AgDevCo

In 2011, Chief Kadzumba from the Chikwawa District of southern Malawi contacted Bouke Bijl, Managing Director of Agricane, who operate farming companies in the region.

Because of increasingly unreliable rains, Chief Kadzumba wanted to know if there might be a commercial opportunity for his community to access irrigation to grow sugar cane and food crops. There was. 

With proper irrigation the hot Chikwawa weather is perfect for cultivating sugarcane, and just down the road is a sugar mill, owned by Illovo, a ready customer. Bijl reached out to AgDevCo for blended finance and the Phata Sugarcane Cooperative was born. 485 local farmers pooled their surplus, largely unproductive land for membership of the cooperative and after the first year of harvest they were receiving annual dividend payments that far outstripped the value of the rain-fed crops they were growing before. 

According to the FAO, less than 4% of Sub-Saharan Africa is irrigated, the lowest level globally. Greater irrigation coverage, combined with smart water management, is essential for Africa to feed itself. The infrastructure need not be high-tech, but the models AgDevCo has helped develop in Malawi show how smallholder farmers can access professionally managed, commercial irrigation without sacrificing ownership of their land. 

The Phata cooperative is one of those models. Three years after it started, hundreds of other local farmers were keen to join and Phase 2 of Phata commenced. The estate increased to 603 hectares of sugarcane under centre-pivot irrigation, with a further 72 hectares for food crops and forestry. 667 additional smallholder farmers became members, including Judith Chilongo. 

‘The year before I joined the cooperative, I only got two bags of maize from my land,’ she says. ‘That’s MWK 20,000 (US$ 25) for the whole year. I thought why am I wasting my energy? Last year my dividend payments from Phata were MWK 600,000 (US$ 740) and I’ve built four houses, which I rent out for MWK 45,000 (US$ 55) each per month. There’s no way I could have done that without the cooperative.’

Communities in low-yielding agricultural regions like Chikwawa face further challenges from climate change, so the need for good irrigation will grow. Sub Saharan Africa is a climate change hotspot, with intense storms in some parts, longer, hotter dry spells in others – like Chikwawa. That doesn’t mean there isn’t enough water – Chikwawa is in the Shire River basin, one of the largest in the region – what’s lacking is the infrastructure to get the water to where it’s needed and to manage it sustainably.

‘Africa is littered with failed irrigation projects,’ says Jim Henderson, Southern Region Director at AgDevCo, based in Malawi. ‘Basic irrigation systems like hand-pumps may work for smallholdings, but to make a serious impact on Africa’s food production we need commercial-scale infrastructure. As Phata demonstrates, where communities work together they can benefit from major infrastructure investment that allows them to enter into commercial value chains’

Phata is Fairtrade certified so the cooperative receives an additional US$ 60 per ton of sugarcane, which is paid into a community development fund controlled by member farmers. The fund has provided a community ambulance, electricity connections to the surrounding villages and a pump for clean, potable water. It also finances a Women’s Action Group, which buys books, sanitary wear, and uniforms for schoolgirls. Secondary school enrolment rates have increased from 35% to 95% since the cooperative started. ‘People send their children to school now,’ says Chilongo. ‘They have the money from the dividends and the extra training Phata gives farmers has shown them the importance of education.’

As freely as water flows, so irrigation canals can crumble. A few kilometres from Phata is another community-owned sugarcane estate, Kasinthula, where farmers are shareholders in the business, to which they lease their land. In 2019 they also approached Agricane to take over management of the scheme; the cooperative members wanted to maintain commercial grade irrigation without selling their land. AgDevCo came on board, investing US$ 4 million of debt/ equity into the business, alongside a US$ 1 million grant from the UK Government. 

After a year of intensive reconstruction, yields nearly doubled. By 2022 they are forecast to reach the estate’s production ceiling of 140,000 tons. Through a combination of irrigation methods, they have achieved a balance between water conservation and business sustainability: overhead sprayers use less water but can’t be used during power cuts, water is pumped at night, when electricity supply is more reliable, to fill dams for furrow irrigation. 

Agricane has also introduced satellite-linked precision equipment to reduce fuel consumption during land preparation and is introducing conservation agriculture techniques to rejuvenate the soil. ‘Professional management is key,’ says Charles Chavi, Trust Administrator who has worked at Kasinthula since 2007. ‘Our organisation needed that kind of independence - new people, with new thinking, new ideas.’

The success of Phata and the turnaround of Kasinthula have attracted attention from the Malawian Government, which is leading an ambitious programme - the Shire Valley Transformation Project, funded by the World Bank- to boost agricultural productivity and commercialisation across Chikwawa District and neighbouring Nsanje. Kasinthula and Phata are regularly cited as a vision of what the rest of the valley could look like. Tione Malizani, Extension Officer at Phata, has lived in Nsanje and Chikwawa all his life. He left his job as an Agricultural Science teacher to work on an estate ‘that was having positive impact on farmers.’ He is excited about what the Shire Valley Transformation Project could achieve, but emphasises the need for specialist management.

‘It would be easy to replicate this model in other parts of the Shire Valley and the wider region. But it needs an agribusiness manager like Agricane and a specialist investor like AgDevCo,’ says Malizani. ‘To design big irrigation infrastructure projects that small farmers can benefit from.”

Privately-owned commercial irrigation models can also be inclusive. Agribusinesses across Africa have huge potential to offer smallholders the benefits of their high-quality irrigation infrastructure. Since 2014, AgDevCo has invested nearly US$ 7 million in Tropha, and parent company Jacoma Estates, which operate a macadamia, chilli and paprika farm in the north of Malawi. The macadamia estate is the core business, with additional sourcing from more than 1,000 smallholder outgrowers by 2026. To generate income while the macadamia trees grow, Tropha has provided commercial-grade drip irrigation to 100 ha of community land so that small local farmers can grow chilli and paprika as cash crops. 

‘It came about because we bought a new farm to expand the estate, and installed a pump and underground pipeline, which ran through community land where farmers were regularly experiencing drought, ’ explains Duncan McDavid, Tropha CEO. ‘We realised that the pipeline could provide local farmers with new drip irrigation for chilis and paprika, which we now buy and process at the hub farm to produce export powdered spices. It’s a win-win.’

In addition to providing irrigation, AgDevCo’s technical assistance team partnered with Tropha to train farmers on integrated pest management and support them to gain GLOBAL G.A.P. certification, which has opened up higher-value export markets. A recent independent survey showed that farmers have expanded their plots by 35 percent, further increasing incomes. They are also planting food crops in between the paprika and chilli, improving the quality, quantity and diversity of their families’ diets.

Successful irrigation is much more than digging pipes and installing pumps. It’s a complex social, environmental, and commercial management challenge, which innovative models can overcome to deliver food, cash crops, poverty alleviation and climate change resilience for Africa’s most vulnerable communities. As world leaders meet at the UN’s COP26 climate change summit, responsible intensification of agricultural output will be high on the agenda. Irrigation is essential for this to be achieved and there are certainly huge gains to be made in Africa.