by 2030, then it suits that improvement of per capita income through fair pricing of agricultural commodities grown by rural masses that constitute 80 percent of population would expedite realisation of the aspiration.

It is therefore incumbent upon government, other duty bearers and advocacy groups to help set up structured agricultural produce market so that there is maximisation of realisable value for farmers.

Government must go beyond ‘farm gate prices’ rhetoric that lacks strategic enforcement to centralise produce sales through an auction system. Ten agricultural commodities can be selected and 10 Admarc markets chosen to pilot the auction model in high producing areas across the country.

All and above everything else, a law must be enacted to direct sales of strategic agricultural produce year on year at auction markets and nowhere else.

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