The one-two punch of drought and catastrophic flooding in Malawi is devastating to smallholder farmers and has pre-empted calls for creative approaches to create sustainable, profitable livelihoods that are resilient to natural disasters.

A new nearly US$40 million project awarded to Palladium in April by the U.S. Agency for International Development (USAID) prioritises links between the private sector and local farmers to ensure lasting sustainable economic growth, a major thrust of the foreign aid agency’s policy framework. The project – known as the Growth Poles Activity – sets out to address the country’s poverty and food security by promoting resilience and economic investment in the southeastern African nation. Growth Poles will leverage and expand upon an innovative private sector approach established under the Feed the Future Malawi Agriculture Diversification Activity (AgDiv) with the engagement of players in the global tobacco industry, which historically had a strong foothold in Malawi.

“The tobacco, sugar, and tea industries are seeing declining exports and this decline has a direct and negative impact on the livelihoods of the average Malawian farm family, who were employed by or sold crops to them,” says Ricardo Michel, Palladium Senior Managing Partner. “We see an opportunity to collaborate with the private sector – in this case, global agricultural companies – to leverage their infrastructure and strong relationships with farming communities to diversify with more resilient, nutritious, and economically competitive crops including groundnuts, soy, mangoes, and macadamia.”

“And to drive local ownership, we’re helping farmers and farmer networks get access to financing to help them grow into the future,” Michel adds.
This new project will approach local agricultural development from several angles to coordinate investments to drive economic growth for smallholder farmers, youth, and women. Palladium will continue to partner with the private sector to drive investments in profitable value chains that replace declining industries while engaging smallholder farmers via community outreach, technical extension services, and off taking to increase incomes.

The project will also support micro-finance institutions, banks, and local NGOs to facilitate access to capital, lines of credit, extension/business services, and agricultural technologies to ensure smallholder communities can capitalise on these new value chain opportunities.

Palladium will also establish partnerships that work towards new objectives to address and mitigate the negative impacts of climate change, which have recently proven catastrophic to Malawian farmers.

“A new and interesting aspect of this project is its engagement of local partners in natural resource management,” explains Palladium’s Liz Venable, an economist on this and the previous Ag/Div project. “Nature and game preserves, land trusts, watershed management groups, and agribusinesses are all interested in reducing deforestation, restoring watersheds, and improving soil health. This represents ambitious new areas of collaboration that require investment, leverage, and community buy-in.”

The new project promises to change how farmers grow their own income and become resilient to storms, floods, drought, and other shocks. Private sector partnerships under AgDiv that link farmers to soy and groundnut value chains have already demonstrated that farmers can dramatically increase their farm production and incomes through access to new resilient varieties, high quality inputs, financing, and extension support. At the same time, community interventions supporting entry into irrigated farming and non-farm enterprises are helping households become less dependent on rainfed agriculture.

“Resource and know-how can be harnessed to uplift communities,” adds Sarah Wall, Growth Poles Project Director. “Under the Growth Poles Activity, we will scale these activities to improve the poverty and livelihoods of 200,000 Malawian farmers. This will be transformational for the farmer, their families, and Malawi’s rural economy.”

For more, read 'Is Planting Bamboo the Answer to Preserving Forests in Malawi Without Disrupting Local Livelihoods?' or contact info@thepalladiumgroup.com.