Stories tagged: NASFAM

The Crop Weather Index Insurance by the National Smallholder Farmers’ Association of Malawi (NASFAM)

The Crop Weather Index Insurance (WII) in Malawi is a partnership that includes the National Smallholder Farmers Association of Malawi (NASFAM), Malawi Rural Finance Company (MRFC) and the Department of Climate Change and Meteorological Service.

With changes in rainfall patterns attributed to Climate Change, farmers have started to see the need for weather index insurance.

Climate Change is having a negative impact on yields in Malawi and poor yields make loan repayment a big challenge for smallholder farmers. The WII offers a relief to most farmers in addition to safeguarding against bad weather, farmers who could have enough harvest could also receive some payouts on their loan.

Micro Finance Institutions such as the Opportunity International Bank of Malawi (OIBM) and the Malawi Rural Finance Company (MRFC) started financing crops which were previously not supported yet susceptible to drought and marketing problems.

Objectives:

Apart from the direct importance of the insurance some weather stations got weather measuring instruments. For example, Mchinji district benefited an automated weather station financed by the World Bank. This reduced costs of collecting data by the Meteorological Service department.

Since the project was being implemented in collaboration with other stakeholders such as loan providers and agricultural extension workers, Insurance companies reduced on cost of monitoring the fields, which is not the case with the traditional insurance norms where insurers visit each field.

The WII helped to increase production especially for maize and groundnuts through access to adequate improved seed. The varieties that were promoted for both maize and groundnuts were short season (duration), suitable for adapting short rainy seasons. For areas where weather was still a problem, farmers were compensated at the end of the season. 

Results:

  • In the two years of implementation of the project many key players in the agricultural sectors have developed interest in the WII, including the government of Malawi.
  • Since farmers were in groups, organising them was easier. This saw the programme, which started with groundnuts, later on expanding to maize and tobacco after looking at its benefits.
  • The pilot WII has seen the introduction of insurance to non-traditional crops in the country. 

References:

www.siteresources.worldbank.org/EXTARD/Resources/

www.un.org/esa/sustdev/sdissues/finance/egm2007/presentations

 

Meeting the Grade: The Case of Groundnuts in Malawi

Work has been taking place in Malawi to enable farmers’ to achieve the grades and standards required to take part in broader markets. Whilst a lack of technical and financial capacities is often the greatest hindrance to meeting these targets, which cover food safety, quality, social and environmental standards, the ever-changing nature of the standards themselves exacerbates the challenges facing smallholder farmers.

Since 2003, ICRISAT have been working with the National Smallholder Farmers’ Association of Malawi (NASFAM) to establish a “hybrid” system for ensuring achievement of standard requirements for the export of groundnuts from smallholder farmers’ associations in Malawi.

The project’s focus on groundnuts is the result of severe decline in the crop’s production, due to changing market requirements overseas, unavailability of seed in sufficient quantities and at affordable prices, and poor post-harvest handling.

Groundnuts are affected by aflatoxins, a naturally-occurring fungus which can infect crops during pod development or through poor post-harvest practices. Increasingly strict maximum allowable levels (MALs) of aflatoxin contamination in the European Union have prevented smallholder producers from accessing the European high-value markets.

According to the World Bank, the reduction of MALs to 4 parts per billion of aflatoxin has results in annual losses of over US$670 million for African countries.

The ICRISAT and NASFEM project objectives were:

  1. To increase productivity of groundnuts by providing improved varieties and the accompanying crop management options.
  2. To develop a system of grades and standards to enable smallholder farmers to participate in regional and international markets.
  3. To assist in development of a Market Information System.

Alongside training farmers in improved agricultural practices to increase yields and improve crop quality, the “hybrid” system created ‘production standards’ that would ensure farmers follow best practice to reduce the chances of infection by the fungus. These targets complement the ‘performance standards’ that are used in European markets, which determine the levels of a contaminant in a product.

The team also established an aflatoxin analytical laboratory in Malawi to help identify the sources of contamination and provide the necessary solutions, to help increase farmers’ chances of meeting the MALs.

Other steps also included organising farming groups into clubs who sell their produce at designated areas to allow for easy traceability.

ICRISAT has written,

The ability to accurately detect and quantify aflatoxin contamination at an affordable cost, allowed farmers in Malawi to re-establish groundnut exports to the quality-conscious European market, and stimulated interest in the approach in Mozambique and Zambia. Many other African countries are benefiting from this technology and appropriate management practices that reduce the initial aflatoxin contamination are being employed.