Malawi receives K93bn investment from IFAD to commercialize small-scale farming

At least 300 000 highly vulnerable Malawian families will benefit from a new K94 billion (US$125.4 million) programme that aims at increasing productivity among small-scale farmers and strengthen their access to profitable markets.

This follows a financing agreement for the Transforming Agriculture through Diversification and Entrepreneurship Programme (TRADE) signed between Government of Malawi and the International Fund for Agricultural Development (IFAD) on Friday in Rome, Italy.

Minister of Finance, Economic Planning and Development, Joseph Mwanamvekha signed on behalf of Malawi government  while IFAD was represented by its President Gilbert F. Houngbo and Regional Director for East and Southern Africa Division Sara Mbago-Bhunu.

Mwanamvekha in an interview with Nyasa Times from Rome, said  “the new investement is timely” as it will boost Malawi’s economy.

Agriculture is the backbone of Malawi’s economy. It accounts for 30 per cent of GDP and 80 per cent of foreign earnings, and it employs more than three quarters of the active population.

However, half of all farmers cultivate less than one hectare, making it hard for them to produce a surplus for market. This is compounded by the impacts of climate change, which contribute to the slow rate of poverty reduction.

TRADE will help Malawi achieve the United Nations Sustainable Development Goals (SDGs) and contribute to improving the livelihoods of rural people.

It will also help develop value chains for seven commodities – groundnuts, soybean, sunflower, Irish potato, diary, beef and honey.

The project justification comes at the back of survey-based insights about how unproductive Malawian small-scale farmers have become over the years in the absence of new farming methods and persistence of climate change effects.

It is estimated that half of all farmers cultivate less than one hectare, making it hard for them to produce a surplus for market.

“This new programme for Malawi will consolidate and scale up the success and good practices of the completed Rural Livelihoods and Economic Enhancement Programme,” said Ambrosio Barros, Country Director for Malawi.

“It will focus on the commercialization of smallholder agriculture through strengthened access to markets and financial services, while also focusing on adaptation to climate change, which is key for poverty reduction.”

The programme will strengthen the capacity of smallholder farmers, organize them into producers’ organizations and promote partnerships with small and medium enterprises. It will also develop roads and other rural infrastructure.

At least 55 percent of vulnerable women and 50 per cent of young people in the 11 districts covered by TRADE will benefit from programme activities.

Since 1981, IFAD has invested more than $336 million in 14 rural development programmes and projects in Malawi worth a total of almost $638 million. These interventions have directly benefited more than 2 million rural families.

Mwanamvekha was accompanied by Minister of Local Government and Rural Devepolment, Ben Malunga Phiri.

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