GROUNDNUT SECTOR IN MALAWI
Groundnut production in Malawi is dominated by female-headed households and resource poor farmers, with approximately 675,000 growers in 2012/13 season. This is because groundnut is easy to produce, requires few cash inputs and can be consumed by producing households where nutritional and flavour benefits are recognized. Groundnut also has the benefit of being an easily tradable cash crop in local markets.
Approximately 20% of all smallholders grow groundnuts, making it one of the mostly widely grown crops after maize and tobacco. The central region is particularly suited to groundnut production with 70% of Malawi’s groundnut grown in Mchinji, Lilongwe, Kasungu and Ntchisi. Smallholders account for 93% of production volume, with the balance coming from commercial farms. Production is labour intensive, much of which is implemented by women. Most farmers plant groundnut in pure stands (mono-crop) with an average land area of 0.4 Ha. Increasingly, groundnuts are seen as a cash crop to be grown in rotation with maize. In such a system, maize benefits considerably from the nitrogen fixing properties of groundnuts.
From 2009, average groundnut yields have improved to an average of 1 mT/Ha. This has been attributed to the adoption of CG7, a Virginia-type (runner) variety, which is high yielding. This is still relatively low against yield potentials of up to 2.5mT/Ha. Most farmers use recycled seed which compromises yields and increases aflatoxin prevalence. There is insufficient certified seed to support increased production due to low volumes of breeder/basic seed and low awareness among smallholders of the implications of over-recycling seed on yield. In the past 7 years a steady growth has been demonstrated in both production and land allocation to groundnuts from 260,570 mT on 280,786 Ha in 2008 to 399,000 mT grown on 388,000 Ha in 2014.
At the household level groundnuts are processed into flour, which is used as a seasoning for food. Nuts can also be boiled or roasted. Due to the protein and oil content of groundnut, consumption of nuts in whatever form contributes to significant nutritional well being. As such, home consumption and locally traded groundnuts constitute an estimated 60% of the groundnut crop.
Due to the informal nature of the sector, groundnut markets remain generally unstructured. At times, groundnuts are sorted, graded and tested for aflatoxin contamination for the formal export market, and Malawi was internationally recognised for its Chalimbana nut. However, exports have dwindled with the introduction of stringent measures on aflatoxin minimum levels allowable in Europe and other developed country markets. Still strong regional demand exists, with thriving formal and informal groundnut trade to South Africa, Tanzania and other countries in the region with lesser quality restrictions. Currently several companies process groundnut into roasted nuts, peanut butter and as a component of ‘Ready to Use Therapeutic Foods’ (RUTF). Processors at this level take up 40% of the country’s production. Subsequently, groundnuts are either sorted and packaged, or roasted and processed into products such as peanut butter and RUTF.
In central region groundnuts are sold shelled to vendors and traders at village level or at trading centres. However, in southern region and Salima, groundnuts are usually sold in shells. The product is generally traded by intermediate buyers (vendors) who buy small quantities (as little as 1 kg), by aggregators (small scale traders) with storage facilities in rural trading centres, and by large-scale traders/processors who take up about 40% of the crop. Of this, 15% is exported formally to South Africa and other regional markets. In addition to formal exports, there is a thriving informal groundnut trade to Tanzania and Kenya, where aflatoxin testing requirements are not enforced. Recorded exports in 2011 indicate export trade of 30,000 mT. Groundnuts are listed on the Agricultural Commodity Exchange (ACE) and Auction Holdings Commodity Exchange (AHCX), but traded volumes remain low.