Tobacco out, sugar in

Lilongwe – In an effort to diversify Malawi’s economy away from the tobacco industry, the government has earmarked sugarcane production as one of the strategic crops in both its Economic Recovery Plan and the National Export Strategy.
The country’s sugar industry is dominated by multinational investor Illovo Sugar (Malawi) Limited, who are growing cane and operating mills in Nchalo in the south and in Dwangwa in the central region.
There are fears, though, that the new focus on cane farming could result in more land disputes as foreign investors rush to grow the crop.
In addition, there have already been problems with Illovo’s milling monopoly with the firm and out-grower farmers disagreeing on how much the sugarcane is worth.
Out-grower schemes supply both mills in Nchalo and Dwangwa. Independent producers also supply Illovo.
The state has taken an interest and is keen to see locals benefiting from the sugar industry as well as other rural-based economic activities.
The government’s Green Belt Initiative intends to establish institutional development mechanisms that will effectively and efficiently deliver appropriate services to improve rural livelihoods and contribute to the national economy. Its institutional framework awaits Presidential and cabinet approval.
Green Belt Initiative acting co-ordinator, Dr Henry Njoloma, said they wanted to provide guidance for a government-propelled sugar initiative called Chikwawa Green Belt irrigation Scheme in the central region district of Salima.
The government procured 6 293 hectares of land from Press Agriculture for the irrigation scheme whose water sources are Lake Malawi and Lingadzi River.
Feasibility studies, scheme designs, and an environmental and social impact assessment have been conducted and 530ha hectares are already being developed.
Njoloma said, “Sugarcane has been identified as the main crop because feasibility studies have shown that it is the crop which could bring the highest return on investment to the scheme.
“The scheme will be implemented focusing on smallholder farmers, medium-scale farmers, commercial farmers and sugarcane processing plant operating firm to ensure collective ownership in order to make the programme sustainable.”
Njoloma said the government, which will provide irrigation infrastructure through farmer co-operatives and associations, would soon allocate the 530ha under development to smallholders.
“Two hectares of land will be allocated to each farmer,” he said pointing out that the size of land has been determined based on the economic viability and capacity of smallholder farmer to cultivate a given area.
He said the state would then allocate 1 500ha to medium-scale farmers (10ha to 20ha each). These farmers would be required to set up their own infrastructure.
Another 4000ha will go to a private investor who will be tasked with guaranteeing supply of enough cane to maintain full operational capacity of the processing plant.
“This model has been proposed based on the successes and impacts, other sugarcane production and processing models have on the social and economic conditions facing rural farming communities for the sugar industry, to avoid the pitfalls of possibly misdirected or poorly planned irrigation schemes,” said Njoloma.
The co-ordinator said they were building a sugar refinery for Chikwawa Green Belt Irrigation Scheme.
He also said a co-generation power plant would be built for the sugar processing plant and for irrigation pumps, while surplus electricity will be sold to the national grid.
“The plant will bring rural development of Khombedza area in line with (our) aspirations of rural industrialisation leading to development of rural growth centres,” said Njoloma.
The government has identified three other sites for similar schemes that will cover 2 000ha.

July 2013
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