LILONGWE-(MaraviPost)-The country’s Civil Society Led Black Economic Empowerment Movement (MaBLEM) on Tuesday call upon Malawi government to regulate entire legume crops for its economic muscles.
The legumes crops including Pigeon Peas (Nandolo), Groundnuts (mtedza) Sugar Beans (Nanyati) Soya Beans and Sesame.
The grouping says due to economic potentials the crops have the legumes need to be placed under the mandated and regulated crops.
The call comes a week after President Peter Mutharika raised the selling price of Pigeon Peas leaving other legumes crops.
In a press statement released and made available to the Maravi Post, MaBLEM says all legume crops need to be put under control favour than one crop.
Below is the full statement signed by Robert James Mkwezalamba and Fryson Chodzi MaBLEM’s Chairperson and Coordinator respectively;
CALL TO PROTECT AND REGULATE THE TRADING OF LEGUMES
We, the members of the Civil Society Led Black Economic Empowerment Movement (MaBLEM), compelled by the circular from the Government of Malawi on the sale of pigeon peas (locally known as Nandolo) released on 12th September 2018, would like to impress on the authorities to do more beyond setting prices and assigning ADMARC to buy Nandolo and other legumes.
The circular, though long overdue, is a welcome development towards the Black Economic Empowerment and protection of the local farmers and the agricultural sector.
However, we feel that the press release falls short of what is needed to be done in order not only to protect local farmers, but also for the country to economically empower its people through a properly regulated legumes structured market.
Our Observations on legumes market
Presently, at production level, the local black farmers only realize about 10% profit while the rest of the 90% profit from legumes is realized at the value addition and export level. Ironically, at the export level, no local farmers are involved because the industry is saturated by some foreign persons especially from India, Asia and Burundi. These foreign nationals are the ones that are reaping off from our farmers.
They connive to buy the produces at prices as low as K50/kg for Nandolo, or K80/per kg for soya and K130/kg for Groundnuts and export the same non-regulated. However, it is estimated that in India, Europe and the Far East the produces fetch a minimum of US$5 for Nandolo, US$4 for Soya and US$3 for Groundnuts. What is shocking is that most of these foreign nationals are involved in price transfers, and also make fraud declarations to the Reserve Bank of Malawi as regards to their returns.
What is exasperating is that these foreigners have formed a lobby group under the Grain Traders Association which unfortunately no farmers are represented in the process. These comprise of major companies in the trading of legumes which include, Export Trading Group (ETG); Farmers World; Rab Processors; Transglobe; Nniyombo Investment and other companies owned by foreign nationals and of course Burundi Nationals.
Moss of these companies are reaping off the local farmers in Malawi. They conduct inside trading to control the price of legumes and with lack of alternatives where the farmers would sale their products, our farmers continue to be exploited. As a lobby structure, we are aware of the bribes and corruption that these companies are involved with Government officials to ensure that the status-quo is maintained where the legumes trading remains uncontrolled and unregulated.
In case of Burundi nationals for instance, on daily basis they are exporting truckloads of Groundnuts and beans from Mgona in Lilongwe to Kenya, India and Far East and becoming millionaires while the farmers in Malawi who worked very hard on the same produce continue to wallow in abject poverty.
Malawi needs to develop mandate and regulate the trading of legumes.
MaBLEM strongly believes that instead of just encouraging local farmers to be selling their Nandolo to ADMARC at an agreed minimum price, the best way forward for Government of Malawi is to enact a mandate that would control and regulate the trading of not only Nandolo but also the other legumes as well.
Legumes have a potential to turn the economic warfare of Malawi and there are evidence and pointers that if a mandate was acted, Malawi would benefit a lot on the sale of legumes as compared to the current status. We urge the Government to consider the following legumes to be placed under the mandated and regulated crops: Pigeon Peas (Nandolo), Groundnuts (mtedza) Sugar Beans (Nanyati) Soya Beans and Sesame.
Potentiality of regulated markets for Legumes
MaBLEM is aware of a study done by a reputable organization Centre for Social Concern (CSC) on the viability of legumes turning the economy of Malawi around. In 2015, the five stated legumes were estimated that they had a potential to raise US$500million in sales but by the end of the season only US$60million was realised. This entails that Malawi lost a potential of US$440million out of unregulated sale of legumes.
We are aware that Tobacco is facing a number of challenges and that its proceeds are not as attractive as was the case in the past. In 2017 Tobacco, which is prized as a major export for Malawi, managed to fetch US$ 212,514,063. The proceeds for tobacco are transparent and traceable because of the fact that tobacco is sold under legal mandates and export process. This entails that if we are to control the sale of legumes, they are likely to replace Tobacco as a major forex earner in Malawi.
MaBLEM further understands the case studies of two countries that have adopted the regulated mandates of selling of their products and have managed to make economic strides. Ethiopia adopted a regulated commodity exchange market for its major products. The critical two products, Coffee and Sesame before the regulated market could only fetch an average of US$250million. When Ethiopia adopted the regulated market of these two products, for the last three years the country has been averaging US$1.5billion every year. Similarly, Rwanda has managed to raise its income from produces after regulating its market.
It is MaBLEM beliefs that Malawi has a lot of potential if it adopts the regulated market for the proposed five legumes. It is imperative that the trading of these legumes ought to be done in a controlled manner just as in tobacco.
We would want to call upon the Government to go beyond just calling farmers to sell their Nandolo and other legumes to ADMARC but we would want the following happening.
Expand the list of legumes targeted so that it is not only Nandolo but include also Mtedza, Nanyati, Soya and Sesame
Revive ADMARC and its role not just for buying products but also as a market service for legumes.
Regulate export of the listed five legumes (Nandolo, Mtedza, Nanyati, Soya and Sesame)
so that just like protected products like Timber, be exported under the control of Reserve Bank
of Malawi that any company or individuals exporting these products must register with the bank
in terms of returns. These legumes must form part of the GDP contributors.
Create mandates so that buying and selling of these five legumes should be done with ADMARC
and through the Commodity Exchange under Auction Holding Exchange Commodity (AHXL).
This mandates must compel all the major companies to only buy their commodities from either
ADMARC or the AHXL. This will mean that local farmers by law will only sell their products
through ADMARC and Commodity Exchanges where they will not be reaped off in terms of
MaBLEM will continue pursuing a robust, all-inclusive agenda for local emancipation from external
manipulation that is strangling economic growth of indigenous black Malawians. We are founded in our forefathers beliefs that black local Malawians must be the beneficiaries of their toil. There is a need to reverse the current situation where foreigners especially from India, Asia and Burundi who are never farmers earn 90% of the profit from produce yet Malawians make a meagre 10% from their sweat.
Malawians and Malawi, can redeem itself from the pangs of the current state of despair and laizfair
attitude and economic turmoil by adopting policies which benefit the majority of Malawi and its people and not foreigners.
We call upon farmers to work up and embrace the changes in how their commodities have been sold and demand justice in ensuring that they benefit from their sweat and land.
It’s time we change and end the adage that denotes ‘dziko ndi wanu, ndalama ndi wanthu’.
In Unity, there is strength!!!