Gwengwe hails Nasfam commercialization drive: Call it indigenous beacon of hope for agriculture value addition

Minister of Trade Sosten Gwengwe has hailed the NasfamCommercial – a subsidiary company of the  National Smallholder Farmers Association of Malawi (Nasfam) – for enhancing the promotion of value addition agenda, which the government is championining.

Gwengwe made the remarks on Thursday when he toured Nasfam Commercial’s processing facility in Kanengo industrial area in Lilongwe to appreciate how the initiative is contributing to the transformation of agriculture and the economy in line with Buy Malawi Strategy (BMS) and National Export Strategy (NES).

He was accompanied by his counterpart at Agriculture, Lobin Lowe.

Nasfam Commercial – created to address farmers’ challenge in accessing good and stable markets – has state of the art maize, rice and legumes processing facilities that result in market competitive products in what is regarded as one of the high quality value addition initiatives by an indigenous company.

In his remarks, Gwengwe commended Nasfam for what he described as great and transformational vision of the organization to not only uplift the economic wellbeing of the smallholder farmers, but also to drive the value addition and export agenda.

“Agriculture, being the backbone of this country, makes your institution even more strategic.  Malawi is well known for producing and consuming primary products. But you are an exception. For this, I am grateful and encourage you to do more,” he said.

“What is saddening is that most supermarkets that have mushroomed in the country are mostly stocking imported agriculture products including maize flour, fruits and vegetables. However, with what I have seen today, that Nasfam and others elsewhere are investing in commercial agriculture, there is hope for this nation that one day, we will stop importing these basic products,” added the minister.

Nasfam chief executive officer Dr Betty Chinyamunyamu said the processing facility has components such as maize flour processing and packaging, groundnuts cleaning and grading, groundnuts roasting, blanching and packaging, rice processing and packaging and commodity storage and warehousing.

Chinyamunyamu said the association buys produce from its 130,000 members who belong to the largest farmer organisation through “satisfactory” selling of their produce.

He said Nasfam Commercial’s annual trading volumes include rice 4000 metric tonnes (MT), soya and common beans 4700 MT, groundnuts 1800 MT, maize 1000 MT, sunflower 800 MT and chillies 100 MT.

“The company’s business plan follows a strategy of steady improvement and investment in processing capacity in order to access points higher up the value chain and secure better or more reliable returns–to diversity its income base to mitigate risks and ultimately to improve its ability to provide better and more stable returns to the farmer,” said Chinyamunyamu.

She disclosed that Nasfam plans to expand the company in order to grow its value addition and agroprocessing by, among other things, bringing in new products from soya beans, groundnuts, maize and sunflower.

However, Chinyamunyamu lamented that the major challenge hindering expansion and greater impact of Nasfam Commercial is access to trading financing.

“The company borrows around MK4 billion from commercial banks in the country at interest rates as high as 30 percent in order to buy produce from farmers. This, combined with generally tight margins, makes it very difficult for Nasfam Commercial to succeed at commodity trading or processing and marketing of branded products,” she said.

And responding to these concerns, Gwengwe assured Nasfam that the Tonse government will support the company’s efforts to fully serve the domestic market and also ensure that their products reach all the corners of the world through the different trade arrangements that Malawi has at bilateral, regional and multilateral levels.

“Through the Buy Malawi Strategy and many more initiatives being pursued by my Ministry, I will ensure that your products are given the visibility and that no import permits are issued for products that your company is able to produce and satisfy the market,” he said.

Gwengwe encouraged constant dialogue between Nasfam and his Ministry to deal with market access limitations that the organisation is  experiencing.

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