Project Duration: December 2015–December 2020Budget: EUR 4 500 000Donor: Government of Flanders

Marketing capacity building project for smallholder farmers in Mzimba and Kasungu districts

Project purpose and objectives

The Marketing Capacity Building Project aims at reducing poverty through market-orientedagricultural production. The project’s main goal is to strengthen the capacity of the decentralizedinstitutions of the Ministry of Agriculture, Irrigation and Water Development (MoAIWD) tosupport smallholder market-oriented agricultural production. The specific objectives of theproject are:

• Increased number of smallholder farmers organized in formal groups and producing for themarket.

• Demand driven and integrated extension delivery system on market-oriented agriculturalproduction rolled out in the two districts.

• Lessons on smallholder market-oriented production mainstreamed in future agriculturalextension strategies and policies of MoAIWD.

Geographical scope, beneficiaries and key project partners

Covering a total of 16 extension planning areas (EPAs) in Kasungu and Mzimba districts, theproject provides tailored skills development and mentoring to 1 000 farmer groups (30 000farming households) through Farmer Field/Business Schools (FFSs/FBSs) for improved, increased,diversified and sustainable production. The project’s key partners are the Ministry of AgricultureIrrigation and Water Development (MoAIWD), District Assemblies, Farmers Union of Malawi(FUM) and National Association of Smallholder Farmers in Malawi (NASFAM).

Project highlights

• Increased number of farmers in formal groups and producing for the market: In total, thereare 991 community outreach groups, Farmer Field Schools (FFSs), with 26 637 beneficiaries.

• Strengthened lead farmer strategy through the training and deployment of 25 MasterTrainers and 487 Community Based Facilitators under the district extension services system.

• Increased adoption of technologies to 75 percent: Various good practices have been adoptedleading to remarkable increase in productivity and production across various enterprises. Forinstance, adoption of use of inoculum, average yield of soya has increased from 600 kg/ha(2016) to 1 314 kg/ha in 2019.

Figure 1:Farmer participation in farmer field schools Figure 2: Commercial Enterprises in 2019, (N=1 146)

26 637

9 340

5 277

12 020

7 054

3 4091 557

3 9073 147

25 000

20 000

15 000

10 000

5 000

30 000

Source: FAO, 2019Source: FAO, 2019

• Establishment of nucleus aggregation centers for collective marketing: The produceaggregation centers have increased from 23 in 2017 to 69 in 2018 and to 87 in 2019.

• Improved collective produce sales of various crop enterprises from 2016 to 2019: Forinstance, soya sales increased from 6 metric tons (MT) baseline to 1 811 MT in 2019; beansfrom 1 MT to 92 MT; and maize from 6 MT to 170 MT in 2019.

• Improved overall value of income for farmers: The value of soya bean increased fromMK 804 921 (baseline) to MK 507 million (EUR 619 288) in 2019; beans from MK 314 368(EUR 384) baseline to MK 58 million (EUR 70 845) in 2019; and maize from MK 430 178(EUR 525) baseline, to MK 32 million (EUR 39 087) in 2019.

Table 1: Collective bulking and marketing in 2019

Figure 3: Commodity sales under collective marketing

Enterprise

2017 2018 2019

No. of bulking points

Metric tons bulked

Price (MK/Kg)

Total revenue (million MK)

No. of bulking points

Metric Tons bulked

Price (MK/kg)

Total revenue (million MK)

No. of bulking points

Metric Tons bulked

Price (MK/kg)

Total revenue (million MK)

Soya bean 20 921 180 167 56 1 295 270 350 65 1 811 280 507

Beans 1 77 450 35 1 89 522 46 5 92 624 58

Peas 1 3 591 2 1 0 0 0 0 0 0 0

G/nuts 1 17 350 6 1 10 380 4 2 13 450 6

Maize 0 0 0 0 8 3 523 92 324 12 170 190 32

Sunflower 0 0 0 0 3 84 162 14 3 35 258 9

Total 23 1 018 209 69 5 000 737 87 1 291 612

0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000

Maize

Soya

Beans

G/nuts

Total Sales (MT)

2018/19 2017/18 2016/17

500 1 000 1 500 2 000 2 500 3 000 3 500 4 0000

Source: FAO, 2019

Source: FAO, 2019

• Village savings and loans (VSLs) have been successful and in high demand where 379 farmer organizations have VSLswith 13 747 beneficiaries (64 percent women). Cumulative savings have gradually grown over the years with a peak ofMK 107 179 427 (EUR 130 917) in 2018. The 2019 cycle so far has MK99 250 487 (EUR 121 232) as of July 2019 and isenvisaged to surpass last year’s savings.

Table 2: Participation of rural households in Village Savings and Loans (VSL) groups in Kasungu and Mzimba districts

• Farmer organizations linked to outlets for market information, such as Farm Radio Trust, Auction HoldingCommodity Exchange, Agriculture Commodity Exchange, and Rab Processors.

• Generation of evidence-based lessons through case study, farmer voices and success story documentation toinform policy as well as exchange of best practices through radio programs.

Figure 5. Savings and loan trends from 2017-2019

Figure 4. Comparative farm gate and break even prices for soya bean from two EPAs

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M A R C H A P R I L M A Y J U N E J U L Y A U G U S T

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MP BEP (FP) BEP (AR)

YearOutreach groupswith VSLs

Membership Amount in loan circulation (MK)

Savingsaccumulated todate (MK)Male Female Total

2017 187 2 469 4 034 6 503 65 417 581 85 092 745

2018 278 2 629 6 034 8 663 87 185 464 107 179 427

2019 379 5 011 8 736 13 747 89 518 330 99 250 487

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*MP= Market PriceBEP (AR) = Breakeven Price under Agriculture Recommendation BEP (FP) =Breakeven Price under Farmer Practice

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Source: FAO, 2019

Source: FAO, 2019

Source: FAO, 2019Source: FAO, 2019

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Ministry of Agriculture, Irrigation and Water

Development