Malawi’s Agricultural Commercialization for Rural Economic Growth and Job Creation

LILONGWE, December 14, 2022 - Before sunrise, multitudes of people pour out of their clustered homes, lodges, and fish-drying racks to buy fish from Lake Malawi, one of Africa’s largest freshwater lakes containing almost 1,000 species of fish.

Msaka is a busy beach in Mangochi, on the southern tip of Lake Malawi, where you are likely to be surprised to see a group of young women offloading fish from a boat branded “Fishland Ladies.” Dorah Chinangwa, 25, leads the young women’s group, which has confronted a male-dominated fishing culture and formed a cooperative, Fishland Ladies, in their quest to escape from poverty and unemployment.

“We started our group in 2018 with only 10 of us putting together our meagre savings, and then we gave each other soft loans for small businesses,” says Chinangwa. “Later, after realizing that fishing is big business, we started a collective venture on fishing. We felt sad that many young women in our community were getting unplanned pregnancies and sexually transmitted infections, including HIV, because they had nothing to do,” she says.

However, for two years, the business wasn’t profitable. All their jostling wasn’t worth it because of the small savings they had. But after accessing a matching grant from the government’s Agriculture Commercialization Project, AGCOM, Fishland Ladies now has a boat for easy access into the lake and fish, and a solar drier for improving the quality of their product. It is  linked to an off-taker who packages their catch for sale in supermarkets. They are now flourishing in this business.

Backing agricultural transformation

The 16^th Edition of the World Bank’s Malawi Economic Monitor (MEM) recognizes the need to transform Malawi’s agricultural sector into a more viable industry. “The current structure of household agricultural production in Malawi offers no pathway to sustained poverty reduction for many, if not most, farming households. This in turn informs the focus on the potential of agricultural commercialization to transform the rural economy,” says the MEM.

Fishland Ladies is one example of a cooperative that has benefitted from the rural commercialization concept, among the many cooperatives targeted by Malawi’s Agricultural Commercialization Project, AGCOM, which has received $95 million in backing from the World Bank since 2017 The cooperative received a K30.5 million (about $30,500) matching grant, after making a 30% contribution of the total sum it requested as mark of its commitment to transform their start-up into a viable business.

The group is now able to make about $800 from a day’s sale, up from as low as $30 previously. Agcom has therefore offered Fishland’s ladies better non-farm livelihoods, sparking rural economic transformation as the cooperative is able to employ other young people as well.

Since the start of AGCOM implementation in 2018, a total of 265 productive alliances have been signed with it, half of which deal in soya or dairy. showing that catalyzing agricultural commercialization at the local level is possible. The MEM’s argument centers on an approach to rural economic transformation that focuses on fostering commercially successful smallholders and creating on- and off-farm employment opportunities for smallholders. This, in turn, will generate jobs in agro-processing and service sectors, and require an increasing number of locally produced services.

It is likely to create more employment opportunities for rural Malawians, some of whom may give up subsistence farming to specialize in better paying industry and services jobs, as Fishland Ladies has done, eventually freeing up land for the most productive farmers who specialize in commercial agriculture.

At the end of each year, members of the cooperative share their annual dividends for boosting their personal businesses and quality of life. Group members own groceries, salons, and home-based bakeries, with some acquiring land, decent houses, motorcycles, bicycles, and other vital assets from the proceeds of their catch. The emerging businesses provide the basics for their households and children, including food and education.

Nyampesi, the off-taker who buys Fishland Ladies’ produce, is excited the women’s group now employs men and is able to make profits in this once-male dominated business.

The December 2022 MEM also underlines the importance of moving ahead with significant reforms to support agricultural transformation and commercialization which are centered around increasing farm-level productivity and climate resilience, improving the business enabling environment (including free trade in food products), and investing in productive infrastructure to support agricultural markets.

“A vibrant rural economy, stimulated by improved policies and better-targeted investment, could lift the economy as a whole out of its current low-growth equilibrium,” says Nathan Belete, World Bank Country Director for Malawi, Zambia, Zimbabwe, and Tanzania.