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As the global coordinator for WFP’s Purchase for Progress (P4P) pilot, I visited Malawi in July to review the challenges facing smallholder farmers and how P4P might build on progress made to date. These are a few of my observations.
Flying into Malawi, nestled between Africa's southernmost Great Lake and the lush hills of the Rift Valley, one can clearly see from the air the country's deforested hills and depleted soils. This combination presents daunting challenges for Malawi's farmers, most of whom rely on semi-subsistence rain-fed production to feed their families and earn a decent living.
One might say that the P4P pilot initiative in Malawi is experimenting with a two-track approach: one bottom-up by working directly with smallholder farmers' organizations and the other top-down by working through the Agricultural Commodity Exchange for Africa (ACE) to engage various stakeholders in using the commodity exchange as a marketing platform. A nascent Warehouse Receipt System (WRS), affiliated to ACE, provides guaranteed storage and quality control for buyers and sellers.
WFP offers a reliable market opportunity for farmers' organizations (FOs) and to small and medium traders who can supply high-quality staple commodities, particularly white maize and pulses. Through P4P, we work closely with numerous partners at different points along the value chain to improve the capacities of smallholder farmers. To date, P4P and partners have provided hands-on training to some 15,000 farmers who belong to participating farmers' organizations. The farmers have been trained in various skills including : organizational management and business planning; improved production and post-harvest handling; quality control; storage facility management; marketing; and conservation agriculture.
Continuous increase in purchases from smallholder farmers
WFP Malawi purchases almost 70 percent of its food locally. Since the inception of P4P in 2009, WFP has purchased almost 52,000 metric tons of commodities through ACE or directly from farmers' groups, putting an extra US$ 14 million directly into the pockets of the smallholder farmers and into the local economy. The food is used in WFP programmes in Malawi and neighbouring countries for activities such as school meals, food for assets, refugee rations and maternal child health programmes. Purchases from farmers' organizations continue to increase as more FOs meet WFP's quality standards, minimal contract sizes and strict delivery requirements.
Applying knowledge from P4P training to other markets During the visit, I met the members of Cheka FO in Ntchisi district. The FO had recently received a ‘Certificate of Graduation' as a result of their good performance in marketing to WFP and others. This means that they have graduated from a ‘direct purchase' modality (a negotiated contract), to a competitive procurement modality through the internet-based trading platform of ACE.
Matthews Kamphambe, the chairman of Cheka FO, told me that last year the FO sold maize to a large agro-dealer as well as to WFP.
"We got a good price, as we sold later in the season," he said.
He attributes this success to the training and experience he and his colleagues got over the past three years.
Cheka is now applying their improved knowledge of warehouse management and marketing to the other products that they aggregate.
"We offer our members the possibility of getting paid when they bring their commodities to the warehouse - or to wait to get paid a better price when we find a market," explained Matthews. Last season we didn't have any farmers asking for upfront payment because they now believe that it's better when we all sell together. And we always encourage our members to keep enough for their families before deciding to sell."
Optimism despite challenges As part of the ‘graduation strategy', WFP's P4P team in Malawi seeks to help farmers progress from semi-subsistence agriculture to become empowered market actors. As in all P4P pilot countries, many challenges remain, such as access to affordable financial services, poor roads and insufficient storage infrastructure.
Fortunately, many FOs in Malawi are steadily overcoming these obstacles through their own initiative, hard work and persistence. There is certainly enormous potential to strengthen WFP's partnerships with other organizations to support conservation agriculture, improve access to farm inputs and financial services, and to enhance further both production and market access.
Ken Davies, WFP's Purchase for Progress (P4P) Global Coordinator