New Alliance for Food Security and Nutrition in Malawi

Annual Progress Report 2015

Malawi New Alliance 2015 Report 

CONTENTS ACRONYMS .......................................................................................................................................................... 4 EXECUTIVE SUMMARY ......................................................................................................................................... 5 1.

Introduction ................................................................................................................................................. 5

2.

Progress Indicators on key policy commitments......................................................................................... 7

2.1

Economic context ................................................................................................................................. 7

2.2

Improved score on doing business ....................................................................................................... 8

2.3

Increased dollar value of private sector investment in the agriculture sector and value added agroprocessing ............................................................................................................................................ 9

2.4

Increased private investment in commercial production, sale of inputs and produce, and value addition .............................................................................................................................................. 10

3.

Review of Mutual Commitments............................................................................................................... 11

3.1

Policy commitments ........................................................................................................................... 11

3.2

Donor commitments .......................................................................................................................... 12

3.3

Private sector investment intentions ................................................................................................. 13

3.4

Civil Society Monitoring ..................................................................................................................... 15

Annex 1:

Progress on implementing government policy commitments by August 2015 ............................ 17

Annex 2:

Success factors and challenges on policy commitments ............................................................... 19

Annex 3:

Progress on selected private sector commitments ....................................................................... 21

 

 

 2 

Malawi New Alliance 2015 Report 

List of Tables and Figures Table 1: Table 2: Table 3: Table 4: Table 5:

Summary of Government policy commitments in the New Alliance CCF ..................11 Summary of Government policy commitments by CCF objective.................................11 Donor commitments and disbursements: ASWAP ...........................................................12 Donor commitments and disbursements - New Alliance ................................................13 Performance achievements of LoI companies .....................................................................14

Figure 1: Figure 2: Figure 3: Figure 4:

Malawi's doing business ranking....................................................................................8 Investment into agriculture and agro-processing .................................................................. 9 Investments into commercial production, value added and sales of inputs/produce ..10 Performance of LoI investments..............................................................................................14

 3 

Malawi New Alliance 2015 Report 

ACRONYMS ASWAp CAADP CISANET DCAFS DfID EUD FISP NA GDP GoM HLTF JICA MoAFS MoIT NAP NASFAM STAM SUN SWG TIPSWAp TWG USAID

Agriculture Sector Wide Approach Comprehensive African Agriculture Development Program Civil Society Agricultural Network Donor Committee on Agriculture and Food Security Department for International Development European Union Delegation Farm Input Subsidy Program New Alliance for Food Security and Nutrition Gross Domestic Product Government of Malawi High Level Task Force Japan International Cooperation Agency Ministry of Agriculture and Food Security Ministry of Industry and Trade National Agriculture Policy National Smallholder's Farmers Association of Malawi Seed Traders Association of Malawi Scaling Up Nutrition Sector Working Group Trade and Industry Sector Wide Approach Program Technical Working Group US Agency for International Development

 4 

Malawi New Alliance 2015 Report 

EXECUTIVE SUMMARY Malawi joined the New Alliance in June 2013 alongside Benin and Nigeria, intending to implement a country cooperation framework (CCF) with 35+ policy commitments. The CCF included development partner funding commitments and private sector investment intentions into agriculture and food security, as well as government policy commitments. By the end of 2014, stakeholders agreed to streamline and re-prioritise the policy commitments and this report, unlike last year’s, is based on the revised CCF which has 15 policy commitments. The progress of the New Alliance each year is affected by general economic factors in the country. Malawi’s economy grew by six percent in 2014, with strong growth rates for the agriculture and manufacturing sectors of 6.3 percent and 6.2 percent respectively. The strong agricultural growth was driven by tobacco whose output grew by 13.8 percent. The ready availability of agricultural inputs was behind the growth in the manufacturing sector. Positive but dampened economic prospects have been projected for 2015 because of lower performance in the agricultural sector due to adverse weather conditions, including the late onset of rains; floods that plagued some parts of the country; and dry spells. The main challenges facing business are the instability of the exchange rate; high interest rates; high cost of inputs, such as utilities and fuel; and weak domestic demand with government accumulating huge arrears to the private sector. The implications of the economic situation on the New Alliance are not easy to forecast because of the diversity of stakeholders and companies involved. This report shows that it may be too early to assess the achievements of the New Alliance in terms of outcomes and impact; its three key indicators have data for the baseline situation except one on doing business. The Doing Business Index shows that the business environment was conducive and on target for the last two years except this year when Malawi was ranked 164 instead of below 160. In terms of implementation, the New Alliance has succeeded to prioritise and refocus from 35+ policy commitments to 15. Nearly 40 percent of the policy commitments have progresses satisfactorily. The overall donors’ disbursement rate to the agriculture sector, at 37 percent, shows considerable improvement despite masking significant variation: three out of the seven donors show disbursement rates higher than 50 percent. Donors have made substantial interventions into initiatives on extension, research and market access efficiencies to overcome productivity and trading challenges. The civil society has taken its part in monitoring the New Alliance by publishing two assessment studies. On the private sector, two companies – Rab Processors Ltd and Universal Industries - have completed their investment intentions. Nearly 80 percent of the investment intentions are either on course or facing minor problems. And out of the 26 companies, only two have withdrawn their investment intentions. Success on policy implementation is to a large extent attributed to the availability of dedicated leadership by portfolio Ministers and senior management; and good financial and technical support from cooperating partners. Aid modalities seem to be the key on understanding and improving different donor disbursement rates; and ready availability of agricultural inputs, own finance and land seem to be the main reason for companies to make quick progress in completing their investment intentions. Collaboration between stakeholders, within and outside government, and especially with the private sector, has greatly improved with the advent of the New Alliance. Sustaining and improving stakeholder collaboration further to deliver on commitments remain the outstanding challenge for the New Alliance.

 5 

Malawi New Alliance 2015 Report 

1. Introduction The beginning of the New Alliance for Food Security and Nutrition (“the New Alliance”) can be traced to the G8 Camp David Summit of May, 2012, where the G8 and African leaders committed to the next phase (hence New Alliance!) of their shared commitment to achieving global food security. They agreed on three things: to increase responsible domestic and foreign private investment into African agriculture; to take innovations that can enhance agricultural productivity to scale;1 and to reduce the risk borne by vulnerable communities. That was the start of the New Alliance and they made a shared commitment to achieve sustained and inclusive agricultural growth with the goal of raising 50 million people out of poverty over the next ten years in Africa. The first 6 African countries to join were Ethiopia, Tanzania, Mozambique, Burkina Faso, Ghana and Ivory Coast. Malawi joined the New Alliance in June 2013 alongside Benin and Nigeria. In December 2013, the New Alliance was officially launched by the Government of Malawi (“Government”) at the Bingu International Conference Centre, Lilongwe. The New Alliance is based on the principles of the Comprehensive African Agriculture Development Program (CAADP) and the concept of country ownership and leadership in the development and implementation of country agriculture strategies. It builds on the work that Malawi already did in developing the CAADP Business Plan, also known as the Agriculture Sector Wide Approach (ASWAp). The New Alliance incorporates the main recommendations from the National Export Strategy (NES) that are related to agricultural investment, and is jointly implemented through ASWAp and the Trade, Industry and Private Sector Development Sector Wide Approach (TIP SWAp). The implementation of the New Alliance is guided by a Country Cooperation Framework and Monitoring Matrix. The Country Cooperation Framework includes development partner and private sector investment commitments to agriculture and food security, as well as Government policy commitments. The tri-party arrangement aims to promote stronger coordination and mutual accountability of different stakeholders in the agriculture sector. Policy commitments focus in four main areas to ensure a strong enabling environment for agriculture and food security investments: 1. Create a conducive environment with reduced risk in doing business and fair market returns for smallholder farmers; 2. Improve access to water and basic infrastructure; 3. Improve productivity, storage of produce and produce packaging; and, 4. Increase uptake of nutritive foods and diets so as to reduce malnutrition. Out of 35+ policy commitments in the areas of objectives, Government was requested to prioritise commitments that would move forward reforms that have immediate implications on: i). ii). iii).

access to land and water; access to finance; and Inputs (seeds and fertiliser) reform.

1

Where a country is also a member of the Grow Africa Initiative, like Malawi, the New Alliance works in collaboration with Grow Africa in mobilizing private sector investments.

 6 

Malawi New Alliance 2015 Report 

2. Progress Indicators on key policy commitments The New Alliance for Food Security and Nutrition has three key indicators at the level of outcomes/impact for measuring progress and these are: a. Improved score on Doing Business Index to among top 100 economies b. Increased dollar value of private sector investment in the agriculture sector and value added agro-processing c. Increased private investment in commercial production, sale of inputs and produce and value addition Before looking at progress of the New Alliance as measured by these indicators,2 it would be important to appreciate general and pertinent developments affecting the Malawian economy over the same period of time. This will help to appreciate the contextual situation in which the New Alliance has been implemented up to date.

2.1

Economic context

One of the latest assessments of Malawi’s economy is found in the economic report for 2015 by Malawi Government: the economy grew by six percent in 2014, with strong growth rates for the agriculture and manufacturing sectors of 6.3 percent and 6.2 percent respectively. The highest growth rate in 2014 though was for the information and communication sector at 11.5 percent and this is largely attributed to activities surrounding general elections. The strong agricultural growth was driven by tobacco whose output grew by 13.8 percent. The ready availability of agricultural inputs was behind the growth in the manufacturing sector. The cited Government Economic Report provides the following reasons for the positive macro-economic performance: higher crop production, the steady decline in inflation rates, the availability of fuel and foreign exchange, and the reliability of electricity supply. The annual average inflation rate for 2014 was 23.8 percent but was on the rise towards the end of the year as it closed at 24.5 percent. On average, inflation was lower than in the previous year (2013) when it was 27.3 percent. The main challenges for business in 2014 were the instability of the exchange rate; high interest rates; high cost of inputs, such as utilities and fuel; and financial mismanagement in the public sector leading to substantial accumulation of arrears to the private sector. Positive but dampened economic prospects have been projected for 2015 because of lower performance in the agricultural sector in the 2014/15 growing season, the main driving force of the economy. Adverse weather conditions, including the late onset of rains; floods that plagued some parts of the country; and dry spells experienced in many districts are some of the underlying factors for the anticipated slower growth in the sector. The withdrawal of budgetary support by donors which started in 2013 due to massive fraud continued despite the change of government in 2014 and this has had negative implications on government’s capacity to demand and pay for goods and services from the private sector. The general implications of economic developments in 2014 and 2015 on private investment, especially of a long term nature, may be difficult to predict: the high cost of borrowing 2

Without providing data at the national level on these key indicators, it will be difficult for the New Alliance to report on its achievement or impact. Process indicators, like how many policies have been implemented and by when fall short on this front.

 7 

Malawi New Alliance 2015 Report 

makes capital expensive and the low level of public sector demand reduces profitability and investment returns. However, investments funded by foreign capital and targeting export markets may still flourish given low interest rates on international loans and the availability of raw materials from high agricultural production. The diversity of companies in the New Alliance for Food Security and Nutrition means that it is difficult to predict, without more detailed and specific analysis, the overall effect of the economic situation on investment intentions.

2.2

Improved score on doing business

The Malawian economy is mostly based on agriculture and as a result there is substantial private sector investment and trade based on agriculture. The activities of the New Alliance have a bearing on the business environment because they are facilitating reforms that have implications for the overall business environment. The Doing Business Index covers 10 topics and nearly half of them have direct linkage to the New Alliance Country Cooperation Framework: registering property (including land); getting credit; paying taxes; and trading across borders. Changes in the Doing Business index score can provide some broad indications on the progress of the New Alliance in the implementation of policy reforms. Figure 1 below shows the Doing Business ranking from 2013 when Malawi joined the New Alliance.

World Doing Business ranking 180 160 140

Index

120 100 Target

80

Actual

60 40 20 0 2013

2014

2015

2016

2017

2018

2019

2020

2022

Source: author based on WB Doing Business ranking data and CCF target. The downward arrow indicates that numbers below the target are also accpetable.

Figure 1: Malawi's doing business ranking Figure 1 shows that Malawi hit the target in 2014 by dropping eight places from 171 in 2013 (the year she joined the New Alliance) to 163 in 2014. But between 2013 and 2014 there has been virtually no movement downwards; and in terms of actual data, Malawi took a small step backward in moving from 163 in 2014 to 164 in 2015. One should expect then that the overall business environment has hardly changed over the last year and the New Alliance may have made little if any contribution to improvements in the situation.

 8 

Malawi New Alliance 2015 Report 

2.3 Increased dollar value of private sector investment in the agriculture sector and value added agro-processing There are two separate but interrelated components in this important indicator: the first covers the entire agriculture sector (as the provider of raw materials); and the other is the higher level of the agriculture value chain covering value added agro-processing (the user of agriculture raw materials). Data for tracking these indicators can be compiled from the Annual Economic Surveys (AES).3 In the past, this data was disclosed as part of National Accounts data on an annual basis but that is no longer happening. The available data from AES, based on a panel sample of around 41 companies (agriculture sector) and 49 companies (value added agro-processing), can serve as a baseline for future comparison when data corresponding to the New Alliance timeframe becomes available. The baseline picture, four years before the New Alliance, is captured in the figure below.4

Value of Investment 35.0 30.0

US$ mn

25.0 20.0 Agric-Sec 15.0

AgroProc

10.0 5.0 0.0 2008

2009

2010

2011

Avg 4yrs

Source: author based on NSO AES

Figure 2: Investment into agriculture and agro-processing

Figure 2 shows that in the period just before the New Alliance, investment into agriculture had outstripped investment into value added agro-processing even though the overall average for agroprocessing was higher for the period. It is not positive news for external trade: Malawi may be reverting to low value primary exports at a time it needs to break into high value trading.5

Collected by the National Statistical Office but these are not available for years after 2011. One has to aggregate data for the categories of firms relevant to the indicator. There may be unpublished sources, but at best these are 3

unlikely to go beyond 2013. This 2015 report serves as a benchmark for all future reports, showing clearly what data needs to be collected. 5 For these last two indicators, it is not the total amount that is important but the trend because the data is based on a panel sample. 4

 9 

Malawi New Alliance 2015 Report 

2.4 Increased private investment in commercial production, sale of inputs and produce, and value addition This is much broader indicator than the previous one and it has three components of private investment, namely, commercial production, sale of inputs and produce, and value addition. This indicator goes beyond agriculture and agro-processing, and probably the vaguest of the New Alliance indicators. It is possible to compile it from the AES6 but at this stage, just like the second indicator above, only in terms of baseline data. The figure below shows the baseline.

Private Investment 120.0 100.0

US$ mn

80.0 CommPrd

60.0

Sales ValueAd

40.0 20.0 0.0 2008

2009

2010

2011

Avg 4yrs

Source: author based on NSO (AES)

Figure 3: Investments into commercial production, value added and sales of inputs/produce

The trend is similar for all these investments over the four years prior to the New Alliance, differing only in terms of volume. This may be a sign that the said investments are driven by the similar factors in the economy.

6

Commercial production would cover two industries of agriculture and fisheries, and manufacturing. Sale of inputs and produce will be part of the wholesale and retail industry; and value addition would comprise manufacturing only. In practical terms, it is difficult to use these terms in this way because nearly all profitable activity – everything that the private sector does - can be said to be value addition

 10 

Malawi New Alliance 2015 Report 

3. Review of Mutual Commitments 3.1

Policy commitments

Another way for assessing progress in the implementation of the New Alliance is to review the implementation of individual policy commitments made by government with support from donors in the Country Cooperation Framework (CCF). In the New Alliance CCF, government committed herself to provide resources for policy implementation and mechanisms for dialogue with the private sector, donor community, and other stakeholders needed for the achievement of tangible and sustainable development outcomes, including the delivery of tangible benefits to smallholder farmers. Technical support to implement the New Alliance has been provided for institutional coordination and policy development. Dialogue has improved between lead government institutions and the private sector as a group and individually. Policy commitments have been reprioritised and streamlined; and there is progress in implementation as can be noted from the various active institutional forums for implementation, like SWG and TWG meetings, consultative workshops on policy development. Communication too has improved with the advent of a quarterly progress information bulletin for stakeholders. The progress in the implementation of government’s policy commitments is reported in Annex 1. It is important to note that policy development and implementation can be a complicated process that may not be easy to predict in some cases; it can be as short as one year or take many years. As such, in Annex 1, green represents policies that have been completed or are on course for completion (i.e. completed the part planned for implementation in a particular period); yellow for limited or no progress; pink for some progress; purple for significant progress.

  Table 1: 

Summary of Government policy commitments in the New Alliance CCF No progress

Some Progress

Significant Progress

Completed TOTAL

Due by June 20157 Due after June 2015

0 2

7

6

-

0 15

TOTAL

2

7

6

-

15

Table 2:

-

Summary of Government policy commitments by CCF objective Policy Objective

No progress

Some progress

Significant progress

Complete

Create a conducive environment with reduced risk in doing business and fair market returns for smallholder farmers Improve access to water and basic infrastructure Improve productivity, storage of produce and produce packaging Reduce the prevalence of stunting

2

4

4

10

1

1

2

Total

2

2

2 1

7

7

TOTAL

6

1 -

15

Malawi revised its CCF in April, 2015, and anything that was already completed or not prioritised has been left out. CCF commitments were reduced from 35+ to 15.

 11 

Malawi New Alliance 2015 Report 

Table 1 and 2 show that government and her partners have been making reasonably good progress in implementing New Alliance commitments as many of them are on course for completion within the expected period of time. The category of policy commitments under the objective of creating a conducive environment has two commitments that have made no progress but it has also the highest number of policy commitments (four) that are on course. Annex 2 gives specific detailed reasons for this kind of achievement, amongst which is the availability of dedicated leadership by portfolio Ministers and senior management; and good financial and technical support from cooperating partners.

3.2

Donor commitments

Donor partners committed to implement a number of enabling actions in support of private investment and also in support of government policy development to fulfil its commitment in the CCF. These have been captured in the form of financial commitments – funds budgeted and disbursed funds. These are reported in Table 3 below.

Table 3:

Donor commitments and disbursements: ASWAP Commitment timeframe

UK USAID EU Irish Aid Norway FICA JICA Total

2011-2017 2012-2019 2012-2019 2011-2017 2011-2019 2010-2019 2011-2020

Cumulative Commitment ($ ‘mn) 139.0 156.3 178.5 50.4 111.2 25.3 24.7 685.4

Cumulative Disbursed (2015) 46.59 34.75 68.61 32.67 38.60 15.94 19.2 256.36

Cumulative percent disbursed 2014 20159 31.20 34 4.95 22 19.9 38 30.3 65 20.0 35 34.7 63 1.08 78 37

Traffic light rating8

Source: DCAFS database using continuous donor reporting, except for cumulative disbursed for DFID in 2015 which came from ReSAKSS.

Note: GIZ (a G7 member) starts this year (2015-2016) to support the agriculture sector. The overall disbursement rate for donors, 37 percent, is below average but it does mask some differences. Three donors, Irish Aid, FICA, and JICA are above 50 percent. The situation shows some commendable improvement over the previous year despite differences in the sources of data. Aid modalities may be key to understanding the differences in disbursement rates amongst the donors. Donors with higher rates seem to be the ones that have direct implementation arrangements and smaller aid portfolio. Donor support to ASWAP though is not the same as donor support to the New Alliance, given that in the agriculture sector the New Alliance is only a program under ASWAP, and this is shown in Table 4 below.

8

The traffic light rating is based on 2015 disbursement in relation to the aggregated duration of commitment. This data is not comparable to 2014 because of different data sources. The 2014 rates were calculated based on data from the donor aid platform in the Ministry of Finance.

9

 12 

Malawi New Alliance 2015 Report 

Table 4:

Donor commitments and disbursements - New Alliance Commitment timeframe

UK USAID EU Irish Aid Norway FICA JICA

2011-2017 2012-2019 2012-2019 2011-2017 2011-2019 2010-2019 2011-2020

Total 2010-2020 Percentage of ASWAP

Cumulative Commitment ($ ‘mn)

Cumulative Disbursed (2015) ($ ‘mn)

Cum disbursed 2014 ($ ‘mn)

Cum disburse: Percent 2015

37.4 36.9 121.4 23.3 26.1 7.5 14.8

19.5 63.8 16.4 11.3 3.3 10.9

10.3 18.7 5.1 4.9 1.9 2.0

53 53 70 43 44 74

267.4 39

125.2 60

42.9

54

Traffic light rating10

Source: author based on reconfiguration of DCAFS database. Total disbursement percentages exclude UK. Note: Projects that directly support implementation of New Alliance CCF policy commitments or finance enabling actions to achieve results of policy commitments.

As can be observed, New Alliance commitments are below half (about 40 percent) of ASWAP commitments, but disbursements are much higher 60 percent. All things equal, this is a positive sign of better progress on the New Alliance than on the overall ASWAP. Even in terms of the overall disbursement rate, at 54 percent, donors seem to have delivered more resources on the New Alliance portfolio than on ASWAP. The aid modalities may also be behind this difference: donors tend to use non-government agents in the delivery of funding for enabling actions under the New Alliance. However, caution may be in order here: better disbursement rates do not necessarily imply effectiveness in service delivery.

3.3

Private sector investment intentions

The private sector committed to invest in projects that would deliver the tangible benefits of the New Alliance and these are reported in Annex 3. This section gives and overview. The New Alliance Initiative has 23 companies with letters of intent (LoIs) but jointly with Grow Africa there are 27 letters of intent.11 This section reports on progress for all the 27 letters of intent, of which 13 are domestic and 14 international. The self-reported investment intentions12 of the private sector under the joint New Alliance/Grow Africa Initiative are estimated at $144.75 million. The progress reported in this report covers only 10 companies (37 percent) of the group and these reported making $7.6 million investment in 2014. This amount brings the cumulative total to $39.5 million.

10

The traffic light rating is based on 2015 disbursement in relation to the aggregated duration of commitment. The difference is in scope and local presence. Grow Africa takes in additional companies that have no local presence but have market contracts with local companies that have also submitted letters of intent, and also some that are outside the scope of food security and nutrition but within the agriculture sector. 12 Information based on data self-reported by private sector through Grow Africa 11

 13 

Malawi New Alliance 2015 Report 

The overall performance of the private sector is summarised in the figure below.

LoI investments 10%

Figure 4: Performance of LoI investments

10%

Source: Grow Africa through private sector (LoI) self-

Complete On plan Minor problems

40%

40%

reporting 13

Major problems

The table below show some of the outcomes from the investments of the LoI companies in terms of smallholders reached, jobs created and the value of commodities produced or procured.

Table 5:

Performance achievements of LoI companies

Outcome 1. Smallholders reached

2. Jobs created

3. Value of commodities produced or procured

Total Directly Indirectly Male Female Reached through: Open market sourcing Production contracts Financial or data services Input products and services Mechanisation products and services Training (technical/ management) Total Male Female Total From smallholders

2013

2014

156,000

539,878 394,514 145,364 41% 59%

19% 81% 22,700 21,000 137,750 0 36,000 2,750 76% 24% n.a.

50,000 53,118 147,708 389,294 0 223,618 1,291 76% 24% $8,280,694 74%

13

It should also be reported that two companies completed their investment intentions and two others cancelled their LoIs in 2014.

 14 

Malawi New Alliance 2015 Report 

Constraints and the enabling environment Apart from issues already being addressed in the CCF, companies in Malawi have highlighted the following constraints facing their operations and investments: i)

ii)

Environmental factors: environmental degradation and the changing climate negatively impact on activities of many agri-businesses, who rely on consistent seasons to plan harvests and pre-determine what type of fertilizers and seed are most appropriate and how much (if any) irrigation is needed. As most of the crops in Malawi are rain-fed, drastic changes in weather can ruin outcomes of an entire season. Erratic rainfall in some regions led to production challenges. Additionally, soil degradation decreases productivity and increases reliance on fertilizers. Human resources for crop diversification – With few commercial farms in Malawi, agri-businesses have a difficult time finding staff with experience to the level that their ventures demand. Few people have expertise outside of the tobacco growing industry.

3.4

Civil Society Monitoring

The role of the civil society in the New Alliance is to act as a watchdog as usual and in this case it is to monitor that government policy commitments and private sector investment intentions are implemented in a inclusive manner and not at the expense of the vulnerable and marginalised groups in society that they seek to help. In this context, the civil society participates in the core technical committee of the New Alliance which oversees tasks of policy design, implementation and reporting, and also in any other national forums organised by the New Alliance. As part of their work, the civil society has written two studies on the New Alliance: the first one written by Action Aid, and the second by a consortium of NGOs, namely, CISANET, Christian Aid, Concern Universal, and CEPA. The report by Action Aid, titled ‘New Alliance, New Risk of Land Grabs: Evidence from Malawi, Senegal and Tanzania, is irrelevant as it raised issues and concerns about policies that were not taken on board in the revised country cooperation framework (CCF), like developments affecting the greenbelt project and the provision of 200,000 hectares+ of land by government to the private sector. At that stage the CCF (2013) had 35+ policy commitments, but the current one (2015) has 15. Some of the observations made by the report may still be relevant, especially on the greenbelt initiative, but they do not apply to the New Alliance. There are also questions about the authenticity and methodology of the report as some of the cited sources of information, like CISANET, have disowned comments attributed to them and went on to conduct their own investigations on the matter. The second study by CISANET et al, titled ‘Can the G7 New Alliance reduce hunger and poverty in Malawi?’, argues that the needs of resource poor smallholder farmers are being compromised by government priorities for agriculture reform that have been shaped primarily by agribusiness. Two or three examples have been cited and these are given below: i)

Government is insisting on fast tracking new land legislation that has potential for increased concentration of land ownership; ii) Government has prioritized to fast track legislation to protect the rights of commercial plant breeders, instead of scaling up seed bank provision, supporting local seed markets, and protecting the rights of farmers to use, save and exchange farm-bred seeds. iii) New Alliance companies are not reporting on the quality of jobs created and compliance of their business operations with the Principles for Responsible Agriculture Investment and the Voluntary Guidelines on the Responsible Governance of Tenure of Land, Forests and Fisheries, and how their investments are contributing to food and nutrition security and climate resilience. Many of the concerns of the civil society in this second study are relevant and have been addressed in the revised New Alliance 2015 CCF and this year’s annual report. For example, on reporting, it is has been mentioned that Malawi Mangoes Ltd, one of the New Alliance companies, is the first and only Rainforest

 15 

Malawi New Alliance 2015 Report 

Alliance certified banana and mango farm on the African Continent. It is important to note that the civil society, despite some shortfalls in their monitoring capacity and quality of their studies, should continue to monitor the work of the New Alliance and work with other stakeholders to improve its implementation in the country.

 16 

Malawi New Alliance 2015 Report 

Annex 1:

Progress on implementing government policy commitments by August 2015

POLICY COMMITMENT AND COMPLETION TARGET 1.

2. 3. 4. 5.

6. 7. 8. 9. 10. 11. 12. 13.

Review the key enabling policies by December 2015

Agriculture policy

Industry policy Trade policy Review Control of Goods Act to eliminate export bans and improve licensing e.g. duration, by September 2016 Support farmer aggregation by formulating a Special Farmer Organisation Development strategy by December 2016 Develop strategy and legislation for contract farming by September 2015 Implementation of financial sector development strategy: make the Export Development Fund (EDF) more effective and develop low cost and long term finance opportunities by September 2016 Review taxation regime and its implementation in order to maximise incentives to investment by November 2015 Identify land, in phases, suitable for large scale commercial agriculture (3,000 ha/year from 2013) every year Enactment of the new Land bill into law by July 2015 Reviewing of seed policy, strategy and certification system (Seed Act 1996) by September 2015 Develop fertiliser regulatory framework by December 2015 Ensure that irrigation infrastructure designs accommodate prioritised crops by December 2016 Prioritise rural feeder roads to primary production areas of prioritised crops in growth clusters by December 2015 Introduction of agricultural zoning based on priority crops and growth clusters by December 2018  17 

Rank

BRIEF COMMENT

3

Finalising policy document

3 3 1

Finalising policy document Finalising policy document Discussion on appropriate studies and TORs finalised and procurement underway Preliminary discussions underway on approach

0 2 2

Finalising validation EDF independent of RBM and running; base lending rate reducing; more low cost funds being set up

1

Discussion on appropriate studies and TORs are underway

1

Surveys began and completed in one district

2 1

Bill finalised, submitted to Parliament for approval Policy consultations finalised, but uncertainty on timing for especially strategy and certification system Consultations started, but unlikely to meet target Area covering this is increasing as 10,000 ha have been developed in 2014/15 across the country Identification of roads completed; procurements also completed but phased approach Exploratory discussions underway

1 3 1 0

Malawi New Alliance 2015 Report 

14. 15.

Reorganise extension services to improve delivery of modernised marketoriented agricultural extension services by December 2016 Improve advocacy for the growing and consumption of more nutritious food crops and agro-processed foods by December 2016

1 2

Strategies under discussion; training and recruitment underway Policies and strategies in place; outreach covered more than 50 percent of the 28 districts

  Key on ranking: ‘3’ is for ‘on‐course/finished’; ‘2’ good progress; ‘1’ normal progress; and ‘0’ no progress. 

 18 

Malawi New Alliance 2015 Report 

Annex 2:

Success factors and challenges on policy commitments

1.

POLICY COMMITMENT Review the key enabling policies (agriculture, trade and industry)

SUCCESS FACTORS/CHALLENGES Dedicated leadership by portfolio Ministers and senior management; and good financial and technical support from cooperating partners has led to progress

2.

Review Control of Goods Act

3.

Support farmer aggregation by formulating a Special Farmer Organisation Development strategy Develop strategy and legislation for contract farming

It was waiting for trade policy in (1.) above but procurement processes have started as the trade policy is now in final stages of completion. Limitations in financial and technical support hindering progress

4. 5.

Implementation of financial sector development strategy

6. 7.

Review taxation regime and its implementation Identify land, in phases, suitable for large scale commercial agriculture

8.

Enactment of the new Land bill into law

9.

Reviewing of seed policy, strategy and certification system (Seed Act 1996) by September 2015 Develop fertiliser regulatory framework Ensure that irrigation infrastructure designs accommodate prioritised crops

10. 11.

Dedicated management lead, technical and financial support from donors, and good participation from stakeholders have facilitated progress Presidential involvement; positive dedication of portfolio Minister and senior management; readiness for economic improvements at RBM; and persistent lobbying by private sector have driven progress High level direction ambiguous and limiting progress Positive commitment and leadership in portfolio Ministry; persistent lobbying from the private sector; good support from donor partners, but limited financial and technical support limiting progress Positive commitment and leadership in portfolio Ministry; good financial and technical support from donors and other stakeholders, including private sector; but approval by Parliament remains uncertain given sensitivities of any land reform programme, especially one that may have huge resource implications for successful implementation Dedicated leadership by portfolio Ministers and senior management; and good financial and technical support from cooperating partners has led to progress High level direction not yet clarified Area covering irrigation designs up to farm gate is increasing as close to 10,000 ha ( 9,865) have been developed in 2014/15 across the country

 19 

Malawi New Alliance 2015 Report 

12.

Prioritise rural feeder roads to primary production areas of prioritised crops in growth clusters

13.

Introduction of agricultural zoning based on priority crops and growth clusters Reorganise extension services to improve delivery of modernised market-oriented agricultural extension services Improve advocacy for the growing and consumption of more nutritious food crops and agro-processed foods

14.

15.

Limited financial support hampering progress; otherwise prioritisation work completed for phase one (5 districts) and on-going for next phase (5 districts too). There are 28 districts involved. Both technical and financial support lacking to conceptualise and develop road map for this multi-institutional policy reform Management commitment available but progress slowed down by limited financial and technical support. Dedicated leadership by senior management; strong stakeholder collaboration and support; but more technical and financial resources required

 20 

Malawi New Alliance 2015 Report 

Annex 3:

Progress on selected private sector commitments

Status of Letters of Intent In total, 27 companies had on-going Letters of Intent with Malawi throughout 2014. Two companies, Rab Processors Ltd and Universal Industries Limited completed their investments intentions in their LOIs; and two other companies, AGCO International GmbH and Press Agriculture Ltd, cancelled their LOIs in 2014. COMPANY Citrefine Plantations Ltd

Limbe Leaf Tabacco Company

Malawi Mangoes

GOALS

2015 PROGRESS UPDATE

Contribute to boosting production of high-value essential oils (such as eucalyptus, geraniums and lemon grass) as inputs for natural insect repellents and cosmetics Promote wellbeing, financial security and environmental sustainability in tobacco production and handling through investment to expand LLT’s farmer contracting programme and increase the average maize yield; and provide prefinancing and guarantees, inputs, technical extension services, and water management training, as well as support for a long-term reforestation programme.

- Target area of 200 ha planted. - Expenditure within budget allocated by investors - 3.8 tons of oil achieved (of a potential 4.5 tons).

Deliver positive development outcomes to Malawians through a viable commercially-driven fruit-processing agribusiness.

- became the only Rainforest Alliance certified banana and mango farm on the African Continent. - Completed first delivery and signed contracts with major international customers. - Established 2nd farm (195-hectare fully operational drip

 21 

- Access to financing for seed and inputs for food crops to contracted growers. - Provision of high quality certified seed to contracted growers resulted in incentives for production of maize, soybeans, groundnuts and dry beans. - Food security was considered achieved through attention constraints on maize production.

Malawi New Alliance 2015 Report 

Monsanto

National Smallholders Farmers’ Association of Malawi (NASFAM) Panthochi Seed Company

Contribute to strengthening hybrid seed, vegetable and crop-protection product value chains Improve the livelihoods and market access of smallholders Improve access of local farmers to high-quality certified seeds

irrigated mango and banana farm). - Increased brand recognition and business growth in maize sales. - Submitted the regulatory dossier for Bollgard II cotton - Near completion of a 2,000 sq metre warehouse/factory space. - Added basic and certified seed to their seed revolving fund amounting to $493,753. - Established productive contacts with out-growers; empowered existing growers on choice of products to supply; promoted and improved brands

RAB Processors

Expand the market for smallholder produce by investing into the processing of fortified and nutritious food products

- Completed the project investment and commissioned the production plant. Initial product launch successful.

Tapika Food Products

Expand the market for smallholder produce by investing into the processing honey for local export markets

- Lobbied for funding, reached over 600 bee keeping families in three districts, and teamed up with UNIDO for Entrepreneurship development.

Universal Industries Ltd

Contribute to value addition of locally-grown commodities

- Complete soya plant installed and commissioned for oil pressing, oil refinery and manufacturing of texturized soya protein (TPC). - Produced new range of added value products like extruded Soya TVP and breakfast cereals

 22 

CONTACTS: New Alliance Coordinator Ministry of Agriculture, Irrigation and Water Development Tel: +265 (0)1 789 033 Ext 115 [email protected] [email protected]

Malawi New Alliance Annual Report 2015.pdf

2.3 Increased dollar value of private sector investment in the agriculture sector and value added agro- .... Malawi New Alliance Annual Report 2015.pdf. Malawi ...

7MB Sizes 4 Downloads 179 Views

Recommend Documents

Annual Report -
The Women's Fellowship sale started with Achen's prayer on 01.02.2009 after ... to parkal. We visited the orphanage and old age home. .... Telephone. 3,151.00.

Annual Report 2015 - HKEXnews
Mar 24, 2016 - of the club to promote our LED lighting products and energy efficiency ..... It also acts as a supervisor of the accounting documents of the.

2014 ANNUAL REPORT
program offers companies a low-cost, low-risk method to determine the commercial potential behind existing ... CURx Pharmaceuticals is developing a non-oral.

2009/2010 annual report - GuideStar
And that is why Population Media Center's work is more important than ever. There has been ..... PMC continued its 10-year working partnership with Comunicarte, a social merchandising .... PMC's popular blog site, which has more than 100.

annual report - SENS Research Foundation
Apr 1, 2013 - after two days of recovery ... They have begun collecting data confirming ..... in the translation of basic bioscience into affordable and widely.

Annual Report FY15
New bioresorbable embolic bead technology. blocks blood vessels ... technology was developed at the U of M ... companies than at any other time in the history of this office. Please ... to support the University's research and education mission.

2009/2010 annual report - GuideStar
And that is why Population Media Center's work is more important than ever. There has been ..... PMC continued its 10-year working partnership with Comunicarte, a social merchandising .... PMC's popular blog site, which has more than 100.

Annual Report - Disability Rights California
In a continuing bad budget climate, Disability Rights California's ..... companies that promises better online search results for accessible accommodations.

annual report - SENS Research Foundation
Apr 1, 2013 - This is all good news, in itself, and we ourselves have been ..... Buck Institute for Research on Aging, Novato CA ..... Albert Einstein College.