Farmers sow seeds of change for Malawi’s co-ops

Members of Chiyambi Co-op outside their store

August 26 2010

After decades of autocratic rule, the co-operative movement is recovering in one of Africa’s poorest countries. Stirling Smith, a member of the Co-operative College’s international development team, reports from Malawi . . .

Imagine if the government just closed down the co-operative movement and took over all the assets of the consumer societies, farmer co-operatives — the lot?

It has happened more times than you might think — co-operatives were one of Mussolini’s first targets after the Fascist takeover of Italy. Nyere did it in Tanzania, though he later regretted it. It also happened in Malawi. But the country is fighting back with an emerging co-operative movement, and has some interesting lessons for anybody interested in how Africa can climb out of poverty.

As in other former British colonies in Africa where the Co-operative College is working, co-operatives were set up by the colonial administration which ruled the country, then called Nyasaland. When independence came in 1964 there were around 140 active co-operatives with 48,000 members

But after independence, Dr Hastings Banda instituted an autocratic one-party rule that lasted nearly three decades. He suppressed co-operatives and transferred assets to government-owned organisations. Some members in the UK used to complain about living in a “co-operative desert”, with no stores in their area. Well, that was Malawi!

Happily, things are changing for the better. Take Mzuzu, in the north. Scattered over the region are five primary coffee co-operatives, producing high-grown arabica, which have formed a strong secondary society. In the old days, farmers had no alternative but to sell to the government-run Smallholder Coffee Authority. It was badly run and paid farmers too little, too late. Many farmers stopped growing coffee altogether because it just was not worth it.

Then, when the Ministry of Agriculture decided to privatise the Authority, the farmers demanded the right to buy it themselves. The co-operative has now paid off a substantial loan and employs 65 staff. Mzuzu coffee is good and you’ll soon be able to buy it in the UK — although, unfortunately, not at co-operative stores.

This is great success story. A co-operative as an alternative to privatisation, along with a fierce commitment to democracy in running the affairs of the co-operative. At the AGM — held just weeks ago — farmers broke into small groups to discuss the dividend. Best of all was an offer to turn over one their training centres to be the campus of a future Co-operative College.

Success stories are needed in Malawi, because the country is poor — depending on how you work it out, the sixth or tenth poorest country in the world. I don’t suppose many Malawians worry about which statistic is correct.

About eight million people, or almost 70 per cent of Malawians, live below the national poverty line. More than 90 per cent live in rural areas. In a country so dependant on agriculture, getting farmers to grow enough food to feed a rapidly growing population, and a surplus to export, is vital. But it is not happening. One big problem is that 90 per cent of land depends on the rains, and the rains can, and do, fall regularly. So irrigation is a priority.

But many irrigation projects fail to deliver the promised benefits. There are a number of obstacles: Malawian farmers lack credit; they cannot get inputs like fertiliser and this is not just price, but because the distribution network is not there; they follow poor agronomic practices; and they lack markets, so even when they grow a good crop, they cannot sell their harvest. A middleman pops up and offers a low price. The farmer needs cash and takes what is offered.

Co-operatives can help with all of these problems. They can provide credit either directly, or through savings and credit co-operatives. These appeared in the 1980s and, as in many other countries in Africa, have grown strongly and constitute the strongest part of the co-operative movement.

Co-operatives could also organise distribution of inputs. One of the most successful co-ops is the Indian Farmers Fertiliser Co-operative which, since it was established in the late 1960s, makes and distributes to 40,000 small farmers’ co-operatives — which own the business.

When it comes to marketing, co-operatives are proven to be a lifeline. If ten small farmers each try to take a basket of onions or tomatoes to the nearest market, they waste all day travelling and sitting down by the side of the road, waiting for buyers. If they pool their harvest, and send one member instead, they start saving at once. Even better, if they can get market information on where the best price for tomatoes is to found. Better still, they can process their tomatoes into something like tomato ketchup.

At the College, we know how important co-operatives can be for poor farmers because it is our job to study reports and gather information. What’s great about Malawi is to see people putting it all into practice. Take Mitundu, for example. This is a processing co-operative formed by 16 women and four men. It buys groundnuts and sunflower seeds and, using simple technology, the co-operative presses the nuts and seeds into oil for cooking. To us, the amount of labour to produce the oil seems excessive, but this is a group process. Importantly, the scheme is giving hope — anything is better than just watching your crop rot.

Chiyambi Co-operative has purchased a mill for grinding maize, the key staple in the Malawian diet. It has set up a mushroom production unit and helps members with marketing vegetables, onions and tomatoes.

There is also Mapanga Horticultural Co-operative where members sell their honey to the co-operative, which purifies and packs it. The co-operative helps members by supplying beehives and advising how to keep bees. Mavis Rigone, the co-operative’s Chair, told me that with their extra income, members can “buy clothes, pay school fees and eat better”.

Malawi became a multi-party democracy in the 1990s. It introduced a co-operative policy in 1997 and a law in 1998. A small Department of Co-operatives is trying to make up for 30 lost years through a programme of grass roots support. The Government has even made it mandatory for groups under one programme to become a co-operative in order to access loans. Currently Malawi is said to have 400 registered co-operatives; 300 of these are agricultural.

An encouraging story. We are now thinking about how we can help Malawi’s co-operative movement take off. What everybody agreed on was the need for co-operative education to re-build the movement.

• Stirling Smith is International Programmes Manager at the Co-operative College. A team from the College has recently returned from a two-week visit to Malawi, which was funded by the Co-operative Group’s Enterprise Hub. A report will also appear in the next issue of re:act — published by the Co-operative Group.

Category: Worldwide Co-operation