GROUNDNUT VALUE CHAIN IN MALAWI: Challenges and research opportunities

Draft

March 2013

Table of Contents
Table of Contents.............................................................................................................................2 1.0 INTRODUCTION....................................................................................................................3 1.1 What this report is for................................................................................................................3 1.2 Groundnut production in Malawi..............................................................................................3 1.2.1 Why groundnuts in Malawi....................................................................................................3 1.2.2 Groundnut producing areas in the country.............................................................................4 1.2.3 Production and export of groundnuts.....................................................................................5 2.0 GROUNDNUT VALUE CHAIN ACTIVITIES AND PLAYERS..........................................6 2.1 Value chain activities.................................................................................................................6 2.1.1 Production...............................................................................................................................6 2.1.2 Assembling and trading ........................................................................................................8 2.1.3 Processing and exporting.......................................................................................................8 2.2 Chain players in the groundnut value chain and their interests.................................................9 2.2.1 Input suppliers........................................................................................................................9 2.2.2 Smallholder farmers..............................................................................................................11 2.2.3 Intermediate traders and small traders..................................................................................11 2.2.4 Processors and exporters......................................................................................................12 2.2.5 Consumers............................................................................................................................13 2.2.6 Value chain service providers..............................................................................................13 3.0 OPPORTUNITIES AND CHALLENGES FOR GROUNDNUT VALUE CHAIN..............16 3.1 Challenges and Constraints of the groundnut value chain.......................................................16 3.1.1 Production related constraints...............................................................................................16 3.1.2 Post harvesting handling constraints....................................................................................18 3.1.3 Marketing constraints...........................................................................................................18 3.1.4 Processing constraints...........................................................................................................19 3.1.5 Financing constraints............................................................................................................19 3.1.6 Policy related constraints......................................................................................................19 3.2 Opportunities in the groundnut value chain.............................................................................20 4.0 CURRENT RESEARCH EFFORTS IN GROUNDNUTS.....................................................21 4.1 Research work in groundnuts.................................................................................................21 4.2 Possible research topics...........................................................................................................22 5.0 RECOMMENDATIONS.........................................................................................................23 5.1 Conclusions and recommendations.........................................................................................23 5.2 Key stakeholders for the national workshop...........................................................................24 6.0 ANNEXES...............................................................................................................................26 6.1 List of organizations to be invited for the stakeholder research workshop.............................26

1.0

INTRODUCTION

1.1 What this report is for This report presents findings from a desk study of the groundnut value chain in Malawi. The report sets the pace for identification of possible areas for research and improvement of the value chain and it describes the various value chain activities and key players in the chain as well as the challenges the chain is facing. The paper identifies and makes some recommendations for possible research areas that NASFAM and its various stakeholders could focus on in order to improve the performance at each stage of the value chain.

1.2 Groundnut production in Malawi

1.2.1 Why groundnuts in Malawi Just as other legumes crops, groundnuts remain one of the key crops grown by smallholder farmers in the country. Groundnut remains one of the cash and food crops grown in Malawi. With the declining tobacco market and increasing pressure by main buyers of Malawi Tobacco lobbying for stopping production of tobacco, groundnuts stands out to be one the key crops to be grown by smallholder farmers more especially women. Many researchers agree that groundnut shall continue to remain the key cash and food crop because of a number of reasons. Sintowe, et.al, 2011, Sangole et.al, 2010 and Chirwa, 2009 indicate that groundnut is an important component of both rural and urban diet through its provision of valuable protein, edible oil, fats, energy, minerals, and vitamins. Apart from providing cheap sources of vitamins and proteins, groundnuts fix nitrogen and enhances the soil fertility which in turn reduces use of fertilizer. Groundnut is also used as a source of livestock feed and increases livestock productivity as the groundnut haulm 3

and seed cake are rich in digestible crude protein content (Simtowe et al, 2012). Groundnut is one of the major foreign exchange earners for the country and makes one of the key crops for the country.

1.2.2 Groundnut producing areas in the country Groundnut is grown in many districts in the country but central region districts which include Lilongwe, Kasungu, Mchinji, Dowa, Ntchisi, Salima, Dedza are the main producing areas. Over 70% of the crop is grown in the central region usually grown as an intercrop or monocrop but rotated with maize and other crops often. Groundnut is produced under rainfed conditions and usually under subsistence farming which has its own considerable challenges. Up until the late 1980s, groundnut was one of the major export crops in the country with ADMARC as major exporter. Being the sole traders that time, ADMARC was able to provide required inputs such as quality seed, pesticides and was supported by the robust Ministry of Agriculture extension system that used to provide technical advice and support to the smallholder farmers. However, the liberation and structural adjustment policies which the government followed with advice from the IMF and World Bank weakened the capacity of ADMARC to procure and export groundnuts at the same time provide the required inputs for groundnut production. Coincidentally the agricultural extension system by the government received less support during the same time and declined. The departure of ADMARC as a key buyer and supplier of inputs and the dwindling extension services, left the vacuum which affected the availability of ready market for groundnut for smallholder farmers and supply of inputs for groundnut production. The gap left by ADMARC and the dwindling

extension services have contributed to the decreasing production of groundnuts in the country.

1.2.3 Production and export of groundnuts Makoka, 2012, Sintowe, et.al, 2012 and Sangole, et.al. 2010 reveals that groundnut production has been increasing at decreasing trends. For example, between 1961 and 2005 there was an average annual growth 3.4% under groundnuts (i.e. from 159,000 ha in 1961 to 267,000 ha in 2006). According to Sangole, et.al, ibid, the growth in area under groundnut was charecterised by significant variation with the smallest cultivated area recorded in 1990 where only 50,000 ha of groundnut were grown due the collapse of the groundnut export market resulting from high levels aflatoxin contamination and the impacts of the liberation and structural adjustment policies.

25,000 Groundnut 20,000 Pigeonpea Soybean 15,000

10,000

5,000

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Figure 1: Malawi Legumes Export (MT), 1998-2009 ( Source: Donald Makoka, 2012)

Figure 1 shows a marked increase in the export volumes of groundnut, between 1998 and 2009 from less than 5,000 MT to around 20,000 MT in 2009 but the increase is not significant enough to boost the export market. 5

With the dwindling market for tobacco globally, groundnuts has the potential to contribute significantly to the export earnings of the country. The country used to have a good reputation for its high quality Chalimbana variety and was an important exporter but with problems of aflatoxin in the 1980, coupled with the structural adjustment policies, exports declined. Exports from Malawi mainly target the SADC region while the European market is still problematic for companies that cannot control the level of aflatoxin in groundnuts. Currently NASFAM Commercial through the Fair trade arrangement is able to export groundnuts to the European market.

2.0GROUNDNUT VALUE CHAIN ACTIVITIES AND PLAYERS

2.1 Value chain activities The groundnut value chain broad activities include production, processing and marketing. For the chain to operate effectively, it has a number of supporting and advisory activities which include technical, financial, business, regulatory, input and export services as well as policies and legislations. In this section an attempt has been made to describe the various value chain activities and key players involved in the chain.

2.1.1 Production As already alluded to above, the main producing areas of groundnut in the country are the central region district even though the crop is grown throughout the country. Over 100,000 smallholders farmers more especially women comprise the majority of the producers of groundnuts. CYE Consult quoted in Makoka, 2012 revealed that around 93 percent of groundnut in 6

Malawi is grown by smallholder farmers, with the remaining 7 percent being produced under the estate sub-sector. Commercial legume production remains undeveloped in the country. Sangole et.al, 2010 reported that smallholder farmers in the value chain can be categorized into two distinct groups: those that are organized into groups and operate in clubs, associations and cooperatives; and those that operate individually. With support from the civil society organizations and government, some farmers have been organized into groups which operate in the teams of 10-15 per club, several clubs form an association and one or more associations form a cooperative. Farmers preference and availability of the market influence the groundnut variety to be grown by the smallholder farmers. For example most of the cultivated groundnut varieties are CG7 and Chalimbana and these are high value and varieties that are on demand on the market. Various organizations are promoting groundnut varieties that smallholder farmers can grow. NASFAM is one such organization which is promoting the growing of ICGV SM 90704 (nsijnjiro) also known as Chalimbana 2000 which has characteristics of both CG7 and local Chalimbana varieties. The big challenge is that the majority of the local groundnut varieties are low yielding and less resistant to diseases and pests. More often the smallholder farmers use locally made implements such as hand hoes to cultivate and harvest their crops and very few have access to input such as pesticides. Activities such as harvesting, drying and shelling are mainly carried out by women; men usually prefer taking the groundnuts to the market than shelling and drying. LongweNgwira et.al, 2012, concluded that groundnut production has not kept up with the demands both local and export markets especially in terms of volumes over time which is attributed to low average yields resulting from continuous use of unimproved seed. This has in turn affected the countrys groundnuts exports over time. 7

2.1.2 Assembling and trading After the farmers have dried their groundnuts, there are different types of buyers who either buy at farm gate or market place after the groundnut has been brought to a market centre. Usually small traders or middle men move around the villages to buy the groundnuts. Most of them are sent by or sell their groundnuts to large scale buyers such as Mulli Brothers Limited, Globe Limited, Farmers World, Rab Processors, and NASFAM who set up buying points in the villages and market centres to buy the groundnut. More often the small scale buyers/vendors also set up their own buying points and control the price per Kilogram they offer to the farmers. More often they are exploitative because they offer low prices but they offer a ready market for the smallholder farmers as they buy at the farm gate and help the smallholder farmer save on transport to the market. Usually farmers sell individually to the vendors and have a weak bargaining power compared to selling in a group.

2.1.3 Processing and exporting Groundnuts undergoes through various processing activities. For example after harvesting, groundnuts are cleaned to remove foreign materials and graded according to different sizes. At this point some of the groundnuts is packed and sold. Other companies go beyond the packing stage to process the groundnuts further into roasted nuts, peanut butter, paste, oil and animal feed (groundnut cake). Over the years, the market for groundnut cake has declined due to high levels of aflatoxin in the groundnuts which affect buyers interest to buy. Many companies such as SSV Oil Company LTD in Lilongwe stopped producing oil from groundnuts because the company could not find market for the seed cake.

The majority of processors are also exporters of various products of groundnuts to regional and global markets. Organization and companies like NASFAM, Bharat Trading, Lab Processors process and export various ground nut products. From figure 1 above, it can be shown that the export of groundnuts increased during 1998 and 2009.

2.2 Chain players in the groundnut value chain and their interests This section summarizes the key value chain players in the groundnut value chain in terms of their role, interests and expectations. The chain players have been categorized into input suppliers, smallholder farmers, buyers and processers,

2.2.1 Input suppliers Seed companies The country has a number of seed organizations and companies such as SEEDCO Malawi, MONSANTO, DEMETER, PANNAR Seed, Farmers World, NASFAM and others who are multiplying seed from both the global and national research centers. These companies subcontract individual farmers and companies to multiply their groundnut seed. Even though there are a number of seed companies, availability of quality seed to the rural farmers is still a challenge. Agro-dealers Over the past six years, there has been an increased growth in numbers of agro-dealers in the country. This can be attributed to the underperformance of ADMARC which used to be the sole supplier of inputs. The introduction of an AGRA funded agrodealer project by Citizens Network for Foreign Affairs (CNFA/Rural Market Development Trust (RUMARK), the agro-dealer networks 9

in Malawi have greatly improved. The agro dealers have helped to fill the gap left by ADMARC more especially in the rural areas. However the biggest challenge is that most agrodealers prefer operating in areas with easy access and good road infrastructure network leaving out the remotest areas of the country. Some of the notable agro dealers include NASFAM, Kulima Gold, Farmer World, Agriculture Trading Company (ATC) and others. Some of the Agro Delears have a network of satellite depots scattered in many parts of the country. For example Kulima Gold, Agricultural Trading Company, NASFAM and many others have network of input selling depots throughout the country. As already alluded to, the remotest parts of the country are poorly served by the agro-dealers. Groundnut seed is also available in Agricultural Trading Company (ATC) shops and in NASFAM shops. The network of agro dealers has helped to standardize the input prices and farmers have a wide choice of which agrodealer to get their inputs. The ASSMAG (Association of Smallholder Seed Multipliers Action Group (ASSMAG)) also provides groundnut seed and other legume seed to farmers mainly those who are members of the association. Membership is not free, all members have to pay a membership fees. The association produces or multiplies groundnut seed on contract for seed companies. The input suppliers have the infrastructure such as warehousing, processing, transport; training facilities, human resources (sells personnel) and financial resources to enable them carry out the seed supply and distribution activities of the value chain.

10

2.2.2 Smallholder farmers With over 93% of the groundnut produced by smallholder farmers, smallholder farmers constitute a biggest and most important group of stakeholders in the groundnut value chain. Smallholder farmers either operate in groups or individuals. Over the past years CSO and some companies have helped to organize the farmers into groups to ease service delivery and strengthen bargaining power of the farmers. NASFAM has been the biggest player in farmer organization in the country. Organizations like One Village One Product (OVOP) are promoting value addition at community level and are therefore encouraging farmers to process their groundnut into oil. Because farmers are usually not organized, their participation in the value chain is limited. There are some efforts by organizations such as NASFAM who have facilitated and mobilized smallholder farmers into sustainable groups and associations and these association sales their groundnut to big traders. Out of the 100,000 groundnut farmers, about 15,000 farmers operate in groups and associations meaning that 85% of the smallholder farmers remain unorganized and therefore cannot fully and effectively participate in the groundnut value chain.

2.2.3 Intermediate traders and small traders The interest of this group of players is to make quick money before the smallholder farmers take their groundnut to big markets of big buyers. They always go to the farmers early mostly at the time when the farmers have just harvested their crops and want quick cash. They buy both shelled and unshelled groundnuts. They are usually the first customers of the smallholder farmers who buy and sell to assemblers at slightly higher prices than what they pay to the smallholder farmer. Some big buyer subcontract these small traders or vendor to buy the groundnuts for them. They usually have small capitals and cannot buy in large quantities but they are always having the market information which they use to cheat the smallholder farmers. The group is not organized and they usually operate as individuals. 11

The intermediate traders usually have larger capital to invest for groundnuts and are usually based at the trading centers. They usually have high levels of market information which they use to their benefit at the expense of the farmers who have limited knowledge of where to sell their groundnut and at what price. More often they are the ones that set the price for the vendors. In order to maximize their gains the vendors deflate the prices in order to make profit. The intermediate buyers interest is to make profit with minimal costs. They buy relatively larger quantities of groundnuts than the vendors. The group has limited interest on the farmers future capacity to produce the next crop of groundnuts.

2.2.4 Processors and exporters A number of big companies and organizations belong to this group of players. The majority of them have the capacity to buy the groundnuts from the traders, value add and export. Such organizations and companies include, NASFAM, Mulli Brother Limited, Tambala Food Products, Export and Trading Company, Rab Processors, and some big individuals from both within the country and outside the country. These processors and exporters, expect to procure big quantities of good quality groundnuts from farmers which most of times are failing due to low production. If there were more organized smallholder farmer groups, selling directly to the processors and exporters would be more lucrative because the prices are usually higher than selling to vendors. For examples the prices offered by NASFAM were said to be relatively higher compared to that offered by vendor. One farmer said, If we can be selling to processors and exporters directly, we will be assured of the ready market and good prices for our groundnuts. The processors are interested in adding value to the groundnuts where the groundnuts is shelled, sieved and graded and made into various products 12

such as peanut butter, salted nuts, paste, oil, seed cake for animal feed and other products. The high levels of aflatoxin in groundnut are affecting the production of oil and other products. Most of these processors export their value added groundnuts to countries in and outside Africa.

2.2.5 Consumers Groundnut and groundnut-based confectioneries are consumed mostly locally. The confectioneries, including peanut butter and nuts are available in retail supermarkets and other grocery stores all over Malawi. However, some of the shelled groundnut is exported to regional markets, including South Africa, Tanzania and Kenya (Makoka, 2012).

2.2.6

Value chain service providers

Research Institutions and academia In Malawi with have both national and international research institutions who are conducting research on groundnuts such as the Department of Agriculture Research, Bunda College of Agriculture, ICRISAT ( The International Crops Research Institute for the Semi-Arid Tropics (ICRISAT)) which have global and national mandates on groundnuts research. These organizations conduct research, training of students and outreach services to farmers. National research institutions such as Department of Agriculture Research Services have the mandate to coordinate research activities at national level and also coordinate with the various international and national research organizations on groundnut research, groundnut seed breeding and multiplication. The research institutions and academia are interested in improving both production and productivity through research and training. They are also involved in conducting and setting the policy research and training agenda and quality improvement of the groundnuts in the country. 13

Key challenges faced by research and training institutions today, are related to limited resources (human and financial) to conduct responsive research and training based on the needs of the smallholder farmers. Civil Society organizations (CSO) and non state actors Many reasons underlie CSO involvement in the groundnut and other seed supply schemes. The key interests include ensuring that the smallholder farmers are effectively participating in the groundnut value chain; and to improve their livelihoods by diversifying their crops, increase their household income base, mitigate the impact of climate change. In addition to providing such services as extension, education, training, CSO also provide seed input to farmers and provide market linkages between the farmers and buyers. CSO and Non State Actors have resources (human and finances) which they invest into promoting groundnut products. However the majority of them are area specific and their impacts are felt in small areas or pockets of the country. Such NGOs as Concern Universal, CARD, Plan Malawi, World Vision International, Oxfam, Action Aid, NASFAM and many others provide seed or make seed available to farmers at affordable prices through their various seed supply schemes. Most of these non state actors work on their own or in consortia through the district councils. They provide their own extension services and collaborate with government extension staff to provide extension services to farmers. Organizations such as MACE (Malawi Agriculture Commodity Exchange), Malawi Export Promotion Council (MEPC), ADL Commodity Exchange and others are playing a leading to link the farmer to the market. It is still a challenge to smallholder farmers to access services of these organizations because many farmers continue to work as individuals and are not organized.

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Several micro financial institutions such as Concern Universal Microfinance Operations LTD (CUMO), FINCA, MUSCO, Micro Loan Finance, MRFC and others are strengthening access to smallholder agriculture loans to farmers usually in groups. Many farmers have benefitted from these institutions; however, the interest rates charged on the loans deter many of the smallholder farmers from accessing the loans. Village Saving and Loans Groups are providing modest and pro-poor loans schemes in the villages. However more research needs to be done to assess the impact of VSL on groundnut production in the country. Government programmes Government programmes such as the Farm Input Subsidy Programme also provide groundnut seed to farmers in order to improve food security at household level. More often the inputs are subsidized and farmers are not expected to pay back. Apart from the various programmes, the government sets out policies and provide overall legal framework for the value chain players and actors to operate. The Rural Livelihoods and Economic Enhancement Programme (RLEEP) is another government programme that aims to sustainably improve the incomes of economically active poor rural households, and individuals engaged in the production, processing and marketing of selected agricultural commodities by promoting commercialization of their operations, and advancing their linkage to the markets. Among its many activities, the Programme is undertaking a groundnut value chain development in Malawi through productivity enhancement and commercialization. Development partners Some development partners have been providing direct support towards the management of aflatoxin in groundnuts. For example UNIDO implemented a national capacity building project for aflatoxin management. Many other 15

development partners are providing support through the CSOs, government departments, research institutions and academia to improve the quality of groundnuts production in the country. The country continues to face big challenges because none of the potential testing laboratories such as MBS, Chitedze and ARET are internationally accredited. Exporters have to rely on international laboratories to certify their groundnuts and related products as aflatoxin free which is big drain on the limited foreign reserves the country has.

3.0OPPORTUNITIES CHAIN

AND

CHALLENGES

FOR

GROUNDNUT

VALUE

An environmental scan of the groundnut value chain reveals that the groundnut value chain in Malawi has a lot of opportunities, challenges and constraints as summarized in the following sections. 3.1 Challenges and Constraints of the groundnut value chain The constraints of the value chain has been groups into a number of categories related to production, post harvest handling, marketing, processing, financing and enabling environment. 3.1.1 Production related constraints From figure 2 below groundnuts production increased between 1998 and 2010 compared to other legumes. Although groundnuts recorded an increase in production levels between 1998 and 2010, the levels are still very low, making it difficult for exporters to negotiate lucrative export deals.

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Fig 2. Production (MT), 1998-2010 (Source: Ministry of Agriculture quoted in Makoka, 2012)

A number of reasons are attributed to low groundnut production in the country including the following: Erratic rainfall and dry spells during critical periods of the plant growth Reliance on small scale traditional groundnut farming husbandry practices Poor access to improved seed materials resulting recycling of planting materials Poorly resources research and academic institutions Limited availability of basic seed for multiplication Limited private sector involvement in improved groundnut seed multiplication Poor crop husbandry practices resulting into levels Low adoption of improved technologies declining soil fertility

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Pest and diseases

3.1.2 Post harvesting handling constraints A number of constraints affecting post harvesting handling of groundnuts include the following: Continued use of traditional methods of harvesting Limited knowledge in groundnut grading and value addition Shelling methods such as use of water during shelling render nuts susceptible to aflatoxin Use of unimproved storage facilities that increases chances of post harvest losses from pest and disease attach Limited knowledge on proper groundnut handling during drying an shelling

3.1.3 Marketing constraints More often farmers grow their groundnuts anticipating without seriously considering the marketing aspects of their crops. They only consider marketing during and after harvesting. Various constraints therefore affect the value chain including the following: Farmer have limited market information about their groundnuts Farmers sell their crop as individuals and lack of collective bargaining power Lack of business skills for commercial farming and aflatoxin management High storage costs and transportation Luck of honesty by the traders more especially the vendors who tamper with their weighing scale Inadequate volumes to meet the national and export demands 18

Poor road and market infrastructure No price differentiation for quality hence affecting the farmers motivation for high quality which can provide them with a better price. Low profits realized from groundnuts

3.1.4 Processing constraints Amongst the many constraints affecting groundnut processing include the following: There is very little value addition amongst the processor High maintenance cost for groundnut processing equipment is highlighted as one of the key constraints Groundnut produces less oil compared to other legumes such as soya beans and therefore is not attractive for processors to produce oil. High levels of aflatoxin affects the market for the groundnut seed cake which feed for livestock

3.1.5 Financing constraints Access to credit facilities such loans by smallholder farmers more especially women who are the majority groundnut farmers is very limited. If accessed the interest rates are very high. The majority of the rural population is not banked and has little information on the existence of microcredit facilities that could easily support them with limited interest rates.

3.1.6 Policy related constraints Limited participation of private sector in groundnut production Weak partnership and linkages between the private sector and government on groundnuts as it is in the tobacco industry Lack of accredited laboratories for groundnuts quality certification in the country. 19

3.2 Opportunities in the groundnut value chain The groundnut value chain in Malawi has a lot of opportunities which if utilized effectively, can improve the industry. Some of the identified opportunities include the following: There are a number of regional trading opportunities that can be exploited. The regional trading blocs, including SADC and COMESA offer excellent opportunities to promote regional trade in legume crops. Persistent problems in tobacco marketing offer an opportunity for

smallholder farmers to switch from tobacco to high-value legumes, such as groundnuts. Governments commitment to increase agricultural productivity and

diversification is an excellent opportunity to boost the production of legumes. The Malawi Growth and Development Strategy (MGDS, 2011-2016) emphasizes on agricultural diversification and increasing the production of high value agricultural commodities for exports to promote food security, economic growth and wealth creation. The Agricultural Sector-wide Approach (ASWAp) of 2009, puts a strong emphasis on commercial agriculture, agro-processing and market development. As such, agro-processing for value addition is a priority programme within the Ministry of Agriculture. This is another opportunity to promote value-adding for groundnuts. The National Export Strategy is promoting legumes, such as groundnuts and soybean for value addition and exports. In particular, the strategy is has 20

been developed under the premise that groundnut and soybean products are among the products with highest potential for collaboration among local stakeholders. There are many players such government, non state actors, SCOs and development partners who are supporting production of groundnuts and participation of farmers in the value chain. However the sector is still facing serious resource constraints as the investments do not much the demand for the groundnuts. The government and all the other players in the value chain have a big role to play to ensure that every player has space and performs its expected roles in the chain. 4.0CURRENT RESEARCH EFFORTS IN GROUNDNUTS

4.1 Research work in groundnuts A number of research activities are being carried out at national, regional and global levels. For example in Uganda, Miriam Rich of the Office of International Research, Education and Education of Blasburg, Virginia is Mapping the Path of Peanut in Uganda. ICRISAT under the Social Economics and Policy Program carried out a research on Assessing adoption potential of new groundnut varieties in Malawi which started in the late 1990s. Table 1 summarizes some of the research work that has been carried out on groundnut over the past years. It should be pointed out that it was difficult during the time period allocated for the study to get information from the various research institutions on their recent research work on the groundnut value chain. However table 1 summarizes some of the research work that has been carried out or is being carried out.

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Table 1. Summary of research work on groundnuts Research topic Mapping the Path Researchers in Miriam Rich, Office of International Research, Education and Education of Uganda Blasburg, Virginia Technical efficiency in groundnut A. K Edriss and F. Simtowe, Bunda, production in Malawi: An application College of Agriculture, Malawi of a frontier production function Assessing Adoption Potential of H A Freeman, P J A van der Merwe, P New Groundnut Varieties in Malawi Subrahmanyam, A J Chiyembekeza, and W Kaguongo, ICRISAT, Malawi Economic Analysis of Groundnut Vincent Kapopo and Maganga Assa, Production in Kasungu District, University of Malawi Malawi: A production Economics Approach Assessing the Competitiveness of Abiba Longwe-Ngwira , Franklin Simtowe, Groundnut Production in Malawi: A and Moses Siambi, Radboud University Policy Analysis Matrix Approach Nijmegen, The Netherlands; Alliance for Green Revolution in Africa (AGRA), Kenya; and The International Crops Research Institute for the Semi-Arid Tropics (ICRISAT), Malawi of Peanut

4.2 Possible research topics The desk study has revealed a number of research gaps that can help improve the groundnut value chain. It is noted that amongst other challenges farmers are facing are low gross margins from groundnuts; limited value addition, weak bargaining power, high aflatoxin levels in the groundnuts, use of traditional technology, weak institutional set up amongst the small holder farmers and many others. In line with these gaps, a number of research topics are being suggested for the groundnut value chain including the following: To assess the economic value of Value addition and reduction of post harvest losses in groundnuts 22

To assess the how collaborative partnerships can help to control aflatoxin levels in the Malawi groundnuts To determine the optimal input levels for groundnuts for maximizing gross margins To conduct adaptive research on technologies and adoption potential of smallholder farmers for improved groundnuts value addition To analyze the impact of the institutional reforms and the participation of smallholder farmers in the groundnuts value chain

5.0RECOMMENDATIONS

5.1 Conclusions and recommendations The study has reviewed the value chain activities, key players and their interests in the groundnut value chain. The findings reveal that Malawi has a big potential for improved groundnut production and increased participation of the smallholder farmers in the value. However, the groundnut value chain is facing a number of challenges and constraints that need to be dealt with to ensure that smallholder farmers and the country economically benefit. Based on the findings, the following recommendations are being made: The government and its implementing partners and donors need to invest more resources in mobilizing the farmers to operate as a group in order to strengthen their bargaining power. The government and various research institutions should work together to develop and transfer technologies that will improve productivity of groundnuts More training and awareness is required to improve the level of post harvest handling of groundnuts

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More research work needs to be carried out in the areas of technology development, transfer and adoption, value addition, post harvest handling, and farmers institutional strengthening and change management.

5.2 Key stakeholders for the national workshop Annex 1 list names of organizations that can be invited for the stakeholder workshop to define the research questions for the groundnut value chain. The list is not exhaustive but provides an indicative list of organizations that can be invited to the national stakeholder workshop to define the research questions on the groundnut value chain.

References 1. Abiba Longwe-Ngwira , Franklin Simtowe2 , and Moses Siambi, 2012. Assessing the Competitiveness of Groundnut Production in Malawi: A Policy Analysis Matrix Approach. 2. CYE Consult (2009) Report. 3. Donald Makoka, 2012. Status and potential of legumes in Malawi. Paper presented at AICC Legume Stakeholder Meeting. 16-17 February 2012 4. Freeman, H.A., van der Merwe, P.J.A., Subrahmanyam, P., Chiyembekeza, A.J., and Kaguongo, W. 2002. Assessing adoption potential of new groundnut varieties in Malawi. Working Paper Series Value Chain Analysis of Selected Commodities: Institutional Development Across the Agri-food Sector: Malawi, Final

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no. 11. Socioeconomics and Policy Program, International Crops Research Institute for the Semi-Arid Tropics. 5. Ministry of Industry and Trade, 2012. Malawi National Export Strategy (2013-2018). Volume 1. Main Document. 6. Noel Sangole, Tennyson Magombo and Daisy Kambalame, 2010. Groundnut value chain report. Technical report submitted to the National Coordinator Rural Livelihood and Economic Empowerment Program (RLEEP). 7. UNIDO, 2010. Capacity building for aflatoxin management in groundnuts in Malawi. Final report. 2009-2010 8. UNIDO, 2012. Capacity building for aflatoxin management and control in groundnuts. Independent evaluation of the UNIDO Project. UNIDO Evaluation Group. 9. Vincent Kapopo and Maganga Assa, 2012. Economic Analysis of Groundnut Production in Kasungu District, Malawi: A production Economics Approach

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6.0ANNEXES

6.1 List of organizations to be invited for the stakeholder research workshop The list of names provided in this list is not exhaustive. There are many individuals and organizations that are important for the groundnut value chain that needs to be invited for the stakeholder workshop. This list serves provide a framework of which type of organizations to ve invited for the workshop. Category Organization Government of Name of organization Ministry of Agriculture Ministry of Irrigation and Water Development Ministry of Climate Change and Environment Ministry of Trade and Industry Ministry of Finance Parastals Ministry of Economic Planning and Development Export Promotion Council Malawi Investment and Promotion Council Academia University of Malawi Lilongwe University of Science and Technology Companies Malawi Polytechnic Farmers World, Agriculture Products, (Association Macro/Micro Trading Export of Mulli Brothers Limited, Lab

Company, and Trading

MACE,

Processors, NASFAM Commercial, Tambala Food Company, Multipliers Smallholder Seed

Action Group (ASSMAG) Finance Concern Universal Microfinance Operations LTD 26

Institutions Government Programmes International

(CUMO), FINCA, MUSCO, Micro Loan Finance, MRFC RLEEP, IRLARD, FIDP, USAID INVC, ICRISAT, CIAT, UNIDO, UNDP, FAO,NORAD, DFID,

Organizations Dan Church Aid, Civil Society Organizations World Vision International, Farmers Union of Malawi, CISANET, CISONET, Action Aid International, Oxfam, and many others involved Communities in agriculture and livelihood security Smallholder farmers and Farmer Association and Cooperatives

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