Climate-smart agricultural practices increase maize yieldagri-malawi.com/wp-content/uploads/2020/06/apr_june2020.pdf · climate-smart agriculture (CSA) practices, the country is on

VOLUME 5 / ISSUE 2 MK1 800 / US $ 5.30 APRIL - JUNE 2020 AGRI-MALAWI MAGAZINE

All smiles for farmers in Malawi, Mozambique and Zambia 11

COVID-19 response must target African agriculture 13-14

Agriculture records high output in years 8

Climate-smart agricultural practices increase

maize yield

3 Agri-Malawi Magazine | www.agri-malawi.com

April - June 2020

No need to re-invent the wheelLet’s adapt to changing agriculture landscape Contents

Editorial Note

Let’s adapt to changing agriculture landscape : ................4

Cover Story

Climate-smart agricultural practices increase maize yield : ................5

News

Agriculture records high output in years : ................8Improved agriculture production attributed to NGOs : ................8COVID-19 highlights need to boost resilience of rural poor : ................9All smiles for farmers in Malawi, Mozambique and Zambia : ................11 FEWS NET records mixed harvest patterns : ................12Mwapata study to assess the potential effects of COVID -19 : ................12

Insight

COVID-19 response must target African agriculture : ................13-14

Business,Companies & Markets

Case IH tractors help generate power in Philippines : ................15Technologies have potential for agricultural transformation : ................18

Regional News

Agriculture the most important business in the world : ................19 Meatco concludes US export deal : ................19

Technology News

Japan adopt smart technology to streamline rice growing : ................21

Feature

ACE Warehouse Receipt Finance : ................16-17

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April - June 2020Editorial Note

Let’s adapt to changing agriculture landscape

Editor: Andrew Maramwidze

espitetherespiratorydisease ravagingeconomiesacrossthe worldinthenameofCOVID-19,itencouragingrealisingthatmaizeyieldinthecountryhassurged,thisyear.

It’sabigthumbsuptofarmersandotherstakeholdersplayingapositiveroletoim-provethecountry’sagriculture.

Theworld over food security is of greatconcern,nationwanttobeselfsufficientinfoodproductionbutseveralfactorsareaffectingsuchefforts.

These include the changing climatechange,urbanisationandrolloutofmech-anisedfarmingchangingthelandscape.With a 53 percent increase in maizeyields,attributedtofarmersimplementing

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climate-smartagriculture(CSA)practices,thecountry isonapositive track tobe-comingtheregion’sfoodbasket.

Obviously,asincreaseproduction,meansthecountrywillsoonbeselfsufficientandexport surplus into the region, where anumber of country are still grappling tofindperfectfixtochallengesoffoodpro-duction,especialmaize,astaplefoodinmostcountries.

It is also pleasing to note that farmersacross the country are exhibiting enthu-siasmtosharedwith themby thecoun-try’sinternationalpartners,showinggoodsigns of eliminating dependence syn-dromeandpickingupadoityourselfat-titude.

Our farmers are worthy celebrating andmore word should go out that climatechange leads to excessive weathershockswithextremedrynessorextremerain.Thereforeit is importantforfarmerstouseclimate-smartpracticestoabsorbexcessrainwaterandconserveit,soitisavailableintimesofdrought.

Kudosfarmerscontinuetomakeusproudandletusbeknownasafarmingnation,wecannotallowhungertopunchholesineffortstodevelopournation.

Remember to share your views, opinions, letters and comments on [email protected]

Enjoy the read!


April - June 2020

armersimplementingclimate- smartagriculture(CSA) practices have seen a 53 per-centincreaseinmaizeyields.

Thisisaccordingtorecentfindingspub-lished in the international journal: FoodPolicy by researchers evaluating the ef-fectivenessofamajorUSAIDprograminsouthernMalawi.

“Our research showed that farmers were able to maintain these practices. Their perceived benefits outweighed con-straints, to the extent that when we con-ducted the study two years after the US-AID project had ended, retention rates were high,”FestusAmaduofUScollege,Uof I’sDepartments ofAgricultural andConsumer Economics and Natural Re-sourcesandEnvironmentalSciences.

Amadu’s research focuseson theWALAproject’sCSAcomponent,whichaimedtoimprovefoodsecuritybyhelpingfarmersincrease their adoptionof environmentalconservationpracticesandrealizehigheryieldsofmaize,themaincropinMalawi.

The researchers surveyed more than800 smallholder farmer households insouthernMalawiandvisitedfieldstover-ifywhether farmersmaintained theCSApracticesovertime.

ThestudyincludedfarmersinWALAwa-tershedsaswellasfarmersincomparablewatershedswithoutWALACSAactivities.

Climate-smart agricultural practices increase maize yield

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Cover Story

“Climate change leads to excessiveweathershockswithextremedrynessorextremerain,”Amaduexplains.

“Farmerscanuseclimate-smartpracticestoabsorbexcessrainwaterandconserveitsoitisavailableintimesofdrought,”heemphasized.

CSApracticesincludetechnologiessuchasabsorptiontrenchesthatcapturerain-waterduringexcessrainfallandgraduallyletitseepitintothesoilorsaveitforirri-gationduringdryperiods.

“Agroupoffarmerscouldhavelargeab-sorptiontrenchesaroundtheirfarms.Thefarmscouldalsohavecontinuouscontourtrenchesandstonebounds,whichwouldslowexcessiverainwaterinmountainousorhillyareasandhelp,conservesoilnu-trients,”Amadusaid.

OtherCSApracticesincludeusingvetivergrass(alegumeplantthathelpssoilcon-servation),oragro-forestryfertilizertrees,where tree roots can reduce rain waterrun-off, and falling leaves can serve asfertilizer.

“These are not really rocket science technologies. They are just basic things that people have always done but they never really prioritized them,” Amadusaid

Hepointsoutsuchtechniquesrequirein-vestmentofland,labor,andfinancesthat

makeadoptionchallengingindevelopingcountries.

Amadu trained a team of 14 studentsfromMalawi’smainagriculturaluniversityto conduct the surveys, using comput-er-assisted personal interviewing (CAPI)technology. The students interviewedsmallholder farmers and their spousesin the project area, aswell as a controlgroupthatdidnotlearnaboutCSAinter-ventions.

Theresearchersidentifiedseveralfactorsthat increased CSA adoption rate, suchastheability tohirehelp,andaccesstoextensionservices.Theyalso foundthatplotsize,soilfertility,anduseoffertilizerhadapositiveeffectonyield.

Amadusaystheresultsindicateaidpro-grams work because they help farmersacquire knowledge and gain access toresources,while reducingbarriers to im-plementingtheCSAtechniques.

The researchers note the findings alsohave policy implications beyond the re-sultsoftheWALAproject.

“More generally, our findings on CSA adoption and maize yields suggest that aid-financed CSA can be effective in reducing food insecurity in contexts beyond Malawi, particularly those in re-source-poor, rural dryland areas where rain-fed agriculture predominates,” thepaperconcluded.


April - June 2020News

armersareanticipatingthehighestoutputofthestaple maizeinfiveyearsalonganincreaseinproduction commoditiessuchasmillet,pulsesandrice.

Theprojectedbumperharvesthasdrivendowncerealcommod-itiesprices,culminatinginvastpopulationsbecomingself-sus-tainableandhaltingdependenceonhumanitarianaid.

Preliminary crop estimates by the Ministry of Agriculture andFoodSecurityindicatethatthecountrywillproducemorethan3,691millionmetrictonnesofmaizeforthe2020/21consump-tionyear.

Theministryprojectsthatotherkeycereals-millet,pulsesandrice-areexpectedtoregisterincreasesof8to11percentabovelastyear’sproductionlevels.

MeanwhiletheTobaccoCommission(TC)estimatesthatabout151000tonnesofthegoldenleafwasproducedthisyear.

on-governmentalorganizations(NGOs)havebeen hailedforimprovingagriculturalproductioninChitipa District.

PrinceShaibu,ChitipaAgricultureExtensionMethodologyOffi-cerapplaudedtheNGOsattheagriculturestakeholders’panelquarterlyreviewmeeting,citingthefruitfulnetworkingrelation-shipwhich existwith theNGOs for improvedagricultural pro-duction.

“We work hand in hand on the planning and supervision of projects in relation to what the district wants to achieve,”saidShaibu.

He said the initiativehas improvedmanagementof pests anddiseases,seedmultiplicationskillsinfarmersandlivestockpro-ductioninthedistrict.

Agriculture Extension Development Coordinator (AEDC) forKamemeExtensionPlanningArea(EPA),PaulLuwesaidfarmers

Agriculture records high output in years

Improved agriculture production attributed to NGOs

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Thisrepresentsareductionfromlastyear’sproductionof165611tonnes,anda10percentdropfromthefive-yearaverage.

FEWS NET noted the declining production might eventually affect Malawi’s macro economy asthecashcrop is themainforeignexchangeearnerforMalawi.

The development comes at the backdrop of President Pe-terMutharika adopting some programmes to address climatechange,povertyanddiversification in termsofagricultureandultimately,theeconomy.

inhisareahavebenefittedalotfromNGOsinterventions.

“The NGOs have been supporting farmers on issues of fall army worms by providing pesticides while also providing seeds and fertilizers,”saidLuwe.

Sharingthesamesentiments,ELDSassistantdevelopmentpro-gramsofficer,MascotMasekosaidtheorganizationiscommit-tedtoassistinggovernmentinimprovingpeople’slivesthroughimprovedagriculture.

“Our part as ELDS is to advise farmers on food security andastherainyseasonhasendedwesupportthemtotakepartinirrigation farming in order tomaximize their productivity,” saidMaseko.

MeanwhileNGOsworkingwithChitipaDistrictAgricultureDe-velopmentOfficeincludeTubepokaDevelopmentInitiative(TDI),Self Help Africa, Evangelical Lutheran Development Services(ELDS),andLusubiloCommunityBasedOrganization.



hecurrentCOVID-19pandemic andeffortstocontainitare significantlyimpactingcountriesaroundtheworld,regardlessoftheirlevelofincomeoreconomicdevelopment.

Apart from the novel coronavirus’ tragictoll in terms of human health and liveslost, government-imposed rules and re-strictions on movement and assemblyhaveupendedworkandlivelihoodactivi-tiesforbillionsofpeople,causingseriousstrainonbudgetsandhouseholdresourc-es,seriouslyimpactingpeople’sabilitytocareforandnourishthemselvesandtheirfamilies.

Thesenegativeeffectscanbeimmediateand often catastrophic for people whohavefewresourcestofallbackoninhardtimes — such as Africa’s estimated 33millionsmallholderfarmingfamilies.

Development and humanitarian organi-zations are pivoting to incorporate sec-ondary impacts—suchasnutritionandfoodsecurity—intofundingplanningandemergencyactivities.

Most of them live on what they cangrow themselves for food and also sellto earn income topay formedical care,school fees, and other expenses. Evenbrief shortfalls in harvest volumes, seedand input supplies, ormarket sales canquicklyleadtolessfood,oratleast,lessnutritiousfood,onthesefamilies’plates,leadingtomalnutrition—orworse.

Thisrealitywasreflectedrecently inMa-lawi, a country in southernAfricawheretheClintonFoundation’sClintonDevelop-mentInitiative,HarvestPlus,andtheInter-

COVID-19 highlights need to boost resilience of rural poor By ARUN BARAL, APARNA DAS, BILL RUSTRICK

T national Maize andWheat ImprovementCenter,orCIMMYT,areworkingtogethertostrengthentheresilienceofsmallholderfarmingcommunities.

In mid-April, Malawi’s government de-clared a 21-day lockdown to help control the spread of COVID-19, sparking im-mediate protests about the lack of gov-ernment support measures in place to help the country’s low-resource citizens manage a likely sudden drop in their economic activity, including farming. An advocacy group actually succeeded in convincing Malawi’s high court to issue an injunction to postpone the lockdown.

Malawiansreactedquicklybecausetheyknow how tenuous their livelihoods are.Thesituationalsohighlightedtheneedtoensure that smallholder farming families— aswell as other low-income popula-tions—arebetterabletoweathershocks,be they health threats like COVID-19,droughts,cropinfestations,orotherwise.

Inthecontextofthecurrentglobalhealthpandemic,itisalsomorecrucialthaneverfor all stakeholders to focus on buildingresilient,inclusivefoodsystemsthatworkforsmallholderfarmingfamilies.

Strengtheningtheresilienceofsmallhold-ercommunitiesiscriticaltoguaranteeingtheir food and nutrition security in thepresentandfuture;otherwise,theystandto fall further behind and suffer seriousconsequenceswhenevershocksarise.

A key aspect of building resilience forthese communities is to ensure that thestaplefoodcropsgrownbysmallholdersareasnutritiousandrobustaspossible,

so that farming families benefit in bothhealthandlivelihoodterms.

AspartofthepartnershipworkinMalawi,therearenow30demonstrationplotsforsmallholderfarmersin10districtswithva-rietiesofmaize thataredrought-tolerantandothersthatarebothdrought-tolerantandrich inprovitaminA—amicronutri-entthat iscritical forgoodvisionhealth,proper fetal development, and strongerimmunesystems.

The plots also include high-iron beansdevelopedbytheInternationalCenterforTropicalAgriculturewithHarvestPlus.Ironisaleadingcauseofenergy-sappingane-mia, aswell as impaired cognitive func-tioninchildren.

ThedemonstrationplotapproachinMa-lawiisreachingabout30,000farmersandisanentrypointtoengagefarmingcom-munities in ways that they can becomemoreclimateresilientandhaveaccesstonutritionallyenrichedfood.

Through the plots, the partners gathervaluable feedback from the “end user,”whichallowsformutuallearninganden-couragesbuy-inbythefarmersmanagingthedemosandthebroadercommunitiestowhichtheyareconnected.

In the coming seasons, we expect to see these varieties being grown in the farmers’ fields more widely, driving re-silience across the entire farmer popu-lation through increased access to, and availability of climate-resilient and nutri-tionally enriched seeds.



atriciaDzimbiri(37)isoneof thesuccessfulfemalelead farmers who participated intheAgricultural ProductivityProgram forSouthern Africa (APPSA) project from2013to2020.

APPSAwasasix-yearprojectsupportedbytheWorldBanktopromotearegionalapproachtoagriculturaltechnologygen-erationanddisseminationinthreeSADCcountries, namelyMalawi,Mozambique,andZambia.

Based in Chinguluwe Area, in SalimaDistrict,Malawi, this37yearoldwomanworkeddirectlywithAPPSAresearchandextension agents to help champion thedemonstration of technology in agricul-tureinhercommunity.

Dzimbiri participated in farmer field tri-alsforConservationAgriculture(CA)andmaize-legume intercropping for threeconsecutiveyears.She ispartof the41300leadfarmersinMalawi,MozambiqueandZambiawhohaveparticipatedinthisproject.

“Munda woyala mapesi mumakhala tchile lochepa…timangozulira (the plot under CA had very few weeds which only require hand weeding because the growth of weeds is suppressed by the ground cover),” saidDzimbiri.

Scale farmers with the opportunity toachievefoodsecurityinthefaceofchal-lengesofpoorsoils,poor rainandpooryields.

DzimbiritestifiedthathermaizecropfromCAplotgrewfasterandbiggerthanfromtheconventionalmaizeplot.

The technologies that have been pro-motedbyAPPSAoverthepastsixyearsaimedatimprovingthefarmingpracticesintheregioninspiredDzimbiritoscaleupherfarmingproject.

“IplantoexpandCA,maize-legumeinter-croppingtotwoacresoflandinthenextcropping season because the results ofthisprojectwereamazing,”Dzimbirisaid.CAisasetofsoilmanagementpractices

All smiles for farmers in Malawi, Mozambique and Zambia By SHARON KAVHU

P thatminimize thedisruptionof thesoil’sstructure,compositionandnaturalbiodi-versity.

Asexpectedofallleadfarmerswhopar-ticipate in the APPSA project, Dzimbirihasalsodisseminatedtheknowledgeshelearnt from the researchers toher fellowfarmers.

Shementoredsevenfellowfarmersfromnearby villages in CA, and to over 70farmersthroughfielddays.

Similarly in Chimbonila District,Mozam-bique- APPSA coordinator Dr MonicaMurata said participant farmers havedemonstrated some agro-processingtechnologiesthathavebenefitedcommu-nities.

“In Chimbonila District the use of le-gumes flour to prepare porridge im-proved the health of malnourished chil-dren in the district. Weight gain for some of the orphaned children who were fed legume porridge was recorded,” saidMurata.

Shesaidseveral farmers in the targetedcommunities have been inspired to in-crease legume production both for saleasgrainandalsotoprocessedproducts.“Other farmers are increasingly showinginterestinproducingandusingbeansforprocessing into flour, baking cakes, bis-cuits,bagiasandporridge.Theyarealsointerested in proper packaging of theirgrain legumes so that they can attractbettermarketswhichpaymoreforqualityproduce,”addedMurata.

Murata said the benefits of agro-pro-cessing legumes has encouraged manyfarmersinthedistricttoincreasetheirle-gumeproductionsaswellastokick-startlegumeprocessingasan incomegener-atingventure.

“Theyhaveorganized themselves in “le-gumes groups”which aim at sensitizingother farmers in legume production andprocessing,”addedMurata.

Shesaidtheupscalingoflegumeproduc-tion is expected to lead to an increase

in agro-processing and improvement inmarket access, thereby leading to foodand nutrition security, and improvementofsmallholderfarmers’income.

APPSA project in Malawi, Mozambiqueand Zambia was launched in 2013 andconcluded in January 2020. In the sixyears,theprojecthasbenefitedover750000households.The41300leadfarmersestablishedmorethan5000demonstra-tion plots on various technologies andmanagementpractices thatwerehostedat3000fielddays.

Duringthesameperiod,atotalof7968seed and food fairs were conducted.Food fairs focused on value addition tolegumes,maizeandricegrainandAPP-SA promoted seed varieties among thefarmingcommunitiesandtheprivatesec-torforseedmultiplicationsothattheycanbereadilyavailableandaccessibletothefarmers.

APPSAwhichisabrainchildoftheWorldBankwaslaunchedin2013withtheaimofgeneratinganddisseminatingtechnol-ogiestofarmerswithinandamongpartic-ipatingcountries inSouthernAfrica.Theproject alsobuildscapacity for hostna-tionalresearchanddevelopmentsystemsandenhancesregionalcollaboration.

Although it was aWorld Bank initiative,APPSA is coordinatedand facilitatedbytheCentreforCoordinationofAgriculturalResearch and Development in SouthernAfrica(CCARDESA).

Following the successful stories of thethree countries, APPSA is set to com-mence in Angola and Lesotho this yearforthenextsixyears.

Murata said implementing the project inAngolaandLesothohasbeenaffectedbytheoutbreakoftheCOVID-19pandemicintheregion.

“However, the outbreak of COVID-19 has caused the organisation to intensify the use of online platforms and re-oriented its work plan to prioritize activities which can be done without physical contacts.”



ricesforthemaizedecreasedsignificantlybetween FebruaryandMarchinmostmonitoredmarkets, thoughpricesremainedsignificantlyhigherthanboththefive-yearaverageandlastyear’sprices.

According to data from both the Ministry of Agriculture andFood Security and FEWS NET, maize prices in the southernBalakaandNsanjemarketsdecreasedby28and41percentrespectivelybetweenFebruaryandMarch.

Thiscomesat thebackdropofsomehouseholds in localizedsouthernareasreceivingpoorharvestsduetodryspells,whilelocalizedareasof thenorthernKarongaandRumphidistrictsexperiencedcroplossesduetofloodingandwater-logging.

According to FEWS NET an increasing number of these households are likely to experience stressed outcomes as food stocks are depleted between July and September, with area-level stressed outcomes expected in Nsanje and Chik-wawa by September.

TheFEWSNETresearchfurtherindicatesthatmosthouseholdsacross the country are now consuming own-produced food,withharvests,andharvestwasexpectedtopeakbetweenAprilandMay.

Thereportfurtherindicatesthatthehouseholdswhowerefac-ingstressedoutcomesduring thepreviousconsumptionyearendingMarch 2020 are now transitioning tominimal as theyaccessfoodfromownproductionandincomefromcropsales.In addition, the minimal outcomes are expected to persistthroughatleastSeptember2020acrossmostofthecountry.

hethink-tanksatMwapataInstitutehaveinitiateda studytoassessthepotentialeffectsofthenovel coronavirus (Covid-19) pandemic on agri-food sys-tems.

According to the Institute, the studywill also delve into howplayersintheagriculturalvaluechainarebeingaffectedorlikelyto be affected and examine the enduring effects of the pan-demic.

Sloans Chimatiro, Mwapata Institute Executive Director saidthestudywillbeinthreephases,withthefirstphaseinvolvingcompilingCOVID-19factsinMalawiandgovernmentpolicyre-sponses.

“Government needs evidence-based guidance to quickly de-sign policies that effectively mitigate the impacts of Covid-19 that threaten to disrupt supply chains and livelihoods.

“This is likely to result in strained livelihoods in both the rural and urban areas, higher food prices, and severe economic fallout of employees in the agricultural sector,”saidChimatiro.

MeanwhileFarmersUnionofMalawiPresidentFrightonNjolo-mole has highlighted that apart from the loss of livelihoodsamong farmers, COVID -19 restrictions will also exacerbatehungerdue tohugepost-harvest losses thatwill result in1.5millionurbanandperi-urbancitycitizensfacinghungerasfoodwillbeinshortsupply.

MwapataInstituteworksinclosecollaborationwiththeNationalPlanningCommissionofMalawi,theLilongweUniversityofAg-ricultureandNaturalResources,andMichiganStateUniversity

FEWS NET records mixed harvest patterns

Mwapata study to assess the potential effects of COVID -19

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April - June 2020Insight

fricahassofarescapedthe worsthealthconsequencesof theCOVID-19pandemic.How-ever, thecontinent looks like itcouldbethe worst hit from the economic falloutofthecrisis:80millionAfricanscouldbepushed into extremepoverty if action isnot taken. And disruptions in food sys-temsraisetheprospectofmoreAfricansfallingintohunger.

Rural people, many of whom work onsmall-scale farms, are particularly vul-nerable to the impacts of the crisis. Itis therefore vital that the COVID-19 re-sponseaddressfoodsecurityandtargettheruralpoor.

At this time, the international develop-mentagenda isprioritizinghealth,econ-omiesand infrastructure.But theremustalsobeafocusonfoodsecurity,agribusi-nessandruraldevelopment.Thisisespe-ciallyimportantontheAfricancontinent.

Agriculturecontributes65percentofAf-rica’semploymentand75percentofitsdomestic trade. However, the rich po-tentialofagricultureasatooltopromotefoodsecurityandfightpoverty isat riskfromtheeffectsofCOVID-19.

InMarch,theUNEconomicCommissionforAfricapredictedgrowthinAfricawoulddropfrom3.2percentto1.8percentin2020.Withinthecontinent,lockdownsare

COVID-19 response must target African agriculture By OLUSEGUN OBASANJO & HAILEMARIAM DESALEGN BOSHE*

A disruptinginter-regionaltrade.

The effect of restrictive measures on food trade is especially worrying, in par-ticular for food-importing countries, but also because of shrinking export mar-kets for the continent’s farmers.

Across the European Union (the largestexportmarketforAfrica’sfreshfruitsandvegetables), demand has dropped forpopularproducesuchasKenyanavoca-dos, South African citruses andMoroc-canvegetables.Kenyahasalsorecordedan8.5percentdeclineforteaexportstodestinationslikeIran,PakistanandUAE.

Within countries, we are already seeingthat interruptions to transportanddistri-butionsystemsareimpedingsmall-scalefarmersfromaccessingessentialinputs–likeseedsandfertilizer–andfromgettingtheirfoodtomarkets.

African governments have defined stim-ulus measures to mitigate national andregionaleconomicimpactsofCOVID-19.

Astheydo,theymustrememberthatin-vestmentsinagriculturecanbeuptofivetimesmorepoverty-reducingthaninvest-mentsinothersectors.Investments in rural, small-scaleagricul-tureareparticularly important for the re-gion’sfoodsecurity,forsafeguardingthelivelihoods of some of itsmost vulnera-

blepeopleandforsustainingthegainsinpovertyalleviationandwealthcreation.

Small farms everywhere traditionallymakeahugecontributiontoglobal foodsecurity. Around the world, small-farmdominatedsystemsproduce50percentofallfoodcalorieson30percentoftheworld’sagricultural land. Insub-SaharanAfrica, however, the role of small-scalefarms is even more significant: 80 percentof farmsaresmall inmostof thesecountries.

Even before the current crisis, globallymore than 820 million people were go-inghungrydaily.And themajorityof theworld’spoorandhungrypeopleliveintheruralareasofdevelopingcountries.

In Africa, reliance on food imports, and lack of services and infrastructure to en-able small-scale farmers to produce and market food, along with the shocks of climate change, have all increased the fragility of food access.

In April, the World Bank projected thepandemicwouldhitAfricathehardestofanyregion,pushing23millionpeopleintopoverty.This raises thequestionofhowsmallproducersinAfricacangetaccesstoinputsandfinancetogrowandsellthefoodneededtoensurefoodsecurityandsupportlivelihoods.Africanleadersmustbeinthevanguardoffundingsolution.


April - June 2020Insight

In April, the International Fund for Agri-cultural Development (IFAD) launched a multi-donor fund- COVID-19 Rural Poor Stimulus Facility (RPSF) to address the immediate fallout of COVID-19 for rural people in Africa and elsewhere.

IFADspecializesininvestinginpoorruralpeople, targeting the poorest and mostmarginalized. Among other goals, thenewfacilitywillprovidesmall-scalefarm-ersandfisherswithbasicinputs,andhelpthemaccessmarketsandmaintaincashflow.IFADcommittedUS$40milliontothenewfund,butaimstoraiseatleast$200million more from UN Member States,foundationsandtheprivatesector.

Thefacilitywillcomplementandscale-uptheworkIFADhasalreadybeendoingtorepurposeexistingprojectactivities.

In Malawi, for example, a programmeis providing social cash transfers to ul-tra-poorfarmersanddeliveringmessagesabout financial literacyandCOVID-19prevention. In Eritrea, vulnerable house-holds are receiving small ruminants andseedstostrengthen,maintainproduction,accessmarketsandsafeguardhousehold

foodsecurityduringthecrisis.

Theseimmediateactionsareessentialtomitigatetheworstrisksofthecrisis.Theyare also important to safeguard IFAD’spastandongoinginvestmentstobuildthelong-termresilienceofrurallivelihoods.

Ultimately, we need to ensure that ru-ral people and their businesses are the foundation of resilient rural economies and food systems across Africa.

Then, when the next crisis strikes, the vulnerable people of today will be bet-ter able to protect their livelihoods and avoid the risk of falling into poverty and hunger.

Sowhileit’surgenttofeedpeopletoday,we alsomust look to the days,monthsandyearsahead.ThisisonereasonwhyIFADprioritizes long-termruralandagri-cultural development and building resil-iencetofutureshocks.It isalsowhyweurgepolicymakerstoadaptanyrelevantlessonsfromhowpreviousoutbreakslikethe Ebola virus affected agriculture andfoodsystems.

In the long term, this pandemic under-scores the need for Africa to transformagriculture and agribusiness as the sur-est path to inclusive economic growth,wealthgenerationandgreaterresilience.

AsSpecialEnvoys,webelieve in IFAD’sexceptionalmandateandwillcontinuetoworkcloselywith theFund inmobilizingresourcestosupportthemostvulnerableontheAfricancontinent.

Thepandemicwillexposethelivelihoodsof rural marginalized groups to unprec-edented challenges. To restore hope tothoseaffected,wecommitstronglytotheideathatnoonewillbeleftbehind,espe-ciallyinAfrica.

*The authors are Olusegun Obasanjo, former President of the Federal Re-public of Nigeria and Hailemariam De-salegn Boshe, former Prime Minister of the Federal Democratic Republic of Ethiopia. Both are IFAD Special Envoys engaged to mobilize support and ad-vocate for greater investment in rural areas.


April - June 2020Business,Companies & Markets

aseIH,oneoftheworld’s leadingagriculturalmachinery brands is playing a key role inrenewalenergyproduction inPhilippinesusingsugarcanetrash.

Tractors and other associated machin-eryarecollectingtrashandgettingittoapowerstation inNegros, the fourth larg-estislandofthePhilippines,intendingtoproduceatotalof72megawattsofgreenbaseloadpowertofeedintothelocalgridas well as for export to surrounding is-lands.

“The cane farmers leave the trash after the harvest, and we move into the field with our equipment and collect it, taking it to the power station for burning in a controlled environment to produce elec-tricity,” saidPaulCoveny,Vice-PresidentBiomassOperationsandMaterialsMan-agementforBiopower,thedevelopersoftheproject.

Paulsaidwhenlookingforanequipment

Case IH tractors help generate power in Philippines

C supplier,theyrecognisedCaseIH’sposi-tion as a leadingprovider of technologysolutions,withastate-of-the-artmachin-eryline-upthatassistedBiopowerinsus-tainingthefuelsupplynecessaryfortheirelectricityobligations.

The company has purchased over 100CaseIHmachinesincludingFarmlifttele-handlersandFarmall,MaxxumandPumatractorsthroughFilholland,thedistributorofCaseIHmachineryinthePhilippines.“Our operation has a very small window to do what we need to do, so we needed reliable tractors that could operate con-tinuously, 24 hours a day,”Paulsaid.

“The technology in these Case IH trac-torshasgivenusthatreliability,andalongwiththesupportofFilholland,theydeliverwhatweneedintheshorttimewehave.”

For the Biopower staff who operate thefleetofCaseIHtractors,there’snodoubt-ingtheirsatisfactionwiththemachines.

Paul said the operators regularly com-mentedontheeaseofoperation,powerandspeedofthetractors,andthetech-nologyfeaturesthatmadetheirjobeasier.StaffalsohadhighpraiseforthetrainingofferedbyFilhollandon the tractorsandtelehandlers.

Biopower has also been able to installGPS-trackers and data loggers into thetractorfleet that identifyeachmachine’slocationandprovidedetailedinformationon what they’re doing and how they’redoing itatanygiven time—itprovidesalive, real-timeoverviewof the entire op-eration.

TheCaseIHFarmallJXisoneofthemod-elsusedintheBiopoweroperation,asmalltractor designed with manoeuvrability,visibilityandhandlingtopofmind.Pow-eredbyanupgraded8000Series,Tier3turbo-chargedenginetoprovideoptimumfuel efficiency andmaximumpower, theFarmallJXalsoofferslogically-positionedcontrolswithclear,concise instrumenta-tionthatmaketaskslessarduouswheninthefieldallday.

PaulsaidtheperformanceoftheCaseIHtractorsandtelehandlershadbeenevery-thing they’d expected and this, coupledwiththe24-hourserviceandsupport,ser-viceupdatesandtrainingprovidedbyFil-holland,confirmedthey’dmadetherightchoice.

When it came to running a high-pres-sure, round-the-clockoperation like thatof Biopower, Paul said, it was reassur-ingtohavethepeaceofmindofreliablemachinery, and support and assistancewhenandwhereitwasneeded.

“My experience in the sugar industry in Australia means I’ve seen a lot of Case IH equipment, and know the reputation of their tractors and harvesters, so I had the confidence in the brand to introduce it here onto Negros,” Paulsaid.

“Case IH is well-known worldwide, andwith a good partner like Filholland I’dhavenohesitationinrecommendingtheirproductstoanyoneinthePhilippines.

“Thebrandhasagreatsupportnetwork,it’saqualityproductandthat’simportantwhenyou’rerunninganybusiness.”


April - June 2020

hisisthesixthoutofseven articlespublishedbyACEto mark15yearsofoperationandcele-bratingtheregulatorylicenserecentlyacquiredfromtheRegistrarofFinancialInstitutions.

ThisarticlewillfocusonWarehouseReceiptFi-nance,pleasereadarticle3forotherelementsof the Warehouse Receipt System. As men-tionedinarticle1,theWarehouseReceiptSys-temwas established to enable ACE to guar-antee sellers’ performance on an Exchangetradedcontract.Therewas,however,anotherelementwhichbecametheabsolutemaindriv-erofvolumeonthewarehousereceiptsystem–finance!

ThefirstACEwarehousereceiptwasissuedbyFarmersWorldin2011toLawrenceChikhasu,asmalltraderwhodeposited14.5mtofmaize.Mr Chikhasu immediately requested financesohecouldgoandbuymoremaize.Nobankswereonboardat this time,soACE,eager toshow thepotentialof theWarehouseReceiptSystem,scrapedwhatlittlefundsACEhadanddisbursed MKW 261,000, being 60% of themarketvalue.MrChikhasumanagedtoaggre-gateatotalof40mtandsoldabouthalftotheWorldFoodProgrammeonaBVOauctionandtheotherhalftoaprivatesectorbuyer,earningaprofitof18%afterstorageandfinancecosthadbeensettled.

Only6receiptswere issued in2011,butwithanaverageprofitof30%,everyonewasveryexcited. All made money - the warehouseoperator, the financier, ACE, and the traders.The fundamentals had been proven and allagreedtocontinuethefurtherdevelopmentoftheWarehouseReceiptSystem.A task forcewasestablishedwithsupportfromtheUSAIDSouthernAfricaTradeHub to create a set ofregulations which could attract finance fromthe banks. ACE saw good support and par-ticipation from FCB (then FMB), NBM, CDH,OIBM and Standard Bank and in June 2012theACEWarehouseReceiptRulesandRegu-lationswereadopted.Bythen,thefirstreceiptsof the 2012 season had already been issuedandthedepositorswereliterallyscreamingforfinance.

Nobankcame forward– thiswasmost frus-tratingandsomethingACEhadnotanticipatedafter the support creating the ruleset. Againdesperatetofurtherdevelopthesystem,ACEdugdeepandgatheredMWK5millionwhichACEofferedtothebanksasafirst lossguar-anteeforthereceiptfinance.FCBagreedandofferedMWK20millionreceiptfinanceagainstACE’s first loss. That was the beginning ofWarehouseReceiptFinanceinMalawi.

Themodalitywascalled “haircutfinance”,asthebankwouldtakeahaircutandonlyfinanceaproportionofthecommodityvalue.Thede-fault haircut inMalawiwas 70%. The haircutwas actually meant to be very flexible andchangedependingonmarketprices,commod-ityand timeofyear.Thisdifferentiationnever

really materialised and a standard haircut of70%wasapplied.Despite2012alsobeingagood year with average profit of 25%, morebanksdidnotcomeonboard.FCBdidincrease its finance gradually and didn’t re-questafirstlossguaranteeanymore.Thecon-cernwaspricerisk.Beingexposedtotheag-riculturalmarketwasnotnormalbusiness forbanks–theyarenormallyexposedtotreasurybillsandbigbalancesheets!

The2014electiongave a hint to howunpre-dictableandvolatilemarketscanbe.Withtheelection coming up ADMARC started sellingmaize at about half of the market price andmaize prices came tumbling down. This dy-namic does not suit the Warehouse ReceiptSystem and maize depositors got stuck andonaveragelost20%thatyear.Incomparison,traderswithpeareceiptsmadeaprofitof20%thatyear.ACEnowhaditsfirstsystemic lossontheWarehouseReceiptSystem,causedbyGovernment market interventions. The onlypositive element from this situation was thatthe70%haircutwasenough riskmarginandbank finance was not at risk – all haircut fi-nancewassettled.

Eventhoughfinancewassettled,thesituationcertainlydidn’tbringmorebanksonboard.

Themainconcernthen,anditisstillthecasetoday, is that ACE needs to come upwith awaythatthebankscanhedgetheirexposure.Itwillbetheonlywaytoreallydevelopstructuredfinanceonthewarehousereceiptsystem.TheabilitytohedgeiswhatmakestheJohannes-burg Stock Exchange (JSE) so successful,However, Malawi price fundamentals just donotfollowtherestoftheworldandMalawicanthereforenotenjoythesafeguardsprovidedbytheglobalexchangesandthemarketisolatedtoMalawi is too small to recreate the instru-mentshere.ACEneededtobeinnovative.

In 2013 ACE went to Sunseed Oil (SSO), alargevegetableoilprocessorwhowasbuyinglarge quantities of soya. ACE said: “What isyourcostofstorageandwhat isyourcostoffinance?IfACE

takesthemarketpricetodayandaddyourowncarry-overcost to,say,5months fromnow–wouldyoutakeitatthatprice5monthsfromnow?”SunseedOil said: “Yes, butwewouldlike to store it ourselves.” And that was thebirthoftheACEforwardcontractforsoya.

When depositors delivered soya to SSO andgotawarehousereceipt,ACEwouldalsoissuea contract between the depositor and SSO,whereSSOwouldpaythecalculatedpriceandtakedeliveryatafuturedate.ACEwouldnowsendbothwarehousereceiptandforwardcon-tract to thebank and request finance for thedepositor.Thebankwoulddisbursetothede-positor and the bankwould be settled in fullwhenthe forwardcontractmatured. Ineffect,ACE had just swapped the price risk, of thevolatile agricultural market, with the balance

sheetofalargeroff-taker.Thiswaswhatbankshadbeenlookingforandappetiteforthistypeofreceiptfinancequicklymaterialised.

ThiswasanincrediblerevelationtoACE,vol-umes on the Warehouse Receipt System in-creased;tradeincreasedandmostimportantly,forthefirsttime,significantlevelsofcommis-sionwerebeing realised.ACEfirmlybelievedthat ithadfoundthecorecommercialmodel.Thiswasallgood.

However, ACE was also acutely aware thatforward contacts, although providing crucialmarket access, didn’t provide farmerswith amarketpremium.Theway the forwardpriceswas calculated, the seller was only receivingthe spot price as determined by the forwardbuyer.Whatwasneededwasmore competi-tionontheforwardmarketandACEexpectedthat one day, a buyerwould say: “I will taketheACEJanuarypriceplus1.”Thispremiumin the forward market would translate into apremium for the farmers in spot markets. Inotherwords,theincreasedliquidity inthefor-wardmarkets shouldpushprices in the spotmarket.ToACE’shugeregret,thisneverhap-pened.Thebanksreallyonlyapprovedforwardcontractfinance fromahandfulof large trad-ers.Not enough to create competition in theforwardmarket.

ACEalsolaunchedanunsuccessfulreceiptfi-nancemodality – bridge finance. In the earlyyearswheredepositorssawsignificantprofits,traderswerenaturallyexcitedandhungryforfi-nance.ACEgotmanyrequestsandmanysmalltradersdidn’thavecapitaltobringthefirstloadof commodity to warehouse. ACE came upwiththebridgefinancemodalitywhereACE,inthebeginningoftheseason,wouldadvanceto

ACE Warehouse Receipt FinanceFeature


April - June 2020

the trader for the first 5MT andget the 70%whenthebankwoulddisburseafterdeposit.In2014,ACEtrainedandcertified23commoditybrokers,with thebridgefinancemodalitybe-coming a central component of the servicesthat theACEbrokerscouldoffer theirclients.Unfortunately, toomanybridgefinance recip-ients did not honour the modality, often de-positinglessthanwhattheyweresupposedtodeposit,whichcarvedout anyprofitsupfrontandsometimesmadethereceiptgointoloss,which meant bridge finance was not settledin full.ACEhad to stop themodalitywhen itbecame clear that undercutting the systemseemedbe thenorm, rather than justactionsfromafew.The2014maizecollapsealsoreal-ised lossesonthebridgefinancemodality. Inall,onecansaythatbadtimingcoupledwithanaïvebeliefandtrustintheACEbrokersandother recipientsputanend toACEbridgefi-nance.

By2016,ACEcouldwalkonwater:ThatyearACEdid 90,000mt of trade, 50,000mt on theWarehouse Receipt System, USD 12 millionin disbursed warehouse receipt finance andUSD 150,000 in realised commissions, justshyofbeingsustainable.Whatcouldpossiblegowrong?Well–aseriesofveryunfortunateevents,whichcouldmaybehavebeenantici-patedandmitigatedagainst if theyhappenedintheirownright,butwhentheyhappenedsi-multaneously, it looksa lot likeaBlackSwanevent.

Firstly, Indiastopbuyingpigeonpeas,acon-tracttoNFRAwhichwouldhavesavedallpeadepositorsnevermaterialised,pricesdropped80%andthemarketwasincompletecollapseanddisarray.

Severalbanks lostsignificantamountsonpi-geonpeafinanceandthatwastheendofthehaircutmodality.Acruderealisationofjusthowvulnerableagriculturalservicesandstructurescanbe.

Secondly,in2016,theGovernmenthadcalledforsignificantfoodaidandestimatedthatMa-lawiwasshort1millionmetrictonnesofmaize.Resourcesweremade available by DFIs andDevelopment Partners and by October 2016significantvolumeswerecontractedforimportfromMexico.InNovember2016,privatesectorflagged that market indications showed thattherewasnotashortage.ACEcalledformeet-ingstoraisetheflag,pushforGovernmenttoallowexportandtrytogettheFoodAidIndus-try to divert imports and switch to local pro-curement.

Privatesectorwasright, therewas indeedanoversupplyofmaizeandpriceswereinsteadydecline. Private sector was sitting on about100,000mtandADMARC thesame.Tanzaniawas short of maize and wanted to buy it allat veryattractiveprices.Government refusedandinsteadofexportingsurplusMalawimaizeto Tanzania, Malawi was importing Mexicanmaize–tounderlinetheabsurdity–theimportcamethroughTanzania!

Maize was carried into the new season withsignificantnegativeimpacts.Privatesectorre-

Feature

alisedhugelosses,ADMARCneededatmulti-milliondollarbailout,banksretractedfinance,nodemandmaterialisedfornewseasonmaizewhich saw the lowest farm gate prices ACEhadeverrecorded,andfarmerslostbillionsofkwachas.ItisaviciouscircleandtheeconomicimpactonMalawiwashuge,andyet itcouldhavebeensoeasilyprevented. It isastound-ingthatGovernmentrefusedtoexportexcessmaize,anditwasequallysurprisingtodiscoverthat the FoodAidmachinerywas completelyunequipped to recognise and respond to achanging situation on the ground. There is areal need to make sure this doesn’t happenagain.

Nearlyallvaluechainswereaffectedandmostwarehouse receipts made significant losses.Many private sector companies were strug-glingandbankappetite tofinanceagriculturewas nearly non- existing. Forward contractfinancedropped fromUSD12million toUSD0.5millionandthemodalitydidnotrecover.By2018financestartedpickingupagain.Howev-er, bankswere requestingACE to offermoretraditional collateral management services,ratherthantheforwardcontractmodality.ACEestablishedCommodityServiceLimited(CSL)tohandlethisnewdemandandfurtherdevel-op commodity and warehouse services inte-gratedwiththeWarehouseReceiptSystem.Inessence themodalitiesare thesame,but thepaperworkisdifferent.ACEseesthisdemandfor Collateral Finance as the latest phase intheWarehouseReceiptFinanceevolution.Itisgreatrelief toseewarehousereceiptvolumesand finance reaching 2016 levels again. Al-thoughthistime,ACEiswalkingwithcaution,notonwater!

AsignificantcatalystforACE’sabilitytofacil-itatefinance,developnewmodalitiesanden-gagewithbanks, is the regulatory frameworknow adopted in Malawi. The process wasstartedin2014bytheWorldBankGroupandonlyfinalisedwiththelicensingthisyear.Ithasbeenagreatprocesstohavebeeninvolvedin–greatdedicationfromtheMinistryofIndustry,TradeandTourism,theReserve

BankofMalawiandindustryleaders.Wehaveinternational experts exclaiming that MalawihasadoptedafirstclassregulatoryframeworkforcommodityexchangesandWarehouseRe-ceiptSystems. It isnowACEs job toconvertthisintofirstclassfinanceandriskmodalities.There canbe nodoubt as to the importanceof agricultural finance. Themore finance, themoreliquidity,themoredemandandthereforebetter farm gate prices. The state of agricul-turalfinance isdirectly related to thestateoftheagriculturalsectorasawhole.Butwhenitcomestoaccesstofinanceinruralareas,theanswerisnotthatclearcut.Accessingfinancealwayscomeswitharisk.Ifyouraddedvaluedoes notmatch your interest on the finance,thenyouwill bemakinga loss.Most agri-in-dustryparticipantshavedifferenttoolsattheirdisposal to navigate the risks. Rural farmers,ontheotherhand,donotandarethereforeleftexposedtothemarketforces.

ACE has an exhaustive dataset of all ware-housereceiptseverissuedonthesystemand

ACEaskedIFPRIiftheywouldbeinterestedindoingadetailedanalysisofthedata,toidenti-fyifcertainbehaviourswereleadingtolossesandotherstoprofit.ThebalancingactforACEis todeterminewhetherACEshouldpromoteaccess tofinance to rural farmersor if this istoorisky.ThehopewasthatIFPRIcouldcreatea set of rules, as in, ifmarket price for soyais less thanUSD350/mt then there is a 90%chancetomakeprofitifthefarmersstore,ac-cess finance and sell within 6months. IFPRIagreed to do the study, but our hope wasquickly squashed. The reality presented itselfmuchmorecomplexandcomplicated.PleasefindmoreinfoonIFPRIwebsitehere.

Clearly the 2014 and 2017 event explainedmostof the lossesexperiencedon theWare-house Receipt System, but there were alsoother losses. There is a negative relationshipbetweenthedurationofstorageandthereturnsthatthedepositormakes.Forexample,maizeandsoyastored lessthan180daysgenerallymadeaprofit.However,adurationoflessthan90dayswasthecaseforpigeonpeas.Itisalsoimportanttopointoutthatcostoffinancewasasignificantshareoftotalreceiptcost.Someofthesereceiptshadacostoffinanceashighas35%,itisgoodtonotethattodaythishascomebelow20%.TherearemanynuancestothisstudyandACEcanonlyrecommendthatreadersstudyitforthemselves.

What does stand out is that receipt financesometimes is not beneficial and can be veryrisky if themarketexperiencesexternal inter-ventions. Unfortunately, this is the reality. Ontheother hand, access to finance is also thetoolthefarmersneedtobeabletodelayasaleinayearwhere thepricesareextremely low,like 2017. But again, according to the study,even extreme low post harvest prices, doesnotmean the receiptwillmake a profit. ACEdoesbelieveinprovidingfarmerswithchoicesandaccesstofinanceisacrucialandimport-antelement,even if thechoice ishard togetright.Thebiggesttakeaway,however,standsoutevenclearer–Governmentneedstostopunhealthyanddetrimental interventions intheagricultural markets which have devastatingoutcomesforallvaluechainactors.


April - June 2020Business,Companies & Markets

igitaltechnologieshavealready demonstratedhugepotentialfor agricultural transformation, andfacilitatetradeinAfrica.

Examplesofagriculturaltechnologiesbe-ing implementedon thecontinent rangefromlandregistrationprogrammesusingdistributed ledger technology (DLT),pre-cision agriculture projects local wherelow-costdronesareusedtoadvisefarm-ers on production decisions and pestand disease management projects in-cluding CowTribe in Ghana that usesmobilephones todeliveranimalvaccineandmanagementinformationtolastmilefarmers.

In addition, digital trading can facilitate access to new markets. Ecommerce platforms are well underway in Afri-ca with an estimated 264 operational ecommerce start-ups that are connect-ing producers to consumers and inte-grating rural communities.

With a high proportion ofmicro-, small-and medium-sized enterprises (MSMEs)aswell as smallholders, thecontinent isinneedofsolutionsthatincreasemarket

Technologies have potential for agricultural transformation

D opportunitiesforthesefirmsandfarmers.Experts have identified digital trade fi-nance as having great potential to helpclosetheUS$1.4-1.6 trillionglobal tradefinancegap,inwhichAfricaaccountsforapproximatelyUS$100billion.

The digital solutions can also enable in-creased access to trade finance for MS-MEs, which are typically most affected by this financing gap.

Smart contracts andDLT can provide asingleplatformforallpartiestoexchangetrade information digitally, auto-executecontractsandpayments inrealtimeandrecordan immutable transactionhistory.Thesetechnologieshelpreducethehighcostsof tradefinanceby improvingpro-cess efficiency and riskmitigation tech-niques,which are often key bottleneckstoMSMElending.

Africawasattheforefrontofdigitaltradefinancewhenapilottransactionwasexe-cutedontheWaveblockchainplatformbyBarclaysAfricatosendcheeseandbutterfromIrelandtoSeychelles.

Digitaltradecertificatescanalsofacilitate

trade by eliminating paper documenta-tion, reducing fraud and enabling fasterborder procedures, all of which reducecosts.

The International Plant Protection Con-vention (IPPC) ePhyto Solutions is oneexample that helps governments andcompanies trade plants and plant prod-uctsbyprovidingaharmonisedandstan-dardised approach for the exchange ofelectronicphytosanitarycertificates.Gha-naandKenyaarealreadyusingePhyto,with many other countries in the regionexpectedtofollowsoon.

Enhanced traceability in agri-food valuechains through the use of DLT can alsohelp improve food safety. Product datacollected and stored on a shared data-baselikeDLTprovidesanauditablepro-ductionhistorythatcanbeusedtoprovecompliance with food standards andmanagefoodsafetyrisks.Betterproducttraceabilityalsoprovidesconsumerswithdetailed information on how their foodis produced, incentivisingmore sustain-able and responsible agricultural supplychains.


April - June 2020Regional News

fricanDevelopmentBankPresidentAkinwumiAdesina saidtheAfricanDevelopmentBankwasspearheading efforts to feedAfrica, investing$25billionovera ten-yearperiodtotransformthecontinent’sagriculturesector.

“ThesizeoffoodandagricultureinAfricawillriseto$1trillionby2030.ThepopulationofAfrica,nowat1.2billion,willdoubleto2.5billionby2050.Theyallmusteat.Andonlythroughfoodandagribusinesscanthisbeachieved,”hesaid.

AdesinasaidwhatAfricadoeswithfoodwilldeterminethefutureoffood,giventhat65percentofthearablelandlefttofeedtheworldishere,.“I am delighted to see so many of our young people engaged in agriculture arising from the Youth Employment in Agricul-ture initiative launched when I was minister to get the youth into agriculture as a business.

“From their innovations in the use of drones, food processing, packaging, transport and logistics and marketing, they are al-ready unlocking the opportunities in agriculture,”hesaid.

Agriculture the most important business in the world

A Heurgedagriculturaluniversitiestooptimizetheirroleinlinkingresearch,innovationsandtechnologiestofarmersandthefoodandagricultureindustry.

“Africa’syouthmustbecomeleaderstohelpfeedourworld,”headvised.

MeanwhileAdesinahascommendedtheNigeriangovernment’seffortstopromoteagricultureandagribusinessinNigeria.

“Agricultureisthemostimportantprofessionandbusinessintheworld,”Adesinasaid.TheBankheadpledged tocontinue theworkoftransformingNigeria’sagriculturesector.

espitemovementchallengesduetoCOVID-19, Namibia’sbeefindustryissettosend860tonnesof variousbeefcuts,thisyeartoUnitedStates.

Thedevelopmentcomesfollowingnearlytwodecadesofnego-tiationsmakingNamibia thefirstAfricancountry toexport redmeattotheUS.

State-ownedmeatfirmMeatcohasalreadysentashipmentof25tonnesofbeeftoPhiladelphia,aspartofthe860tonnes,ex-pectedtoriseto5,000tonnesby2025.

“We’re able to finally export meat to the lucrative and big U.S. market,”Namibia’sministerofinternationalrelations,NetumboNandi-Ndaitwahsaid.

Meatco concludes US export deal

D USistheworld’sbiggestredmeatconsumer,asAmericanscon-sume on average 120 kgs ofmeat per person, according theU.S.DepartmentofAgriculture(USDA).

“Namibia will benefit economically from tapping into the larg-est consumer market with purchasing power of $13 trillion, and U.S. consumers will benefit from access to Namibia’s high-quality, free-range, grass-fed beef,”saidUSAmbassadortoNamibia,LisaJohnson.

In2019,Namibiaexportedabout12,400metrictonnesofmeattoNorway,Britain,theEuropeanUnionandChinesemarkets.

Thebeefexportswillalsobenefitfromaduty-freeregimeundertheAfricanGrowthandOpportunityAct(AGOA).


April - June 2020

heCovid-19pandemichasdisruptedalmostallsectorsofhumanlife.Forapredominantlyagro-basedeconomylikeMalawi,oneofthepoorestcountriesintheworld,thepandemichascoincidedwithitsrain-fedagriculturalcalendar.Thismeanstheintendedseasonalyieldisexpectedtodrop.Thatwillontheflipsideaffectlivelihoods.

All themeasures imposed to curb the spread of the pandemic are likely toigniteaseverefoodsecuritycrisisduetoafallinagriculturalproductionandimports.Theeffectson thewholeagricultural valuechainwill also reflect inlossesinotherinterlockingindustriessuchasmanufacturingandretail.Beingaventuremainlyundertakenbywomen,agriculturestandstoloseoutmoreinagro-basedeconomiesinthesub-SaharanAfricacountriessuchasMalawi.

70percentofthecontinent’sagriculturallaborforcearewomen,meaningtheCoronaviruswillsimilarlytakeahugetollontheirlivelihoods.Mostofthesearesmallscalesubsistencefarmerswhoseprimaryconcernisconsumption.Formanywomenfarmerstheirhouseholdincomeislikelytobeaffectedbyothermicroandmacroeconomiceffectsbroughtaboutbythepandemic.

However, there is still hope for Malawian farmers especially those with or-ganized production andmarketing services. In 48 farmer organizations andcooperatives inMchinji,LilongweandMzimbasupportedbytheUNWomenthree-yearproject“Contributing to the Economic Empowerment of Women in Malawi Through Climate Smart Agriculture”some10,000womenfarmershavebeenequallyanxiousaboutthepandemicthoughtheyhavesomereliefalongtheway.Theproject,whichfocusesongroundnutsproduction,isbeingfundedbyStandardBanktothetuneofK340million.

Thisproject hasbeen foundedonUnitedNationsSustainableDevelopmentGoals.ItinparticularfocusesonSDG2–ZeroHunger,SDG5–GenderEqual-ityandSDG13–ClimateAction.OneofthecooperativesbeingsupportedisGwiritseCooperativeinNsaru,Lilongwe.Beingpartofthecooperativeoffers

somecushionon the impactonproductivity.ToGwiritseCooperativemem-bers, themajor distraction has only beenon failure to conductmeetings inbiggroupsasinthepast.GwiritseCooperativeManager,PytonNgwira,saysdespitetheCovidscare,thewomenfarmerswillstillbenefitfromtheiryieldasthecooperativehasalreadysecuredamarketfortheproduce.

“We won’t feel too much strain because we have already secured a market for our produce as a cooperative. For some weeks now we have been ag-gregating the harvest of our members. As we speak we have given receipts to around 30 farmers who have deposited their produce at the warehouse,”saysNgwirawhosecooperativehas242membersofwhich152arewomen.HepointsoutthatthepandemiccametoMalawiaftertheyhadalreadyundertakenallkeyactivitiessuchasplantingandweeding.

GwiritseCooperativeexpectsanaccumulativeharvestofaround250metrictons (250,000 kgs) of groundnuts for the 2019/2020 growing season.Whilethere ishopeinregardstoharvest,thesefarmers–despiteobservingsocialdistancingandhygienewhencarryingoutactivitiesatthecooperative–mightbeexposedtothevirusinotherplacesduetorespectivesocialbehaviours.InMalawi’ssocialandculturalcontext,womenareoftenresponsibleforthecareofchildren,thesickandelderly.SotheycouldbepronetoCovid-19exposurein theirhomesandotherplaces.“We keep reminding our members to ob-serve all the preventive measures wherever they go and adhere to measures put in place by local and national government,”saysNgwira.SuchmeasuresarealsobeingcoordinatedbyUNWomen toall thecooperativesunder theprojecttoensurethatallthewomenfarmersaresafefromtheoutbreak.

However,thesesuccessesstillexistwithinaneconomystillgrapplingtofeeditspopulation.AccordingtoGovernmentofMalawi,throughtheMalawiVulner-abilityAssessmentCommittee(MVAC)1.8millionMalawiansarealreadyonthebrinkoffacinghungerthisyear.TheCovid-19pandemicislikelytocompoundthealreadyexistingproblemoffoodshortageonnationalscaleanditaffectswomenandtheirfamiliesregardlessofwhethertheyareinacooperativeornot.ThelargerpictureisthatofwomeninMalawibeingmorestrainedfromeffectsofthepandemicandrequiringlonglastingsolutionstoamyriadofproblemstheyfacebothintimesofemergenciesandnormalcy.

T

COVID-19, impact on food systems and gender in Malawi

To access more information on financial solutions offered by Standard Bank please reach out to the nearest branch and/or relationship managers or call 242.


April - June 2020Technology News

martfarmtechnologyholds greatpromiseforfarmers struggling to grow Japan’s sta-plegrainwhilewrestlingwith lowprices.Among the benefits: lower productioncosts, higher income and aworkaroundforthecountry’schronicmanpowershort-age.

The new technologies, including dronesthat can spray crops with fertilizer andpesticides, and rice transplanting ma-chinesequippedwithGPS,alsohavethepotential to lower supermarket prices.Thiswillhelpfarmbusinessesbyhelpingto shore up Japan’s dwindling rice con-sumption and by making exports morecompetitive.

Tanaka Nojo, a rice farming corporationin Japan’s western Tottori Prefecture,plans to introduce smart farming thisgrowingseason.Ithaspurchasedchemi-cal-sprayingdronesandaGPS-readyricetransplanter,which injectsseedlings intopaddyfields.

Including fruit orchards and vegetablefields,thefarmhas120hectaresofplant-edarea,100timesthenationalaverageof1.2hectares.Thecompanyexpandeditsoperation by leasing adjacent farmland,butitsgrowthslowedasthefarmbecametoobigfortheavailableworkforce.

Withthenewtechnology,“we will be able to reduce working hours by about an hour per day and it will help us expand further,” said the company’s president, Satoshi Tanaka. “We will be able to cut production costs by up to 10 perent.”

FukuharaFarm, incentralJapan’sShigaPrefecture,introducedanautomatedricetransplanterlastspring,aimingtoreducelabor costs and increase production ofthe low-priced rice varieties that manyrestaurantoperatorsprefer.

“It’sonlyamatteroftimebeforethepricefor 60 kg of rice falls below 10,000 yen($93),” said Fukuhara Farm ChairmanShoichiFukuhara.“Ouraimistomaintainanoperationthatcanearnsufficientprofitevenafterpricesdrop.”

AccordingtoJapan’sagricultureministry,the average production cost nationwidefor rice-growing households and corpo-rations stood at 15,352 yen per 60-kg

Japan adopt smart technology to streamline rice growing

S

bag in 2018, down 20 percent from 30years earlier. But production costs havestoppedfallingoverthepastfiveyearsorso.

“Although the [cost] reduction pro-gressed, thanks to expanded [farm] scale, that seems to have reached its limit recently as it has become difficult to find people due to the labor short-age,” said an official with theministry’sgraindivision.

Riceprices,meanwhile,havebeenonalong-termslide, squeezing farm income.Andproductioncostshavebeencreepinghighersince the2014season,withcon-sumers increasingly preferring premiumbrandsthataremoreexpensivetogrow.“Asbrandawarenesshasgrown inpro-duction areas, allowing [rice] to be soldfor higher prices, moves to lower costshaveloststeam,”saidYasufumiMiwa,ascholarattheJapanResearchInstitute.

Smartfarmingmayhelp,butsofarhigh-techhashadbiggestimpactinvegetablecultivation;progresshasbeenslowerwithrice growing. “There have been almostnoexamplesof [farmers] introducingthe[smart farming] equipment, such as thesaleofmachinesanduseofrelatedser-vices,whichhave[only]beguninthepastyear or two,” according to an official attheagricultureministry’sresearchpromo-tiondivision.

Infiscal2019, theministry launched thefirstsmartfarmingdemonstrationprojectforricecultivation.Byrentingequipmentto agricultural cooperatives and othersacrossthecountry,theministrywillstudythe effectiveness of the new techniquesinloweringcosts.Itestimatesthatsmartfarmingcouldcuttheman-hoursrequiredfor rice cultivation in halfwhileboostingyieldsby10percentto20percent.

Thepriceofthesophisticatedequipment,which is between 10 percent and 50percent higher than that of conventionalfarmimplements,isahurdle.Butasmorefarmers introduce high-tech machinery,the techniques may take hold. Japan’sricegrowersneedtomaketheirproductmoreprice-competitive.Domesticpricesarestillfarhigherthanthoseontheworldmarket. They face a further challenge:Thefoodserviceindustryisbuyingmorecheap imported rice and turning awayfrom pricier domestic products. And al-though exports hit an record annual re-cordin2019,sales“are limited to a few affluent people,”saidanofficialatama-jorricewholesaler.

Lowering retail prices is crucial if Japanistohaltthedeclineinriceconsumptionand spur export demand. Rice-growingareas have trimmed the amount of landundercultivationasconsumptionhasfall-en. The government tried for nearly halfacenturytoshoreuppricesbynudgingfarmerstotakelandoutofproduction.


April - June 2020

At ATC we pride ourselves in delighting our customers. And with our network of 17 shops countrywide and dedicated staff, we are geared for service with exceptional customer satisfaction.

Physical Address: Auction Floors Rd,Plot No. 29/76, Kanengo,Lilongwe MalawiPhone: (265) 1 710-240Email: [email protected]: www.atcmalawi.com

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Wednesday, 10 July 2019 17:56:01

Agricultural Trading Company

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April - June 2020

At ATC we pride ourselves in delighting our customers. And with our network of 17 shops countrywide and dedicated staff, we are geared for service with exceptional customer satisfaction.

Physical Address: Auction Floors Rd,Plot No. 29/76, Kanengo,Lilongwe MalawiPhone: (265) 1 710-240Email: [email protected]: www.atcmalawi.com

Agricultural Trading Company Limited

0

5

25

75

95

100



Documents

Climate-smart agricultural practices increase maize yieldagri-malawi.com/wp-content/uploads/2020/06/apr_june2020.pdf · climate-smart agriculture (CSA) practices, the country is on