Sub-Saharan Agriculture: Insult is added to injury in Malawi as unpredictable weather patterns devastate hopes for a decent harvest.
Malawi is the 4th poorest country in the world by GDP per capita and things go from bad to worse as weather conditions lead to distressing levels of agricultural output.
In the Southern Region of Malawi, drought resistant plants such as cotton and sorghum have long been important crops for the struggling, agriculture-based local economy. Today in the Balaka district of Malawi, these crops and others like maize, groundnuts and cassava, are among the most popular seeds to plant for the average smallholder farmer. Unlike the Central and Northern Regions of the country, where many choose tobacco, tea, sugar or coffee, the people of Balaka are forced to go for the lower per-hectare earners due to the hot and dry climate.
Toleza Agricultural Enterprises is a company that owns and manages private estates with a variety of agricultural businesses such as livestock, agronomy, bio-fuel production, and cotton processing. One such estate is Toleza Farm , which is located in the middle of the Balaka district, and like many of the local people in the region, it focuses on crops that are suited to the weather conditions in the area. A long-time employee of Toleza recalls: “The rains have always come in the middle of November and stayed with us till late March. We don’t get much rainfall but with the sun providing the afternoon heat after the morning rain, these are good conditions for growing maize and cotton”. Figure 1 shows average rainfall between 2000 and 2012.
In recent years, however, the rain gods have not been kind to the people of Malawi, who in 2013 waited till mid-January for planting rains. In 2014, much of the Southern Region received over 1,000 millimeters of rainfall (above annual average annual) within a 2-week period, leading to intense flooding, soil erosion, poor crop yields, and food shortages. 
Climate change awareness is not very high in Malawi, however, Toleza management had noted the risks it presents, and has started mitigating these risks through various initiatives.
- Short rain seasons lead to immature crops when the harvest comes around.
- Mid-season dry spells interrupt crop development.
- Lower than average precipitation (even if constant) still leads to stunted plant growth.
- Extreme rainfall causing severe floods that disrupt agricultural activity.
- Persistent heavy rains leading to blocked roads and disturbing transportation of agricultural goods.
Steps taken by Toleza:
Conservation tillage – Soil cultivation method in which the crop residue is left on fields before planting the next crop in order to reduce soil erosion and rain-water runoff, see Figure 2.
Figure 2 – Conservation tillage .
Increased irrigation hectarage – Toleza made an investment in irrigation equipment taking the total irrigated area from less than 10 hectares to over 50 hectares in two years.
Investment in road network – Toleza revamped its road network to allow truck access to the estate and ensure continued operations even in the event of a tropical storm.
As a major grower in a country with an average farm size of less than 1.5 hectares, for Toleza, climate change presents an opportunity to increase the significance of its role as a producer of food. Most farms will not able to make the large investments required to mitigate the risks associated with the crescendo of unpredictable weather that may lay ahead.
In addition to the steps described above, there are several other points that Toleza could consider as it attempts to ensure its sustainability through the effects of climate change:
Diversifying by investing in land in more favourable growing areas – At the moment the enterprise has around 2,500 hectares of land across three locations, two of which are within Balaka and one in the Central Region of Malawi. Further investment in additional land is in the plan, however, the company should try to de-risk its investment by acquiring land in more diversified locations.
Focusing more resource on growing the Livestock business – Whilst droughts and floods are bad for all agriculture business, the effects are amplified in agronomy relative to livestock, which currently accounts for less than 20% of the overall business.
Transition processing business units to use purchased rather than produced goods – To take away the risk associated with challenges of growing crops, the cotton ginnery, sunflower seed oil mill, and maize mill, could all run on agriculture produce that is purchased from other farmers rather than grown. Though the price of this inventory would be higher, production risks will be reduced.
Despite the challenges of changing weather patterns on agriculture in Malawi, Toleza remains in a good position to capitalize on its scale and mitigate climate change risk. The question that comes to mind, is how much more innovative will the agricultural sector in Sub-Saharan Africa have to be in the future? Far more urgent however, is how do the smallholders ensure they do not fall behind.
Student comments on Sub-Saharan Agriculture: Insult is added to injury in Malawi as unpredictable weather patterns devastate hopes for a decent harvest.
Interesting article Adam. I actually remember reading about the floods in Malawi early last year and how they affected over a million people, I few hundred died if I remember correctly. We experienced a very similar story in Colombia a couple years ago. I can see the company you are discussing here, Toleza Agricultural Enterprises, can thrive despite the recent challenges in Agriculture because they have the economic strength to shift to other practices as you mention… but what are your thoughts on how the small/middle size farmer could succeed under this changing climate conditions? In some countries, such us the US, agriculture is heavily subsidised and therefore more reactive to this issues and given the economic reality in Malawi I would say it is not the case, but please correct me if I’m wrong. How is the government responding to this issue?
That’s a great observation Angelica and that’s the point that I alluded to at the end of the post. As you can see, for a large company there are a variety of options although non of them are easy and all of them require significant upfront investment. With the exception of conservation tillage which could be done on a small scale and at little cost, the smallholder farmer is not able to apply any of the other steps taken by Toleza or recommended by me. What is the government doing? Another good question! There is little evidence that the government has updated its policies to account for climate change, however, Malawi has been running a program called “Farm Input Subsidy Program” to enhance food production. This program was introduced in 2005 and essentially anybody can register to grow a certain area of maize which is the staple food in Malawi, and receive fertilizer from the government equivalent to the registered area. After 10 years, whilst this program is considered to be of huge importance for food independence in Malawi, critiques question its long-term viability and effectiveness.
In light of your response about the limited steps that smallholder farmers are taking, I’d be interested in better understanding your recommendation that Toleza transition processing BUs to using goods that are purchased from farmers, rather than grown by the company. If Toleza’s efforts help its own crops prosper despite worsening climate conditions, doesn’t shifting to purchasing from farmers that do not use these techniques open Toleza’s processors to substantially more risk that, in a bad year, there could be insufficient crop available (or that input prices would skyrocket)? Or is there a reason why separating the value chain is actual advantageous to Toleza’s processors that I’m not seeing?
I also wonder if any of Toleza’s understanding of best practices can/should be translated to nation-wide government-funded (or externally-funded) efforts to protect farmers overall, beyond the existing subsidy program?
Thank you for writing about this!
Great conversation, guys. I agree that the most interesting part of this case is trying to understand what it means for the small farmers in Malawi. Has accelerated climate change made it too difficult for small, independent farmers to survive in this environment? Would it make more sense for these small farms to be consolidated by companies such as Toleza? I think you could structure the consolidation so that most of these farmers remain employed. But in a society where these people have been independent subsistence farmers for generations, is this alternative even viable?
Thanks for your comments Leah and Will. Starting with your point Leah, it is true that there is somewhat of a paradox in going after the produce of smallholders as a de-risking strategy, particularly as they are the ones more badly hit by climate change. My reasoning, which stems purely out of economic risk and reward for Toleza, is based on there being less risk in simply ginning cotton rather than growing and ginning it, particularly if the growing side is likely to make losses. This of course depends on there being a sufficient national crop in a given season, or else market forces may drive prices beyond reasonable levels for competition on international markets. So in short, there’s a risk in de-linking this chain, but from my experience in the industry it is much smaller than the risk of investing in high yields across large areas and falling well below breakeven yields.
Will, I wouldn’t say that climate change alone has brought us to this stage. Other factors such as exhausted levels of soil nutrients in the land, as well as very limited advances in farming methodology or technology over the past decades, also have a direct impact on smallholder farmers. The question you raise is very interesting and the benefits could be large. I suspect, however, that the difficulty in doing this would be (as you say) the great underlying change to generations of subsistence farming.
Adam, thanks for this thought-provoking piece. I appreciated the deep lens you provided into the modern-day challenges of smallholder farmers in Malawi, particularly around erratic weather. At Gro Intelligence, we were routinely working with governments and ministries of agriculture with these challenges and often found communication gaps to be a recurring issue. Even if governments were aware of developing situations (worsening drought, onset of heavy rains), the odds of proper dissemination of that information to businesses like Toleza and perhaps more importantly to individual farmers was small.
The one recommendation I was a bit confused by was devoting more resources to livestock. You mention effects are amplified in agronomy – wouldn’t the ‘bullwhip effect’ be even more pronounced in livestock? And given how input intensive breeding livestock is, does it make sense from a sustainability perspective to commit even more resources to meat production when the same amount of resources can produce a much greater amount of caloric energy of another commodity? I find this to be particularly important in subsistence-farming regions, like Malawi.
One potential solution to the broader weather problem could be mobile technology. The mobile market in sub-Saharan Africa is a massive opportunity, and can serve as a medium to share critical weather information with farmers who would otherwise not have access to such data. Additionally, this could solve the communication gap that often exists between governments and market participants. https://gallery.mailchimp.com/30731ba6941f8414ea83c3aec/files/Gro_Mobile_Apps_Sept_18_2015.pdf
Thanks for your comment David. Addressing the point around investment in livestock: Were Toleza’s goalposts changed to supporting Malawi’s food production in an effort to fight poverty, then yes, it would not make sense to investment in livestock. However, from an economic perspective of the company, livestock has the potential to be a higher-earner during years that experience adverse weather conditions. The weather’s impact on livestock is limited, as the greatest threat is lack of grazing material to take the cattle through the dry season. Of course, having to buy additional food for the cattle is not cheap, but in comparison to preparing land, planting, weeding, spraying and harvesting, only to end up with low yields, the fluctuation in performance is not as extreme. In relation to your point about mobile technology, it is true that digital handheld technology is starting to disrupt markets in Sub-Saharan Africa, in agriculture and other industries as well. In addition to sharing weather information and providing a platform for communication between stakeholders in the industry, we are starting to see mobile technology that deals with best farming practices being used in the fields. This includes taking pictures of the crop or pests and sending to a “agri-doctor” for diagnosis and recommended action.