SMALLHOLDER RICE FARMERS IN MALAWI CAN BE PROFITABLY INCLUDED

Rollins Chitika

Outlook

• Introduction

• Learning from an Inclusive Rice Business Model

• Exploring Key Actors in the MHL Value Chain

• Benefits Accrued to MHL Value Chains

• Benefits of including Smallholder Farmers

• Understanding the target group

• Challenges and Lessons Learnt

Introduction

Improved technology

Change in Modus Operandi

Millions displaced

Introduction (Cont’d)

• Inclusive value chains are relevant.

• BUT– Can small-scale producers, artisans, traders be

part of this change? – Does their inclusiveness contribute to the

profitability of the entire sector in the long-run? – Is it possible to have even other members of

the value chain benefit from being part of it?

Learning from an Inclusive Rice Business Model

• MHL Rice Processing

– $17.5m investment

– 200MT/day processing

– 70ha scheme

– 7, 000 smallholders

Benefits Accrued to Key Chain Actors

Benefits of Including Smallholder Farmers

• Access to land

• Access to inputs

• Mechanized farming

• Company ownership by smallholder farmers

• Access to modern agricultural extension services

• Increased household income

Understanding the Target Group

PPI Score% of the respondents

(Before)% of the respondents

(After)10-14 515-19 530-34 20 1035-39 25 2040-44 15 2045-49 15 1050-54 15 1560-64 5 1070-74 5 5

The majority have the likelihood of 77.5% living below a poverty line of $1.25 both before and after joining the scheme.

Key Challenges

• Huge factory capacity (200MT/day)-need for more

rice.

• Side selling

• Support for smallholder shares (40%)-to be

redeemed over time.

• MHL could not be supported with a start up

capital and this affected the take-off.

Lessons Learnt

• The poor were thoughtfully considered in developing this value chain.

• As the value chain develops, the benefits are also translated to all players (including the resource poor farmers).

• The initiative is likely to boost production in the long run.

• Though the poor are already disadvantaged because of lack of resources, if well included they can help drive development.

Full Article

http://developmentbookshop.com/commercial-and-inclusive-value-chains

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