MSIKA Impact Report

MSIKA IMPACT REPORT USDA Food for Progress 2016-2021

MSIKA FORGES NEW OPPORTUNITIES IN HORTICULTURE

TABLE OF CONTENTS Context 3

In Malawi’s largely agrarian economy, agriculture is

market. At the micro level, the emphasis on horticul-

the source of income for 85 percent of its population.

ture was driven by the fact that growing horticultural

Most Malawian farmers are smallholders who tend

products — which fetch higher prices than commod-

Land O’Lakes Venture37 4-5

plots as small as a tenth of a hectare. Poor infrastruc-

ities — was the best opportunity for smallholder

ture limited arable land, and reliance on traditional

farmers to maximize value from their plots, increase

practices make generating more than a subsistence

their livelihoods, and move from subsistence farming

income challenging.

to farming as a business.

Increasing Agricultural Production 6-9 Expanding Trade of Agricultural Products 10-13 Reflections and Recommendations 14-15

To address these challenges, the U.S. Department

At the outset of the project, Malawi’s horticulture

of Agriculture (USDA) launched the $12.1 million

sector was small and disorganized. In an agriculture

Malawi Strengthening Inclusive Markets for Agriculture

sector dominated by cash crops, the few farmers and

(MSIKA) project, a Food for Progress initiative imple-

processors working in horticulture faced significant

mented by Land O’Lakes Venture37 from 2016 to 2021.

challenges, including the high cost of and low access to

The project focused on facilitating increased incomes

inputs such as improved seeds, poor and in some cases

and improved livelihoods for actors up and down the

declining soil fertility, lack of irrigation or appropriate

value chain in Malawi’s fruits and vegetable sector

storage facilities, little private or government extension

through a two-pronged approach:

services, and tenuous linkages to unstable markets.

•

Increasing agricultural productivity in the fruit

As result, crop yields per hectare and quality stan-

and vegetable sector by expanding the availabil-

dards were low — so much so that most supermarkets

ity of improved inputs, improving infrastructure

preferred importing horticultural products from South

to support on-farm production, and training

Africa, Tanzania, and Zimbabwe, rather than buy locally

farmers on improved agricultural techniques and

grown products.

technologies.

•

As one of the first donor program in the horticulture

Expanding trade of agricultural products in the

sector in Malawi, MSIKA pioneered enterprise devel-

fruit and vegetable sector by training produc-

opment and a structured trading system for horti-

ers and processors on improved post-produc-

cultural products in Malawi. Over the course of four

tion processes, facilitating improved linkages

years, MSIKA has laid the foundation for a burgeoning

between buyers and sellers, and improving

horticulture sector that is now attracting investment

market and trade infrastructure.

from international donors and Malawi businesses alike.

The project’s name — “msika” is the Chichewa word

In addition to the project’s impressive achievements,

for “market” — reflects its mission to strengthen

listed throughout this report, these future investments

markets for Malawian products while working to

are part of MSIKA’s legacy, thanks to its demonstration

increase production. Unlike previous agricultural

of what is possible in Malawi’s horticulture sector.

development projects in Malawi, which largely focused on commodities such as soybeans, groundnuts, or maize, MSIKA charted a new course by focusing on horticultural products — primarily, tomato, onion, mango, and Irish potatoes — in five targeted districts: Mangochi, Ntcheu, Dedza, Lilongwe, Mchinji. The focus on horticulture was stimulated at the macro level by the Malawian government’s desire to diversify ag production away from tobacco. Although it is the country’s largest cash crop, tobacco faces a shrinking global

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3 L A N D LOA’ N L ADKOE'SL AVKEENST,UI N RC E .37

USAID MALAWI BUSINESS DAIRY DEVELOPMENT PROGRAM (MDDP)

Land O’Lakes Venture37 and our history in Malawi Venture37 is a 501(c)(3) nonprofit helping communities around the world build economies by strengthening local agriculture, helping agribusinesses create jobs and linking farmers to markets. Since 1981, it has implemented over 315 integrated dairy, livestock, and crop development programs in nearly 80 countries.

Our long-standing affiliation with Land O’Lakes, Inc.—one of America’s largest farmer-owned cooperatives, with nearly 100 years of expertise in dairy, animal nutrition, crop inputs and agricultural insights and technologies—sets it apart.

Land O’Lakes, Inc. supports Venture37 projects as part of its enterprise purpose of ‘Feeding Human Progress’ at home and around the world.

We’ve spent over two decades in Malawi, working with rural households to improve incomes and nutrition outcomes, while enhancing the competitiveness of local agribusinesses. We have built and maintained trusted partnerships and understand local context.

CENTRE FOR AGRICULTURAL TRANSFORMATION (CAT) From 2019 to 2024, we are leveraging our core partners’ scientific, technological and agribusiness expertise and deep regional connections to forge integrated research-to-impact pathways that reduce productivity gaps between men and women and foster diversified, resilient and healthy smallholder households, particularly those transitioning from tobacco farming to alternative livelihoods. The CAT project’s goal is to increase commercialization and distribution of inclusive demand and data-driven technologies, innovations, and research in non-tobacco value chain.

USAID COOPERATIVE DEVELOPMENT PROJECT (CD4)

From 1999 to 2006, this program boosted rural incomes by increasing the number of rural poor households deriving their main livelihood from dairy. By 2006, members of the program’s eight milk bulking groups grew their herds from 400 improved breed cows to a total of 6,674 cows by scaling up artificial insemination efforts and instituting a pass-on scheme. As a result of the year-round income facilitated by dairy, project farmers’ household incomes increased by $606 per year.

USDA Malawi Dairy Development Alliance (MDDA)

USDA FOOD FOR PROGRESS FY2011

From 2007 to 2012, supported 14,000 farmers in 23 milk bulking groups through which farmers accessed credit, inputs and markets across the dairy value chain. Worked with 14 private sector providers to improve product offerings to meet the productivity-enhancing needs of smallholder farmers. Facilitated the creation of the country’s first livestock insurance product.

Concurrently, General Mills Foundation provided funding in 2007-2008 so V37 could serve porridge fortified with smallholder farmers’ milk to 2,900 primary schoolchildren, including HIV-affected orphans and vulnerable children, increasing school enrollment by 21%.

From 2011 to 2016, this project improved production and profitability for rice, cassava, poultry and goat farmers in the lakeshore districts of Salima and Nkhotakota, and assisted 68,091 smallholder farmers, entrepreneurs and private sector partners in the rice, cassava, and livestock value chains.

Efforts focused on increasing production by adopting improved, profitable technologies and sound agronomic or production practices. Additionally, we provided nutrition education to 15,022 caregivers (exceeding the target of 10,000) to promote dietary diversity, safe hygiene and good nutrition, while also linking farming families to nutrition services available within their communities. We facilitated market linkages and provided business planning and organizational governance trainings to 205 producer groups, slightly exceeding the target of 200.

Increased the effectiveness and sustainability of private sector and government support service providers. Additionally, we engaged financial service providers to increase agricultural credit products, and other services for smallholder farmers.

USAID OFDA LIVESTOCK FOR RESILIENCE (L4R) From 2014 to 2016, L4R enhanced resilience of 30,000 vulnerable individuals in Central Malawi through improved production and management of chickens and goats, scaling up of vet services, and increased savings and financial literacy among project participants.

From 2018 to 2023, CD4 will strengthen the enabling environment for cooperative organizations through tailored technical assistance to apex organizations and by transitioning the established cooperative learning platform to local ownership. In collaboration with these apex organizations, we will also provide technical support to primary cooperatives to strengthen their business performance and self-reliance. Finally, we will respond to a locally-defined learning agenda to drive local and international research on the Rwandan and Malawian cooperative sectors. We will disseminate the learnings locally and internationally through a large network of cooperative development organizations.

The impact of CD4 is bolstered by combining our nearly 40 years of international agriculture development knowledge with the extensive cooperative development experience of our affiliate, Land O’Lakes, Inc., a $15 billion U.S.-based cooperative.

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MSIKA 2019 AIMPACT N N U A L RREPORT E P O RT

LAND O'LAKES, INC.

MSIKA ACTIVITIES & IMPACT The MSIKA project worked to stimulate both supply of and demand for high-quality horticultural products in five districts in central and southern Malawi, working with a range of stakeholders to achieve its goal of increasing livelihoods through agriculture. Despite the impacts of a major cyclone, the COVID-19 pandemic, and lower-than-expected monetization proceeds to operationalize the program, the project demonstrated that horticulture can be a profitable option for farmers and processors and has generated new interest and investments in the sector.

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ORGANIZING FARMERS TO SUCCEED Farmer-based organizations (FBOs) play a critical role in helping smallholder farmers work together to grow, harvest, store, transport, and sell their products. By working together, smallholders can achieve common goals — such as supplying their products to a supermarket chain or qualifying for a loan —that would be impossible for any single small farmer to achieve. For this reason, working through FBOs was central to MSIKA’s approach to increasing production.

Although MSIKA partnered with some pre-existing groups, due to the nascent state of the horticulture sector at MSIKA’s outset, the project itself established the majority of the FBOs with which it worked. Over the life of the project, MSIKA worked with 217 FBOs; of these, 167 were established by MSIKA, and 50 were pre-existing. Each FBO had from 75 to 300 members, all living within 5 km to 8 km of one another to facilitate meetings and collective activity.

FBOs provided an efficient way for MSIKA to reach many farmers. This was due to a trainer-of-trainers approach that allowed MSIKA to train a small cohort of value chain actors who in turn passed, or “cascaded,” the training to others. In each of its FBOs, MSIKA identified “lead farmers” as critical conduits between the project and farming communities. Usually, these lead farmers were literate and numerate, had larger landholdings, and were seen as leaders in their communities. The project trained 750 lead farmers, who played an important role in mento-

ring less experienced FBO members through training and hands-on demonstrations of improved farming techniques. Through its investment in lead farmers, MSIKA has ensured that a knowledgeable resource is embedded in each of the farming communities with which it worked.

To monitor its efforts in building FBOs’ capacity to deliver services to their members, MSIKA drew on Venture37’s Performance Measurement and Management tool, which has been fine-tuned over decades of experience working with farmer cooperatives. The tool covers six performance areas: leadership; adaptive capacity; management capacity; operational capacity; supply, processing, and marketing; and productivity and financial performance. The project used the tool to assess FBOs’ capacity, then develop action plans to help FBOs improve their ability to serve their members.

Through the FBOs, the MSIKA project reached 39,744 farmers as direct beneficiaries, many of whom received multiple training programs. Fiftyfive percent of these farmers were women, while 43 percent were youths under 35. (Fifty-eight percent of youths were women.) The services farmers receive from collective action through FBOs — particularly access to finance, mentoring by more advanced farmers, and increased access to markets — will be key to motivating farmers to continue to work together through FBOs after the project’s closure, thus ensuring the sustainability of the project’s interventions.

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39,744 FARMERS REACHED THROUGH FBOs

55%

OF THEM WERE WOMEN

43%

OF THEM WERE YOUTHS UNDER 35.

Capacity Building in Improved Agricultural Production Techniques A robust training program was central to MSIKA’s sector development strategy and included training programs in agricultural production, marketing, post-harvest handling and storage, financial management, and FBO development. To improve production, MSIKA work collaborated with the Ministry of Agriculture, the Lilongwe University of Agriculture and Natural Resources (LUANAR), and Michigan State University to develop tailor-made farmer training materials. While all FBOs received training in basic crop-production practices, needs on the ground informed the delivery of other training programs. These included integrated soil fertility management (delivered to 62 percent of FBOs), integrated pest management (68.1 percent), climate smart agriculture (61.5 percent), and irrigation systems design and installation (31.9 percent).

The project’s training of trainers approach facilitated the wide rollout of training programs to FBOs. In addition to 750 lead farmers, the project also trained 267 government extension agents to provide training to FBO members. Through this cascade approach, 39,744 farmers received at least one training in good agriculture practices. Of those, 99.5 percent report that they had adopted at least one improved production practice or technology, while the mean number of new improved practices per beneficiary producer was 15.8.

To complement the coursework, the project established 85 farmer field schools where good agricultural practices were demonstrated, usually in the field of the lead farmer of an FBO. To ensure the techniques taught were applicable and appropriate, MSIKA adapted Land O’Lakes subsidiary WinField United’s “Answer Plot” methodology, establishing 35 demonstration plots where the project installed solar-powered drip irrigation systems and conducted adaptive research and studies, mainly focusing on soil health. Research findings — such as when to lime soil to increase PH balance — were further incorporated in the training materials for use by MSIKA and government extension staff.

To increase access to inputs, such as improved seeds, fertilizer, drip irrigation systems, and pest traps, MSIKA linked 80 agro-dealers to 12,500 MSIKA participating farmers through farmer field days and joint demonstrations for supply of authenticated farm inputs. Furthermore, the project’s efforts to increase access to finance (see below) helped farmers to receive loans, allowing them to purchase improved farm inputs. With access to high-quality inputs, farmers were able to apply the good agriculture practices learned in their training programs. With this combination of knowledge and access to inputs, farmers yields increased, on average, by 54 percent across the project’s value chains.

99.5%

OF FARMERS TRAINED ARE APPLYING AT LEAST ONE NEW TECHNOLOGY

54%

12,166

AVERAGE IMPROVED

HECTARES CULTIVAT-

YIELD FOLLOWING

ED USING IMPROVED

MSIKA TRAINING

TECHNOLOGIES

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CLIMATE SMART AGRICULTURE Smallholder farmers are particularly vulnerable to effects of climate change.

For this reason, the project trained farmers on climate smart ag practices — including intercropping, mulching, and contouring with Vetiver grass. As well, the project trained producers in waterscarce areas on efficient use of water irrigation systems to maximize efficient use of the precious resource.

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Supporting Enterprise Development

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MINIMIZING LOSSES THROUGH IMPROVED POST-HARVEST HANDLING AND STORAGE

Increasing yields is only part of the battle—many farmers are challenged to keep their crops undamaged in the critical period between harvest and delivery to markets. Good PHH practices are especially critical for horticultural products, which are highly perishable and more easily damaged than grains.

Although modern cold-storage facilities are beyond the means of most FBOs and smallholder farmers, there are low-tech and low-to-nocost practices that can be adopted to reduce losses. MSIKA trained farmers on these practices — such as harvesting in the coolest hours of the morning — as well as how to handle, grade, sort, and clean produce to reduce losses and increase their value. To complement the training and demonstrations, MSIKA developed posters and training materials suitable for farmers with lower literacy rates and developed a series of radio programs that provided technical advice throughout the production cycle, including harvesting, processing, storage, and marketing. Thanks to these interventions, the use of PHH practices increased across all supported value chains. For example, tomato producers’ use of the nine PHH practices taught ranged from 89.5 percent to 97.8 percent of farmers adopting a given practice. For the eight PHH practices taught to onion producers, uptake ranged from 73.5 percent to 87.1 percent.

In addition to improving PHH practices, the project also worked to increase storage capacity, which is critical to retaining product quality.

To demonstrate the potential for building low-cost storage facilities from local materials, the project procured 25 simple farm storage bins, which it distributed to 25 selected FBOs. The storage bins, which have a capacity of 20 cubic meters, continue to be replicated by individual farmers at the FBO level and replace the previous practice of storing produce at home. Farmers have clearly understood the need for improved storage: 37.1 percent said they had built or restored a storage building, room, or shed during the project. In addition, the project piloted the construction of an aggregation center for FBOs in Chiole, Mangochi district, where farmers identified a central location for aggregation of common commodities and received MSIKA support to construct and operationalize it. More than 3,000 farmers are expected to use the aggregation center, which will facilitate collective marketing to hotels and restaurants along Lake Malawi.

484,553M 3

Although the agro-processing industry plays an important role in Malawi’s economy, the sector remains largely underdeveloped, particularly for horticultural product processing. In 2017, only 0.2 percent of tomatoes, 0.03 percent of potatoes, 1 percent of chilis, and 13 percent of mangoes were processed in Malawi. Recognizing the sector’s potential for job creation — as well as serving as a market for the project’s farmer-producers — MSIKA offered training programs as well as customized, individual technical assistance to processors.

In Malawi, most small-scale fruit and vegetable processors learned to make their products from a close friend or family member. As there is limited vocational training in processing available, most processors had little knowledge of improved food processing technologies, processing equipment, and food safety and quality management. To address these deficiencies, MSIKA held trainings for interested processors in topics such as Good Manufacturing Practices (GMP), product development and marketing, and financial management. Many of the trainings, which reached 190 people, were organized in close collaboration with LUANAR’s Department of Food Science and Technology to allow the project to offer hands-on skills development using LUANAR’s laboratory and kitchen facilities.

In addition, the project identified 20 high-potential processors working in its value chains and offered individualized technical assistance to help them upgrade their operations. The cohort of selected businesses then underwent a business and quality assessment to determine capacity gaps. Technical assistance provided by the project included GMP, factory layout planning, business planning, and financial management, among others. Of critical importance for processing partners was assisting them to receive certification from the Malawi Bureau of Standards (MBS), which allowed them to sell their products through supermarkets. MSIKA assisted five processors to obtain full MBS certification and four processors to obtain MBS pre-certification. Through this assistance, 60 percent of the processors were able to increase their annual sales. Twelve processors sourced their raw materials from MSIKA producers, creating a new market for farmers.

In addition to working with small- and medium-scale processors, MSIKA worked with two large processors, Universal Industries and Harry Adamson Investments that planned to launch new food-processing facilities in 2020. Although work has slowed on both processing facilities due to COVID-19, MSIKA provided critical input, such as advising on plant design and equipment, the selection of appropriate crop varieties, and linking the processors to local farmers who can grow them. Once the facilities reach full production capacity, they are anticipated to result in $2.5 million in annual sales for local farmers and other value chain actors. More importantly, they will provide a model for how Malawian processers and farmers can work together for mutual benefit.

$2M+

PROCESSOR SALES FACILITATED

$2.98M INVESTMENTS

FACILITATED IN PROCESSING EQUIPMENT

INSTALLED STORAGE CAPACITY

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Achieving these sales was the result MSIKA’s multi-pronged approach that included marketing training, increased access to market information, promotional activities, and direct facilitation of sales.

Training was designed to help FBOs understand buyer requirements and how to negotiate with potential buyers. The project also developed leaflets and radio programs to increase farmers’ access market information — such as names and location of possible buyers, their requirements, and prices. Increased access to market information and effective marketing strategies helped farmers plan their production in accordance with the market demand and buyer requirements, thus facilitating sales come harvest time.

To link farmers directly to buyers, the project sponsored the participation of 13 exhibitors in total at four national agriculture fairs and two international trade fairs. In addition, the project facilitated eight business-to-business meetings to bring together buyers and sellers to discuss the potential collaboration. MSIKA also organized buyer visits to producers’ fields to allow buyers (including aggregators/ exporters, supermarket chains, processors, and others) to see the quality of production firsthand. These visits often led to the signing of sales agreements, in which farmers agreed to produce according to buyer specification (such as a specific variety), with buyers committing to acquire their products over a given time period (usually a year).

FBOs working with MSIKA reported strong increases in the volume of products sold over the life of the project. The volume of tomato sales increased an estimated 70 percent, followed by potatoes (28.8 percent), onion (21.1 percent), and mango (6.1 percent). As tomatoes are the most commonly grown crop among MSIKA FBOs, the large increase in volume of sales suggest widespread benefits to the project’s farmer partners. In total, the project estimates that people impacted have increased sales by over $18 million. More important, it has linked buyers and producers in fruitful relationships that will continue beyond the life of the project.

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FACILITATING BUYER-SELLER RELATIONSHIPS

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261

SALES AGREEMENTS FACILITATED BY MSIKA

$18.4M

INCREASED VALUE OF SALES FOR PROJECT PARTICIPANTS

62,963

METRIC TONS OF CROPS SOLD BY PROJECT-SUPPORTED FBOS

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Identifying and developing markets for Malawian horticultural products was a hallmark of MSIKA’s approach to improving farmer livelihoods. Just as organization through FBOs led to increased production, collective action through FBOs was critical to helping farmers to enter structured markets. By allowing farmers to achieve economies of scale, increase their bargaining power and work directly with buyers — something they were unable to do individually — MSIKA’s work with FBOs established commercially sustainable market linkages for collaborating FBOs and farmers. The result was the signature of 261 sales agreements that put Malawian horticultural produce on the shelves of supermarket chains such as SPAR, Shoprite, and the Sana Cash’n’Carry chain stores that previously imported from other countries. Other markets developed for MSIKA-affiliated FBOs include hotels, lodges, and restaurants on Lake Malawi; public universities; and large-scale aggregators and exporters in the domestic market. The project also facilitated exports of chili to buyers in South Africa and France.

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Building Government Capacity Support to Horticulture Sector

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BUILDING TIES TO FINANCIAL SECTOR Access to finance is critical to helping even the smallest of businesses to grow, but many farmers or small and medium enterprises (SMEs) in the ag sector are unable to find credit. MSIKA project has developed three successful lending programs that demonstrate the credit worthiness of horticulture value chain actors.

As a means of increasing commercial banks’ willingness to lend to the horticulture sector, Venture37 established a “special purpose vehicle” — a pool of funds designed to incentivize the development of financial products and services to the horticulture sector. In early 2019, MSIKA partnered with a local commercial bank, FDH Bank, to use the SPV funds to provide loans to SMEs in the horticulture sector. Under the SPV, Venture37 gave a low-interest $250,000 loan to FDH Bank, which on-lent the funds to Malawian businesses before repaying the loan with interest. Originally targeting input suppliers, processors, aggregators, traders, and processors, the FDH Bank program was expanded to 12 larger FBOs by the end of the project. Through the SPV, FDH Bank has administered 24 loans ranging from $498 to $57,718 for a total value of $192,501 with only one default.

MSIKA also emphasized small-scale solutions that served smallholder farmers and demonstrated their credit worthiness. To this end, the project trained its FBO partners how to establish village savings and loans (VSLs) in which farmers pool their savings and make group decisions on using those savings to make loans to other members. In total, MSIKA helped to establish 751 VSLs that made 5,444 loans with a total value of $74,780 and a 99 percent repayment rate. Loans ranged in value from 26 cents to $255.03, underscoring the importance of even small amounts of credit to smallholder farmers.

Building on its successes with VSLs, in 2018, MSIKA signed a partnership agreement with CUMO, a local microfinance institution. Through this partnership, MSIKA was able to increase FBOs’ access to finance, while CUMO gained a client base that already had received significant training in financial literacy, including how to manage and repay loans, through the VSL program. This training was critical to the success of the CUMO partnership, as demonstrated by the MFI’s experience in Malawi’s Mangochi District. Before the partnership with MSIKA, CUMO had ceased operations Mangochi district due to non-repayment of loans and was reluctant to work with farmers in the district. However, working with MSIKA FBOs, CUMO has achieved a 100 percent repayment rate in Mangochi, and the district leads in number and value of loans among MSIKA target districts.

During its two-year partnership with MSIKA, CUMO made 4,909 loans ranging in value from $6.70 to $671.14 to FBOs, achieving a 98 percent repayment rate. The total value of the loans was $427,136.

In total, 10,377 loans valued at $699,879 were disbursed with MSIKA efforts. Sixty percent of loan recipients were women, and 36 percent of the loans went to youths; 64 percent of youths receiving loans were women.

Thanks to MSIKA’s record of success, other financial institutions including both commercial banks and microfinance institutions are taking their first steps into expanding into the horticulture sector and have sought MSIKA advice and support on farmer outreach. This new willingness to engage the horticulture sector will have a lasting impact of the MSIKA project.

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$699,879 TOTAL VALUE OF LOANS DISBURSED WITH MSIKA ASSISTANCE

10,377

NUMBER OF LOANS DISBURSED AS A RESULT OF USDA ASSISTANCE

A supportive public sector framework is essential to private sector development. When MSIKA began implementation, the horticulture sector received little support from the government. Horticulture received limited attention in the government’s agriculture sector strategy and the Ministry of Agriculture, Irrigation, and Water Development’s Department of Horticulture had little capacity to support horticulture sector farmers.

To address these gaps, MSIKA worked along three tracks to increase government support to the sector and to help farmers and SMEs working within it to grow. First, MSIKA played a key role in the development of National Horticultural Policy with the ministry, working alongside private sector stakeholders, farmers, civil society organizations, and universities. The new sector policy, which was completed in 2019, is the result of a long consultative process that helped the government to determine priorities, assign resources, and set targets. Unfortunately, the year-long political stalemate following the 2019 elections has delayed its final approval, which is now anticipated to occur in 2021.

Second, the project worked to build the knowledge and capacity of government extension agents. MSIKA provided significant training to 267 extension staff to equip them to deliver the project’s training modules to FBOs. By integrating extension staff into its training of trainers program, the project not only built their capacity, but also ensured that government extension agents will be able to fill the gap and continue to provide technical assistance and support to farmers following the projects’ close. In addition, the project embedded two of its own staff in each district agricultural office, where they provided hands-on capacity building to extension agents and worked alongside them to support them in their roles.

Finally, the project dedicated significant effort to working with the Malawi Bureau of Standards to improve the enabling environment for producers and processing companies. Standards define the quality attributes of a product, and certification assures consumers that the products they are buying have met a quality threshold. The lack of standards for horticultural products at the project’s outset led many supermarket chains to import fresh and process fruits and vegetables, instead of purchasing local products. The slow certification

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process served as an additional barrier for processors. For this reason, the project worked with the bureau to define standards for 10 products, including dried chilies, jams and marmalades, fruit leathers, and tomato powder. The standards have been completed; once gazetted, they will enter into force. In addition, the project worked closely with the bureau to certify nine local processors, allowing them to enter formal markets.

MSIKA’s hands-on approach to working with the Government of Malawi has significantly built the government capacity to support the sector at all levels. Integration of government extension agents into the project’s training activities has greatly increased their ability to assist farmers, while the horticultural product standards will enhance domestic and international trade. Finally, the horticulture sector policy provides a road map for sector development for years to come.

276

9

STANDARDS FOR

NUMBER OF

PROCESSORS

HORTICULTURE

GOVERNMENT

RECEIVING MBS

PRODUCTS DEVELOPED

EXTENSION AGENTS

CERTIFICATION

TRAINED

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RECOMMENDATIONS

Take a private sector-led approach to extension.

ADAPTING TO CHANGE

While government extension agents have an undeniable role in training smallholder farmers, lead farmers, input suppliers and processors can also play a role and may be the most sustainable, effective, and efficient mechanism to reach producers.

In its four years of implementation, MSIKA was presented with numerous challenges that required the project adapt and, in some cases, reconfigure its operations to continue to support farmers and processors in the horticulture sector. In March 2019, Cyclone Idai hit the eastern coast of Africa, with widespread effects that reached as far as Malawi. Coming on top of a period of heavy rain, the cyclone had a negative impact on farmers yields, and affected demonstration and research field trials. As a result, the project trained farmers to mitigate such shocks through using efficient water use irrigation technologies and adopting staggered crop production.

The year-long political stalemate between the presidential elections in May 2019 and June 2020 also affected project implementation; in particular, all efforts to improve the enabling environment for agriculture with the Government of Malawi were effectively stalled. The project team continued to advocate the government to move forward and was ready when the new government was installed in 2020 to push its agenda to the forefront.

A shortfall in financial resources caused the project to be shortened from five years to four, resulting in the elimination of several planned activities. As a result, instead of ramping up activities in Year 4, the project’s final year was re-focused on putting in place measures to ensure sustainability and preparing for close-out. Although MSIKA was able to meet many of its projected five-year targets by the end of is fourth year, the reduced timeframe for implementation will reduce the project’s long-term impact.

This will be further exacerbated by the fact that the project’s final year was impacted by the COVID-19 pandemic, which made field visits and other day-to-day operations impossible. To keep activities moving forward, the MSIKA team looked for innovative ways to assist FBOs virtually on following through with sales agreements, identifying market opportunities, and delivering their produce. The project used cell phones and Bluetooth speakers to deliver its training programs and supported FBOs and farmers with enhanced internet access and additional airtime. MSIKA also encouraged lead farmers to move forward with demo plot trials and connected them to input suppliers to help strengthen linkages along target value chains and enhance the sustainability of agricultural production demonstration activities and adoption of improved farming practices.

Use intensive mentorship models for targeted FBOs.

LESSONS LEARNED

Not every FBO has the capacity to develop into a cooperative or to sell in structured markets. Future programs should select FBO

Start small and work up. MSIKA was a highly ambitious project, but the nascent state of the horticulture sector in Malawi required the project to reconfigure its approaches. Concentrating its efforts on fewer value chains than originally anticipated helped the project to generate momentum, as did shifting focus to small-scale solutions to increase access to finance. By continually adapting and rightsizing its activities, MSIKA was able to achieve lasting change.

Horticulture is investment-worthy. By working to build both demand and supply for fresh and processed horticultural products, MSIKA has helped to generate m ore than $18.4 million in sales and has created strong linkages among actors throughout the value chain. More important, it has attracted additional interest and investments from the government, private sector leaders, financial services providers, and international donors that will exponentially increase the project’s impact.

Empowering community leaders pays off. Using lead farmers as trainers and demonstrators paid dividends to the project and its partner FBOs. Allowing farmers to learn from one of their peers was a highly effective way to disseminate training. Similarly, integrating both medium-sized and smallholder farmers into FBOs led to improved outcomes. By empowering farmers to serve as leaders within their own communities, the project was able to amplify its results.

Developing markets takes time and effort. Facilitating producers’ entry into formal markets — which may have unfamiliar or unpredictable demands on quality, volumes, delivery, and packaging — is difficult, and progress can be elusive. Identifying FBOs and private sector partners that are willing to persevere despite setbacks is key to ensuring that sales agreements result in actual sales.

partners that meet key criteria for development — such as a mix of small and large farmers, accessible location, and commitment to collective action — and provide capacity building that moves beyond training to ensure adoption of best practices.

Not all producers are ready for structured markets.

Projects like MSIKA should seek to facilitate sales by FBOs only where there is a realistic capacity to supply, members are committed to collective selling, and there are accessible markets. Where

THE WAY

that is not possible, there is still merit in working to increase production for sale in less formal markets.

forward

Village saving and loans are critical to group cohesion.

For many of MSIKA’s FBO partners, VSLs are the glue that holds them together. Future projects should continue to support VSL activities, which provide easy access to finance and, over time, build trust and cohesion among group members.

Think local.

Using a multi-faceted approach to public sector capacity development is key.

Early in the project, industry stakeholders identified the lack of a sector-wide horticulture policy as a constraint to the development of the sector. MSIKA partnered with government representatives and private sector stakeholders in developing a draft policy which is currently pending formal government approval.

Knowing that national policy is vulnerable to time constraints and delays, MISKA also prioritized action on supporting measures such as training of government extension workers and assisting the Malawi Bureau of Standards in the development of standards and product certification procedures as part of a broader effort to build government capacity.

14 MSIKA IMPACT REPORT

Although international markets should not be overlooked, given the current situation in Malawi more focus should be placed on developing local markets. A continued focus on domestic markets and supporting farmers to meet market demands for quality and quantity on a consistent basis is required as Malawi also explores markets in the region and beyond. Local processors, both large and small, can be a valuable partner to create markets for smallholder farms and facilitate their transition to farming as a business.

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