A smallholder perspective on the Malawian Macadamia Industry
Malawian farmers are on the edge of a promising investment. The crunchy, smooth, white spheres have the potential to change the landscape and mentality of rural Malawi; all they need is the reassurance that macadamia nuts are as tasty to people around the world as they are to the village children who sneak around the orchards for a quick snack.
In the international market, macadamia are amongst the highest-priced nuts. Their popularity took them around the globe from their native Australia, where they started being commercialised only 70 years ago. The greatest bulk in production still comes from Australia and Hawaii, yet the crop has found a home in Malawi, which is now the fifth largest producer of macadamia in the world.
In the southern region of Malawi, rolling hills of intense green tea fields make up the country scenery. Around the tea fields, estate owners began planting macadamia orchards more than 50 years ago, and today thousands of hectares are shaded with sturdy trees that once a year drop as many as 8000 metric tonnes of nuts in shell. The private sector has its limitations, however, and land availability is one of them.
The majority of the population in Malawi, often cited as one of the poorest countries in the world, engages in subsistence farming. Each farmer divides his land to grow the crops his family needs for food, and leaves aside some space to grow what are known as cash crops; things that he can sell to get a few goods that he can’t get from the land. Traditionally, the most important cash crop in Malawi has been tobacco, but people also grow cotton, rice, and soya. Since the popularity of tobacco has declined in world markets, the government of Malawi has been looking for diversification crops. It was in this capacity that in 2000 the government began to encourage farmers to grow macadamia, yet failed to provide a platform where farmers could take the nuts and sell them, like the tobacco auction floors that farmers are familiar with.
Most of the macadamia estates are located in the southern district of Thyolo, yet the biggest expanse of land with the best altitude and climate conditions to grow this crop has been identified in the northern region of the country, as well as large pockets of the central region. Smallholder farmers in these parts began planting macadamia over 10 years ago, but have kept their crops small, as they are dependent on large estates to process and export their harvests. Macadamia has the potential to assume a leading role as part of a portfolio of diversification crops; furthermore, it can gain weight in the world market by complimenting private estates with smallholder groups to improve the national production in quality and volume.
For the past four years Equal Exchange has supported smallholder farmers in developing, handling, selling and increasing their macadamia crops. Today this sector of the industry is expanding at a rate of 72,000 new trees per year, with a total of 350,000 trees established in the last decade. The estate sector counts with over a million trees, yet they have little room for expansion. However, it is the estates that own, run, and have the experience of efficiently running processing plants, plus decades of knowledge and experience in growing, harvesting and handling the crop. A partnership, then, is beneficial to both sides. The macadamia industry needs to adopt a long-term approach in order to manage the potential and real growth at a national level.
With this in mind, representatives of each sector got together and wrote, on behalf of the Malawian Macadamia Industry and with support from Irish Aid and the Business Innovation Facility, the first Strategic Plan from 2012 to 2020. The purpose of the Strategic Plan is to integrate smallholder macadamia farmers into the commercial, export-based industry in a suitable and commercially viable manner. To achieve this, they will concentrate on four objectives: The first is to improve on productivity, profitability and sustainability. The second is to provide smallholders with an environment that will allow them to be a viable part of the industry. Third, to secure the Malawi Macadamia industry position as a world-class exporter. And the fourth objective is to give industry-wide capacity to manage the growth.
There are common challenges in the estate and smallholder sectors that need to be addressed simultaneously for the industry to prosper. The transfer of knowledge from older generations, the implementation of systems to control local pests, and the upkeep of new technology and innovations are amongst these challenges.
As part of the first objective, for example, the quality of the harvest will be an area of concentration. Macadamia nuts go through a grading process to ensure only the best get exported. Currently about 60% of the smallholder’s crop is deemed grade A and sold for export, yet this margin could be raised to 75 per cent simply by improving warehouses where the nuts are stored and training farmers on better ways of handling the nuts after harvest. The volume of production from smallholders is projected to double in the next three years from 250MT to 500MT of nuts in shell as the number of trees increases and more trees reach maturity and begin to produce fruit. If these projections are to happen, it is indispensable to invest in infrastructure and give training to farmers.
Nonetheless, the nuts that are deemed grade B don’t go to waste, at least not in the smallholder sector. Macadamias have, as with people the world over, enthralled Malawian palates, especially those of young children. In March, at the height of the harvest – which unfortunately coincides with the so-called hungry season in Malawi – children like to venture into the orchards and crack macadamias for a quick snack. Theft is, of course, a growing concern for farmers and estates alike, yet it represents no more than 5% of the harvest and can usually be kept in check in rural areas with a stern warning at the local primary school. As the volume of production increases, theft is likely to become a smaller problem, as there is only so much the local community can consume.
Since the introduction of macadamia as a cash crop, this most nutritious nut has made a slow but sure entry into the local diet. These are particularly healthy nuts because of their high levels of mono-saturated fats and calcium, which are otherwise lacking in the traditional Malawian diet. As the taste for macadamia continues to grow in Malawi, people find new ways to incorporate the nut into their food. Some have started to use macadamias as they do peanuts; pounding them and using the flour to flavour vegetable dishes. Others fry them or roast them over the fire, and through Equal Exchange some communities are arranging to get equipment to make oil with the nuts.
Macadamia is also an easier crop to tend to than any of the other cash crops. Farmers call it the retirement cash crop, because once a tree has reached maturity it will, with a little attention to pests and perhaps some organic fertilizer, continue to grow bigger and give more fruit every year. A macadamia tree can produce an annual harvest for as many as 30 years.
Still, some farmers are wary of this investment; they’ve sat and watched their neighbours plant macadamia. After all, there are risks involved. The first risks come from within the farm: a lack of knowledge in pest management and post-harvest handling can leave a farmer with less than 20% of sellable kernel. The pest populations are not controlled naturally by the winter as they are in other places, because in Malawi the winter does not reach freezing points. Plus, there is the risk of fire; many farmers plant other crops like maize around their trees, and to clear the fields for a new planting season they often set fire to the plot, putting their orchards in danger. While there are ways to prevent each of these risks, there are other menaces that are beyond the control of the farmer. A shortage of foreign currency in Malawi has put in jeopardy businesses and investments across the board, plus a shortage and increasing price for fuel makes transport unreliable to get the product to the nearest ports in Mozambique – Malawi is landlocked – and finally, the fluctuation of world prices of this commodity puts at risk the profitability of the crop.
In recent years, however, the return on macadamia in the export market has kept enviable records, and as of now the Malawian industry has a good reputation of exporting a high-quality product. Over 75 per cent of Malawian macadamia exports go to the United States, Japan and Europe.
There is a promising future for this crop in Malawi, and those who invest in developing this industry, from farmers to estates and international partners, are venturing into a business that can have profound changes in the agriculture of the country.
By Lorena Fernandez