UNDP/AGRA catalytic grants have proven benefits for farming cooperatives in the groundnut value chain in Malawi

In November 2020, RFS Regional Hub partners AGRA and the UN Development Programme (UNDP) awarded three sub-regional catalytic grants to organisations working to strengthen agri-food value chains and integrate natural resource management into food systems. 

Each project has unique goals and targets a different value chain based on the needs of the local context. While the official results are still being compiled, the emerging benefits communities are experiencing are clear.

In Malawi, the African Fertilizer and Agribusiness Partnership (AFAP) developed the ‘Sustainable Agriculture and Marketing for Rural Transformation (SAP-MaRT)’ project to green the groundnut value chain and connect farmers, especially women and youth, with markets through a gender-sensitive multistakeholder platform.

Prior to the project, many smallholder groundnut farmers were caught in the nexus of poor market prices competing with high labour costs, making value-adding activities like shelling and grading uncommon practices. Even cooperatives struggled to produce operating capital because of low prices and low yields.

Cooperatives in Mchinji, Mzimba and Dowa also experienced these challenges until April 2022 and the intervention of the SAP-MaRT project, which is supported by Milele Agro Processing. Previously, the co-ops targeted by the project sold unshelled groundnuts and often resorted to selling their produce to vendors on the open market because the co-op couldn’t provide funds to support members in purchasing inputs.

"It was a challenge for me and my fellow farmers to shell groundnuts and grade them,” shared Malumbo Chumia, chairwoman of Engucwini Cooperative. “We would only sell groundnuts as harvested because the labour requirement for shelling groundnuts is very high."

Milele Agro Processing noted the challenge and invested in a mobile groundnut sheller that rotates among the cooperatives shelling groundnuts "We are grateful to Milele Agro Processing for the shelling machine, which has allowed us to shell and grade our groundnuts at premium prices," said Edith Chipeta of the Kapiri cooperative, one of many on the rotation.

But without funds to buy the processed groundnuts from co-op members, the co-ops struggled to keep their membership going. "We did not have enough capital to continue buying from our farmers as such members were side-selling to other vendors on the open market,” said John Mlowoka, Marketing Officer of Engucwini Cooperative. “This was affecting our annual targets."

In response, Milele Agro Processing invested $10,000 to get the co-ops started. "We were [then] able to buy groundnuts from our farmers and resell them at higher prices," said Edith Chipeta.

The SAP-MaRT project prides itself on providing much-needed interventions to address bottlenecks smallholder farmers are facing in the groundnut value chain. Apart from investing in labour-saving machinery, the project is also supporting farmers with access to extension services which are helping to increase their productivity. The growth in the groundnut value chain is expected to increase soil health, which has both climate change adaptation and mitigation benefits. It is also expected that, in the long run, there will be an overall reduction in the cost of inputs for farmers and increased nutrition and incomes at the household level.

The groundnut value chain provides a significant opportunity for Malawi to achieve its food systems transformation aspirations, as per its commitment made at the UN Food Systems Summit including women’s empowerment in agriculture, resilience building and nutrition. Time will tell the long-term benefits of the catalytic grants from UNDP and AGRA, but in the meantime, giving farmer organisations a boost is a clear benefit of the grants.

For additional information on the catalytic grants, contact Assan Ng'ombe (AGRA) and Mupangi Sithole (UNDP).