Lack of refrigeration and access to markets means Malawian farmers lose up to half of their produce to post-harvest loss – this was one of the main factors driving the Renewable Energy for Agriculture project run by Practical Action and our partners in northern Malawi.
The work has levelled the playing field for rural women farmers by enabling them to access renewable energy technologies which help them grow high quality crop, store food effectively, secure regular supply contracts with local private sector buyers, and earn a reliable income.
Our knowledge pieces on contract farming and productive use of renewable energy capture our evidence and learning – Head to the Practical Action website or reach out to learn more about the project.
Farming along the arid lake shores of northern Malawi is challenging. In Chintheche, a small town, most men fish for a living, often leaving women in rural households responsible for tending to land. As farmers, women also face additional barriers, including limited access to land and finance and a lack of time for earning money caused by family care responsibilities.
In developing agriculture-based solutions, Practical Action and Modern Farming Technologies (MFT), a local social enterprise in Malawi, engaged women in the community to map out opportunities and determine what effective interventions looked like. Together, an agri-energy business model was developed. The Renewable Energy for Agriculture Project (RE4A) was launched in 2021, which has led to the successful development of a business that supports women farmers.
How it worked
The project kicked off with 18 farmers, growing to 45 greenhouses managed by 135 farmers engaged in tomato farming for income generation within two years. With MFT providing an end-to-end solution for farmers, the contract farming business model follows this approach:
- With the help of farmers cooperatives, women farmers come together in groups of three to procure farming inputs such as tomato seeds and fertiliser.
- Through a rent-to-own scheme, MFT provides the farmers with equipment, including polytunnels, drip irrigation kits and solar water pumps.
- Farmers receive training on controlled environment farming and regular extension services from agriculture personnel at MFT.
- To reduce post-harvest loss, African Mini Grids, a renewable energy developer, set up a solar chill plant assembled using an old shipping container.
- After the women harvest the tomatoes, MFT buy the produce from the farmers, store it in the chill plant and secure onward buyers.
- All Grade 1 produce is sold to MFT by the farmers, who make a deduction for the rent-to-own payments, set at 25% of the sales value, being deducted at source. Other produce is sold independently by the farmers.
After the pay-back period is complete, the women will own the greenhouses and irrigation pumps after three and a half years of harvest and sales.
Evidence of success.
One of the key successes of the project design is that women work only 10 hours a week in their greenhouses, in group rotations. This has enabled them to attend to other care responsibilities and tasks. Despite the small-time commitment, farmers reported a 38% average increase in earnings, with 80% stating that farming in the greenhouse has become their primary source of income. In the first year, the women earned a net annual income of 648 Euro working 10 hours a week, making up 57% of the living income figure for an entire household. The project has not only addressed time poverty but also reduced drudgery and post-harvest loss, which has been achieved by leveraging productive use of renewable energy technologies which included solar irrigation kits and a solar refrigerator. The women have adopted a skillset in advanced farming practices and more importantly, secured a reliable income through the contract farming model, with MFT managing the sale of produce to various markets.
Lydia, one of the farmers, expressed that the highlight of the project has been the rent-to-own scheme, which allows farmers to retain the equipment after a set pay-back period.
She said:
“I enrolled in the project to make more money to support my family, but I have gained a lot more over the last couple of months. I’ve gotten the chance to learn how improved farming works: making manure, planting other types of crops, tomato trellising, pest, and disease management, and how to use a solar irrigation pump – which I will one day own. Knowing that I will own the greenhouse and the pumps just makes me feel happy. We’re all committed to the pay-back period because we’ve never owned equipment or assets.”
Collectively, the women have harvested over 43,000kg of tomatoes, and their decision-making abilities and confidence in entrepreneurship have improved over time.
MFT and Practical Action’s contract farming business model demonstrates the
critical inter-relationships between three variables: access to renewable energy assets, agricultural productivity, and access to markets. They all support each other, and the absence of one makes the others difficult to achieve. In this slim market in northern Malawi, the one-stop model provided by MFT has proved viable. A high proportion of the business’s costs were covered by a grant of approximately 300,000 euros. The current data suggests that, over a period of 4 years, the rent to own repayments and produce sales, will have been sufficient to support a doubling of the number of farmers in the scheme (through an expansion in the rent to own scheme). This would result, in over 470,000 Euro being brought into the local economy through increases in farmer incomes – a return on the original grant investment of 163%.
Over the course of 2 years, the project has worked well for farmers, proving that alternative funding arrangements to support farming communities, including a combination of grants and commercial funding, can be viable. This unique model demonstrates that contract farming is a viable strategy for securing access to energy assets for women farmers whilst providing them with an attractive income at the same time.
Renewable Energy for Agriculture (RE4A) is a project supported by grants from GIZ and the Powering Renewable Energy Opportunities programme (Ikea Foundation and UK aid funded). It is a 2-year project, in which Practical Action are working with a social business in Malawi, Modern Farming Technologies (MFT), to test a contract farming model that supports access to renewable energy for small scale farmers.
Our knowledge pieces from this project shed more light on:
- The mutual dependence between the provision of productive use energy assets, support to agricultural production and access to agricultural markets.
- How grants and commercial funding can be used to trigger the development of a business for smallholder farmers and SMEs.
Head to the Practical Action website to download our learning brief, read our impact stories from our blogs page, or reach out to us to obtain the business model report.
