Advertisement
Columns

Time for agribusiness, not mere agriculture

Advertisement

Most farmers in Malawi practise agriculture while only a few are into agribusiness. Agriculture is typically cultivation of crops or rearing of animals for subsistence purposes while agribusiness is farming for commercial purposes.

In agriculture, the motivation is to grow food and ensure that there is enough to cater for the home until the next growing season while in agribusiness, the incentive is the profit.

To make a profit, a farmer has to make sure that what they earn from selling his or her crops is way above what they invested to produce the same.

Advertisement

And to make more profit, the farmer has to produce more while minimising the cost of production. Efficiency in farming ensures that farmers are able to produce commercially.

Agribusiness becomes possible when farmers start adopting modern methods of farming such as increased use of machinery, use of certified seed, irrigation and others while ensuring that crops are sold through structured markets for maximum earnings from the crops.

Countries such as Israel and Egypt have been able to demonstrate how efficient production of crops can make a country’s agricultural sector a key driver of the economy.

Advertisement

For Malawi to start realising meaningful earnings and benefits from agriculture, there is a great need for most farmers in the country to graduate to commercial farming. It is commercial farming that can support not just farmers but also agro-processing and export.

Since Malawi’s agriculture continues to be dominated by smallholder farmers, it is increased adoption of agribusiness techniques by the small rural farmers across the country that can increase productivity in farming in the country.

The government, financial institutions, development partners and companies that depend on agricultural produce for their raw materials should start supporting farmers in the country to grow into agribusinesses.

Agribusiness will increase farm productivity, quality and quantity of crops as well as make value addition and international trading of our crops viable.

Malawi is currently unable to meet demand for some crops on the international market because of its inability to produce and supply large volumes of the commodities.

Demand for crops such as maize, rice, groundnuts, soya, pigeon peas, cowpeas, sunflower, sesame seed and others is just so high but Malawi is only able to produce small quantities of these crops, hence failing to access huge amounts of foreign exchange on the international markets.

Yet, the country is desperately in need foreign exchange inflows with our main foreign exchange earners, tobacco and donor aid, in troubled situations.

The problems Malawi is experiencing in tobacco and foreign aid should be a motivation for the country to start taking available alternative means of earning foreign exchange, such as agribusiness, seriously.

While sectors such as mining, tourism, manufacturing and energy are what Malawi would need to support the economy in the medium to long term, agriculture offers Malawi an immediate avenue for diversification of exports to complement tobacco.

But only when the government, financial institutions, development partners and agro-processing companies start working with farmers to help them go commercial would Malawi’s agriculture be able to provide adequate support to the country.

The government has a responsibility to enact appropriate policies and regulations to support commercial farming while providing extension services to farmers in the country.

The banks and other financial institutions should make available resources that will enable farmers to invest in the production of crops commercially. Development partners should come in with projects and programmes to help rural farmers grow into commercial farming while agro-processing companies can also support the realisation of commercial farming through industrial linkages and contract farming.

Industrial linkages and contract farming bring together farmers and buyers of their crops through production support in the form of financing, input supply and technical advice while guaranteeing markets and fair prices for the crops.

They offer many benefits to farmers, companies and the economy. Farmers benefit through production support, guaranteed markets and good prices for their crops, companies benefit through steady supply of raw materials produced to their specifications while the economy benefits through increased production, tax revenue and even foreign exchange earnings from exports.

Agribusiness is, therefore, the way to go for an economy like Malawi that will continue to depend on agriculture for its economic survival long into the foreseeable future.

Facebook Notice for EU! You need to login to view and post FB Comments!
Advertisement
Show More
Advertisement

Related Articles

Check Also

Close
Back to top button
Close

Adblock Detected

Please consider supporting us by disabling your ad blocker