ECAMA conference 2015_ Hon Felix Jumbe MP _Keynote Speech
Felix Jumbe at ECAMA research symposium 2015...
ECAMA President – Henry Kachaje
ECAMA Executive Members and all members present here
Keynote speaker – Ephraim Chirwa
Donors – from the EU and USAID through IFPRI
Fellow Honourable Members of the Parliamentary Committee on Agriculture
Invited guests, ladies and gentlemen
Good morning
It is of great honour when a farmer, son of a farmer, is given this rare opportunity to stand before a gathering of professionals who control most boardroom decisions on our economy.
Through you Mr. President, allow me to thank the organizing committee for this symposium for coming up with a topic that would begin to address issues close to reality on what needs to be done to change our economy "commercializing our agriculture" the ultimate goal for undertaking transformation.
I wish I were an effective communicator had a magic words to convert you all to become farmers at the end of this speech because one effective way of commercializing our agriculture is to attract professionals to join farming business on full time basis.
Hard facts on what agriculture can do are visible for all. Other African countries like, neighbouring Zambia never became a middle income economy until they commercialized their agriculture despite relying on copper for a long time; Nigeria became Africa's strongest economy when they reinvested in agriculture and the Zimbabwe economy collapsed after disrupting the agriculture sector with land issues although they had diamonds.
Economists say "Agriculture provides a platform for economic development of a country but it is not adequate to propel it into a developed economy". This means an economy becomes worse into poverty without agriculture. Malawi is slowly becoming the world’s poorest. This puts commercializing our agriculture as a necessary evil.
As a farmer I say, when agriculture sneezes the whole economy catches the flue.
In thinking about commercializing agriculture without pre-empting what the key note address will cover, let me share with you my observations, experience and acquired feelings on fundamental principles of farming business that you need to pay attention to as you formulate strategies for transformation.
Fundamental Principle number 1
Mr. President, ECAMA members, honourable members of parliament, the donor community, invited guests, ladies and gentlemen: Farming is a volume business; as such one needs to produce in volumes for adequate income to make him or her live a comfortable life.
Productivity: Is a key to ensure that from a small unit of land you are able to achieve high production. It makes a huge difference on the international commodity market if a farmer in USA can achieve 25 metric tonnes per hectare, a South Africa farmer, 20 metric tonnes per hectare and a Malawian farmer 2 metric tonnes per hectare. This means the same crop different income and different life style for the three farmers.
Aggregation: In our country aggregation is being practiced by traders. Farmer associations, cooperatives, ADMARC and many others are in the business of aggregating through buying the produce from smallholder farmers, stock piling it in warehouses in order to achieve economic order quantity for either export or industrial market like NRFA or Chibuku products.
The other form of aggregation is accumulation of land in order to achieve volumes in production like Press Agriculture, Tea estates etc. Owning huge chunks of land is part of the necessity in farming business for economic volume attainment. This law of necessity shall apply in future that smallholder farmers will have to be requested to aggregate their land to make it viable for mechanization and achieve efficiency in production.
Fundamental Principle number 2
The agriculture sector provides a fertile ground for effective implementation of safety net programs or management of social welfare programs that end up overshadowing the role of agriculture as an economic development sector.
Today, we face this challenge that most programs by the Ministry of Agriculture, Irrigation and Water Development are social welfare programs being administered in the agriculture sector and perceived as agriculture for economic development when in fact it is agriculture for social welfare addressing hunger and malnutrition.
We need to have an agriculture ministry for commercial agriculture that is set on policies that are aimed at increasing output to bring better income for farmers and increased exports for the country to be forex secure. Brazil has two types of ministries of agriculture in respect for this principle.
Fundamental Principle number 3
Mr. President, ECAMA members, honourable members of parliament, the donor community, invited guests, ladies and gentlemen: in every sector; be it banking, insurance, health and any other, the main stakeholders and their skills base define productivity or efficiency of the sector. In agriculture there two types of players; agriculturists and the farmers themselves.
Agriculturists are those who have information and knowledge about agriculture and their main task is to advise those who farm to take their advice. These are not farmers but often confused as farmers. If they choose to become farmers they have an added advantage of becoming better farmers. Farmers are those who practice agriculture and earn their living from undertaking different farm enterprises like myself. Again, we need to also categorize farmers in our country into two groups, farmers by choice and farmers by default given an opportunity for employment they will go for employment.
Fundamental Principle number 4
Mr. President, ECAMA members, honourable members of parliament, the donor community, invited guests, ladies and gentlemen: commercializing agriculture is a process with interlinkages that needs to talk to each other and this requires policy, legislation and regulatory framework which provide direction. Consistency is a necessity for this process to yield results and attract investors in the long run.
There is need for harmonisation of policies used in administration of the sector to build investor confidence in this case the majority of the investors are farmers in this country who have already lost hope. Currently, we have a number of policies that contradict each other to the extent that they infringe on farmers rights.
For example, ladies and gentlemen let me take you through a few:
• Ban on sell of green maize in cities and townships: Just because government fails to control theft a farmer suffers from a ban on lucrative green maize market?
• Price setting: Government continues to set prices for agricultural produce. Is it right under a liberalized market policy? Price setting on Maize first started in 1946 through the Maize Control Board by the colonialists. This contributed to the acute hunger reported in 1949 because many commercial farmers stopped growing maize. Some literature also indicate that the colonial government started setting prices with a view to control the incomes of the African farmers and today a government of fellow Malawians is administering same colonial practices.
• Export bans on agricultural produce: I know of a commodity trade investor who closed shop after government imposed export ban on soya. The company could not export soya grown under contract farming. The company went back home. This is a company that commands 30% of the RSA commodity market today and has storage capacity 10 times what Malawi Government has.
Our poverty is indeed by choice as per the book written by renowned weatherman Dr. Donald Kamdonyo PHD.
Mr. President, ECAMA members, honourable members of parliament, the donor community, invited guests, ladies and gentlemen gathered here.
Tell you what, farming being a volume business, if we are to seriously think of exports in huge volumes, we could have enhanced our railway system of transport and continued on Liwonde as a dry port.
If I had a chance to be in charge, I would invest in electrical train system from Nacala to Liwonde and reduce travel time to 2 hours. I would not give false hopes on Zambezi Waterway as a policy direction.
These fundamentals are critical for this symposium to come up with effective strategies to achieve the desired results for agriculture commercialization that would contribute immensely to economic development of the country.
ROADMAP TO COMMERCIALISATION
Mr. President, ECAMA members, honourable members of parliament, the donor community, invited guests, ladies and gentlemen: having given you critical considerations areas and element, allow me to share a roadmap to agriculture commercialization from a farmer’s perspective.
To induce productivity and commercialization in agriculture we need to consider the establishing the following:
• Organized market systems
We need to restructure and reorganize our market systems to inspire or induce farmers to produce volumes for the available markets and good pricing systems that does not suppress the farmer but creates a favorable platform for the farmer to earn profits from the produce sold to motivate further investment and growth.
• Financing
We need government to establish policies that will build the capacity of farmers to invest in volumes of production and increase yield per unit area. Brazilian farmers have their own cooperative banks that lends out for mechanization payable over years and for working capital at an average of 6% compare that with 42% from our commercial banks or should I call them katapila banks.
Government's high propensity to consume as expressed through the budget and reflection of immense interest payments of around 105 billion Kwacha makes government the biggest culprit in causing poverty in Malawi and denying financing to the private sector.
This stands to block any move to prosperity of its citizenry making the people a bunch of hand clappers for the political mediocrity. Our farmers in turn become recolonized by poverty inflicted by their own African governments. With 4% access to credit and interest rates of over 40%, commercialization of agriculture that we hope for is nothing but a dream.
Mr. President: If only wishes were horses, farmers would ride.
• Technology
Farming has evolved over the time. Today using tenants on the farm is an archaic system. On a modern day farm you will require tractors and many other farm machineries for mass production. Talk of fertilizers, herbicides, pesticides and all chemicals a modern day farmer requires then you will understand that we are not there yet in terms of investing in agriculture. We need to invest hugely in mechanization as a labour serving technology to become competitive in the region.
Irrigation technology - Malawi has a lot of surface water in rivers, dams and lakes which is not being utilized because we lack skills and investment in technologies that bring water to where the plants can use it.
Malawi has also plenty ground water not yet exploited and Malawi still remains a country that receives a lot of rain water if you compare with Israel yet we still talk about hunger in this century.
Irrigation enables a farmer to grow a crop three times or twice a year depending on crop type, in so doing achieving the desired business volumes for better incomes.
• Farmer organizations
We have made strides in establishing farmer organizations like Farmers Union of Malawi, Nasfam, TAMA and the likes but we need government to work hand in hand with these institutions to bring structured organization to grassroots farmers for easy extension delivery.
It is also high time our farmer organizations transformed into cooperatives for the farmer to have a share of the aggregation value added.
Mr. President, ECAMA members, honourable members of parliament, the donor community, invited guests, ladies and gentlemen: Talk is cheap, we need to take action. Professionals like you in this conference room need to venture into agricultural production like I did against all odds back in 1997 same time a boardroom decision to curtail lending to the agricultural sector was made by some of you here which brought down the system.
We can talk and talk about commercializing agriculture but if there is no political will to let go of the agricultural sector from the shackles of poverty alleviation to wealth creation then we will remain the poorest nation on earth.
We have had leaders who enjoy addressing symptoms of poverty because it is easy to make a poor man worship them in return. We talk of tourism as a sector but we have had this huge fresh water lake which stretches over 500 kilometres, from Karonga to Mangochi, yet with no deliberate investment in tourism cities by the shore.
From this farmer’s point of view, Mr. President, Malawi is an agro-based economy by nature or default, not by choice. We farm because we find ourselves in a situation where we have vast arable land, water, air and 12 hour sunshine throughout the year and people who are an idle labour force yet no deliberate policy has been put in place to engage these factors into commercial production that would indeed make agriculture our economic backbone.
One thing I have discovered over the years is that; Malawi is not a landlocked country but the economic systems employed have locked the peoples’ mind and disposition and so they think they are landlocked.
Imagine the two hour electrical train from Liwonde to Nacala as a gateway and chartered route to the sea for Malawi as a nation.
Mr. President, ECAMA members, honourable members of parliament, the donor community, invited guests, ladies and gentlemen: With these few farmer’s lamentations, let me declare the Second ECAMA Research Symposium officially open.
Thank you for listening
ECAMA President – Henry Kachaje
ECAMA Executive Members and all members present here
Keynote speaker – Ephraim Chirwa
Donors – from the EU and USAID through IFPRI
Fellow Honourable Members of the Parliamentary Committee on Agriculture
Invited guests, ladies and gentlemen
Good morning
It is of great honour when a farmer, son of a farmer, is given this rare opportunity to stand before a gathering of professionals who control most boardroom decisions on our economy.
Through you Mr. President, allow me to thank the organizing committee for this symposium for coming up with a topic that would begin to address issues close to reality on what needs to be done to change our economy "commercializing our agriculture" the ultimate goal for undertaking transformation.
I wish I were an effective communicator had a magic words to convert you all to become farmers at the end of this speech because one effective way of commercializing our agriculture is to attract professionals to join farming business on full time basis.
Hard facts on what agriculture can do are visible for all. Other African countries like, neighbouring Zambia never became a middle income economy until they commercialized their agriculture despite relying on copper for a long time; Nigeria became Africa's strongest economy when they reinvested in agriculture and the Zimbabwe economy collapsed after disrupting the agriculture sector with land issues although they had diamonds.
Economists say "Agriculture provides a platform for economic development of a country but it is not adequate to propel it into a developed economy". This means an economy becomes worse into poverty without agriculture. Malawi is slowly becoming the world’s poorest. This puts commercializing our agriculture as a necessary evil.
As a farmer I say, when agriculture sneezes the whole economy catches the flue.
In thinking about commercializing agriculture without pre-empting what the key note address will cover, let me share with you my observations, experience and acquired feelings on fundamental principles of farming business that you need to pay attention to as you formulate strategies for transformation.
Fundamental Principle number 1
Mr. President, ECAMA members, honourable members of parliament, the donor community, invited guests, ladies and gentlemen: Farming is a volume business; as such one needs to produce in volumes for adequate income to make him or her live a comfortable life.
Productivity: Is a key to ensure that from a small unit of land you are able to achieve high production. It makes a huge difference on the international commodity market if a farmer in USA can achieve 25 metric tonnes per hectare, a South Africa farmer, 20 metric tonnes per hectare and a Malawian farmer 2 metric tonnes per hectare. This means the same crop different income and different life style for the three farmers.
Aggregation: In our country aggregation is being practiced by traders. Farmer associations, cooperatives, ADMARC and many others are in the business of aggregating through buying the produce from smallholder farmers, stock piling it in warehouses in order to achieve economic order quantity for either export or industrial market like NRFA or Chibuku products.
The other form of aggregation is accumulation of land in order to achieve volumes in production like Press Agriculture, Tea estates etc. Owning huge chunks of land is part of the necessity in farming business for economic volume attainment. This law of necessity shall apply in future that smallholder farmers will have to be requested to aggregate their land to make it viable for mechanization and achieve efficiency in production.
Fundamental Principle number 2
The agriculture sector provides a fertile ground for effective implementation of safety net programs or management of social welfare programs that end up overshadowing the role of agriculture as an economic development sector.
Today, we face this challenge that most programs by the Ministry of Agriculture, Irrigation and Water Development are social welfare programs being administered in the agriculture sector and perceived as agriculture for economic development when in fact it is agriculture for social welfare addressing hunger and malnutrition.
We need to have an agriculture ministry for commercial agriculture that is set on policies that are aimed at increasing output to bring better income for farmers and increased exports for the country to be forex secure. Brazil has two types of ministries of agriculture in respect for this principle.
Fundamental Principle number 3
Mr. President, ECAMA members, honourable members of parliament, the donor community, invited guests, ladies and gentlemen: in every sector; be it banking, insurance, health and any other, the main stakeholders and their skills base define productivity or efficiency of the sector. In agriculture there two types of players; agriculturists and the farmers themselves.
Agriculturists are those who have information and knowledge about agriculture and their main task is to advise those who farm to take their advice. These are not farmers but often confused as farmers. If they choose to become farmers they have an added advantage of becoming better farmers. Farmers are those who practice agriculture and earn their living from undertaking different farm enterprises like myself. Again, we need to also categorize farmers in our country into two groups, farmers by choice and farmers by default given an opportunity for employment they will go for employment.
Fundamental Principle number 4
Mr. President, ECAMA members, honourable members of parliament, the donor community, invited guests, ladies and gentlemen: commercializing agriculture is a process with interlinkages that needs to talk to each other and this requires policy, legislation and regulatory framework which provide direction. Consistency is a necessity for this process to yield results and attract investors in the long run.
There is need for harmonisation of policies used in administration of the sector to build investor confidence in this case the majority of the investors are farmers in this country who have already lost hope. Currently, we have a number of policies that contradict each other to the extent that they infringe on farmers rights.
For example, ladies and gentlemen let me take you through a few:
• Ban on sell of green maize in cities and townships: Just because government fails to control theft a farmer suffers from a ban on lucrative green maize market?
• Price setting: Government continues to set prices for agricultural produce. Is it right under a liberalized market policy? Price setting on Maize first started in 1946 through the Maize Control Board by the colonialists. This contributed to the acute hunger reported in 1949 because many commercial farmers stopped growing maize. Some literature also indicate that the colonial government started setting prices with a view to control the incomes of the African farmers and today a government of fellow Malawians is administering same colonial practices.
• Export bans on agricultural produce: I know of a commodity trade investor who closed shop after government imposed export ban on soya. The company could not export soya grown under contract farming. The company went back home. This is a company that commands 30% of the RSA commodity market today and has storage capacity 10 times what Malawi Government has.
Our poverty is indeed by choice as per the book written by renowned weatherman Dr. Donald Kamdonyo PHD.
Mr. President, ECAMA members, honourable members of parliament, the donor community, invited guests, ladies and gentlemen gathered here.
Tell you what, farming being a volume business, if we are to seriously think of exports in huge volumes, we could have enhanced our railway system of transport and continued on Liwonde as a dry port.
If I had a chance to be in charge, I would invest in electrical train system from Nacala to Liwonde and reduce travel time to 2 hours. I would not give false hopes on Zambezi Waterway as a policy direction.
These fundamentals are critical for this symposium to come up with effective strategies to achieve the desired results for agriculture commercialization that would contribute immensely to economic development of the country.
ROADMAP TO COMMERCIALISATION
Mr. President, ECAMA members, honourable members of parliament, the donor community, invited guests, ladies and gentlemen: having given you critical considerations areas and element, allow me to share a roadmap to agriculture commercialization from a farmer’s perspective.
To induce productivity and commercialization in agriculture we need to consider the establishing the following:
• Organized market systems
We need to restructure and reorganize our market systems to inspire or induce farmers to produce volumes for the available markets and good pricing systems that does not suppress the farmer but creates a favorable platform for the farmer to earn profits from the produce sold to motivate further investment and growth.
• Financing
We need government to establish policies that will build the capacity of farmers to invest in volumes of production and increase yield per unit area. Brazilian farmers have their own cooperative banks that lends out for mechanization payable over years and for working capital at an average of 6% compare that with 42% from our commercial banks or should I call them katapila banks.
Government's high propensity to consume as expressed through the budget and reflection of immense interest payments of around 105 billion Kwacha makes government the biggest culprit in causing poverty in Malawi and denying financing to the private sector.
This stands to block any move to prosperity of its citizenry making the people a bunch of hand clappers for the political mediocrity. Our farmers in turn become recolonized by poverty inflicted by their own African governments. With 4% access to credit and interest rates of over 40%, commercialization of agriculture that we hope for is nothing but a dream.
Mr. President: If only wishes were horses, farmers would ride.
• Technology
Farming has evolved over the time. Today using tenants on the farm is an archaic system. On a modern day farm you will require tractors and many other farm machineries for mass production. Talk of fertilizers, herbicides, pesticides and all chemicals a modern day farmer requires then you will understand that we are not there yet in terms of investing in agriculture. We need to invest hugely in mechanization as a labour serving technology to become competitive in the region.
Irrigation technology - Malawi has a lot of surface water in rivers, dams and lakes which is not being utilized because we lack skills and investment in technologies that bring water to where the plants can use it.
Malawi has also plenty ground water not yet exploited and Malawi still remains a country that receives a lot of rain water if you compare with Israel yet we still talk about hunger in this century.
Irrigation enables a farmer to grow a crop three times or twice a year depending on crop type, in so doing achieving the desired business volumes for better incomes.
• Farmer organizations
We have made strides in establishing farmer organizations like Farmers Union of Malawi, Nasfam, TAMA and the likes but we need government to work hand in hand with these institutions to bring structured organization to grassroots farmers for easy extension delivery.
It is also high time our farmer organizations transformed into cooperatives for the farmer to have a share of the aggregation value added.
Mr. President, ECAMA members, honourable members of parliament, the donor community, invited guests, ladies and gentlemen: Talk is cheap, we need to take action. Professionals like you in this conference room need to venture into agricultural production like I did against all odds back in 1997 same time a boardroom decision to curtail lending to the agricultural sector was made by some of you here which brought down the system.
We can talk and talk about commercializing agriculture but if there is no political will to let go of the agricultural sector from the shackles of poverty alleviation to wealth creation then we will remain the poorest nation on earth.
We have had leaders who enjoy addressing symptoms of poverty because it is easy to make a poor man worship them in return. We talk of tourism as a sector but we have had this huge fresh water lake which stretches over 500 kilometres, from Karonga to Mangochi, yet with no deliberate investment in tourism cities by the shore.
From this farmer’s point of view, Mr. President, Malawi is an agro-based economy by nature or default, not by choice. We farm because we find ourselves in a situation where we have vast arable land, water, air and 12 hour sunshine throughout the year and people who are an idle labour force yet no deliberate policy has been put in place to engage these factors into commercial production that would indeed make agriculture our economic backbone.
One thing I have discovered over the years is that; Malawi is not a landlocked country but the economic systems employed have locked the peoples’ mind and disposition and so they think they are landlocked.
Imagine the two hour electrical train from Liwonde to Nacala as a gateway and chartered route to the sea for Malawi as a nation.
Mr. President, ECAMA members, honourable members of parliament, the donor community, invited guests, ladies and gentlemen: With these few farmer’s lamentations, let me declare the Second ECAMA Research Symposium officially open.
Thank you for listening
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