How Cooperatives Can Drive Agricultural Transformation in Malawi

Cooperative farming is often seen as potential pathway for smallholder producers to gain access to more lucrative market opportunities, thus improving their livelihoods and reducing poverty. Such is the case in Malawi, where agricultural cooperatives have been prioritized in the country’s 2063 development vision as a way to enhance the productivity and commercialization of the country’s many smallholder farmers. A recent policy note from the Malawi Strategy Support Program (MSSP) looks at the current state of the program and how policymakers can increase its chances of success.

The analysis finds that the government’s efforts to encourage farming households to use cooperatives to access agricultural inputs and services and to market their production have so far not led to significant uptake. Less than 10 percent of farming communities reporting in a 2019-2020 household survey were part of a primary agricultural cooperative.

One factor behind this low uptake could be a lack of information about existing cooperatives. Government records report nearly 1,000 agricultural cooperatives in the country, but the MSSP analysis finds that these records are not always accurate, with many duplicate and no-longer-extant cooperatives listed and many newer cooperatives missing. Inaccuracies in the listings of existing cooperatives makes it more difficult for farmers to find appropriate groups to connect with.

Another factor contributing to the reluctance of farming communities to engage with cooperatives is the fact that many of Malawi’s cooperatives are not well-established and are reliant on external funding and technical assistance. They are often plagued by weak governance and have difficulty providing reliable benefits for farmers. Such cooperatives are in what the study terms the “infant stage” and are not able to effectively help their members achieve value-added processing, commercialization, and income-generation.

Agricultural cooperatives do still have the potential to help Malawi achieve its 2063 vision for enhancing agricultural productivity and reducing poverty among smallholder farmers. However, to do so, policymakers should focus on improving cooperative programs in several ways:

1. Improve cooperative governance by encouraging the hiring of professional managers to handle business operations.
2. Focus on growing existing cooperatives that have shown promise in moving beyond “infancy” and that show a commitment to continuing progress to achieve high levels of commercialization; these cooperatives are less likely to need external funding and assistance in the long term.
3. Empower social groups, such as women and youths, to form and/or join their own cooperatives that fit their specific needs and aspirations; this will help drive inclusive development.
4. Establish secondary cooperative unions to help smaller cooperatives achieve economies of scale.
5. Establish a centralized national organization to help advocate for cooperative-friendly policies and coordinate support and services for cooperatives throughout the country.
6. Invest in institutions to support land consolidation efforts and other activities to help achieve economies of scale.
7. Invest in transportation, communication, and marketing infrastructure throughout the country, particularly in rural areas, as well as in agricultural extension services and rural financing services.
8. Improve local access to resources and services to help cooperatives become more self-reliant and profitable.