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Unleashing full agricultural potential

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The Malawi Confederation of Chambers of Commerce and Industry (MCCCI) deserves a pat on the back for organising a very successfully 14th National Agriculture Fair from August 16 to 19 at the Chichiri Trade Fair grounds in Blantyre whose theme was “unleashing full agricultural potential, the role of markets”.

Could this be the beginning of a transformation of the agriculture sector whose growth has been volatile and frequently surpassed by population growth? Will the private sector heed the call by President Peter Mutharika to explore innovative ways of attracting investors including commercial banks to invest in the sector in Malawi?

Malawi’s economic performance and political success is almost always dependent on the performance of the agriculture sector since it accounts for about a third of gross domestic product and drives livelihoods for two thirds of the population. If Malawi is going to make strides towards the attainment of inclusive economic growth and development, the county needs to continue transforming the agriculture sector.

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The success of Malawi’s agriculture sector has the potential to increase Malawi’s per capita Gross National Income (GNI) of just $320 in 2016, one of the lowest in the world. While countries that are geographically and demographically similar to Malawi and were at a similar stage of development in 1994 have had GNI average growth rates of 2.8 percent, Malawi has been able to register an average of little more than 1.5 percent between 1995 and 2014.

It is, therefore, quite encouraging that the President has spoken on the role of the private sector and civil society organisations (CSOs) are playing in the sector when he said “the private sector and civil society organisations are doing a lot in growing the agriculture sector through their vast skills, good innovation skills and modern technologies. These are aspects that play a crucial role in boosting the economy of the country.”

The variety of products and technologies at the fair from both small-scale and large-scale farmers offer some hope for the future. The overreliance on factor accumulation as a source of growth in the sector is outdated. Factor accumulation is the growth that is dependent on increasing the factors of production like land and labour and not technological improvements. The successes of reliance on inputs such as land and labour are way past its sale by date.

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The effects of climate change and the dependence on rain-fed cultivation has made farming a high-risk business. In addition, the public institutions involved in agriculture have over the years been slowly dismantled. The once well-organised and well-oiled extension service of the Ministry of Agriculture is now so thin on the ground that the role it played has now been officially taken over by non-governmental organisations. Indeed, some of the past policy choices have only served to exacerbate price volatility and undermine incentives for investment in commercial agriculture.

In Malawi, unless deliberate efforts are made to address one of the basic reasons behind the downfall of agriculture industry, which is the implementation of traditional methods in this modern age, progress will be slow indeed. There is need to deal with the lack of access to latest technology and information which has kept rural Malawian farmers on the bottom of the value chain through suffering undue losses and damages.

If the call by the President will have materialised, then efforts to improve the enabling physical infrastructure, especially in rural Malawi is paramount. Physical infrastructure for roads, electricity, water and communication are critical to agricultural modernisation. Roads and particularly rural all-weather feeder roads and bridges are important. They reduce distances and time to wider markets for famers’ products and also facilitate access to production inputs in good time and reduce the related transactional costs as well.

This creates opportunities for competition, incentives for technological innovations, increased efficiency and improved quality of services. The resultant effects can include low costs of production, increased productivity and higher farm gate prices and increased profitability for the farming communities in Malawi.

Reliable energy in terms of electricity should be prioritised for the transformation of the agriculture sector in Malawi to be effective. Increasing access to electricity for farmers in rural areas of Malawi is critical as it enhances the ability of farmers to store, preserve and allow for processing of agricultural products into less bulky, long shelf-life and high value products.

Will the private sector finance water and irrigation infrastructure in response to the President’s call? Irrigation is critical to agricultural production particularly during periods of drought that have become more frequent over the last years. Access to water is also important for agro-processing and the creation of local-based agro processing factories that can be the catalyst for manufacturing in Malawi.

Will the private sector invest in communication infrastructure to increase access to information technologies and markets? Should the government get into strategic initiatives with the private sector to move in the creation of infrastructure for agricultural development? On the other hand, how prepared are our farmers to accept new technologies and how willing are our political leaders to support the efforts geared towards modernisation of agriculture in Malawi? The MCCCI, CSOs and the President seem to have taken the lead. Who else will join them?

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