Malawi: Mega Investment Commercialises Small-Scale Farming

Lilongwe — WHILE agriculture is the backbone of Malawi's economy, half of all the farmers cultivate less than one hectare, making it hard for them to produce a surplus for market.

The impact of climate change, which contributes to the slow rate of poverty reduction, compounds the problem.

It is with great anticipation that a new US$125,4 million programme has been launched for the benefit of at least 300 000 highly vulnerable Malawian families.

The programme -Transforming Agriculture through Diversification and Entrepreneurship Programme (TRADE) - aims to increase the families' productivity and strengthen their market access.

Funding includes a $51,1 million loan and $18,9 million grant from the International Fund for Agricultural Development (IFAD) and $20 million in co-financing from the Organisation of the Petroleum Exporting Countries (OPEC) Fund for International Development.

In addition, $15,3 million is provided by the Government of Malawi, $11,7 million from the private sector and $8,3 million from beneficiaries themselves.

It is anticipated that TRADE will help the Southern African country achieve the Sustainable Development Goals (SDGs) and contribute to improving the livelihoods of rural people.

It is expected to help develop value chains for commodities comprising beef, diary, groundnuts, honey, Irish potato, soybean and sunflower.

Ambrosio Barros, IFAD director for Malawi, said the new programme would consolidate and scale up the success and good practices of the completed Rural Livelihoods and Economic Enhancement Programme in Malawi.

"It will focus on the commercialisation of smallholder agriculture through strengthened access to markets and financial services, while also focusing on adaptation to climate change, which is key for poverty reduction," Barros said.

TRADE is expected to strengthen the capacity of smallholder farmers, organise them into producers' organisations and promote partnerships with small and medium enterprises.

It will also develop roads and other rural infrastructure.

At least 55 percent of vulnerable women and 50 percent of young people in the 11 districts covered by TRADE will benefit from programme activities.

Since 1981, IFAD has invested more than $336 million in 14 rural development programmes and projects in Malawi. These are worth a total of almost $638 million.

These interventions have according to IFAD directly benefited more than 2 million rural families.

Agriculture accounts for 30 percent of Malawi's and 80 percent of foreign earnings. It also employs more than three quarters of the active population of over 18 million people.

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