IFAD and Malawi to build resilience and productivity of small-scale farmers and MSMEs

ROME/LILONGWE, October 11, 2023: As Malawi’s food insecurity worsens due to ongoing multiple crises, the International Fund for Agricultural Development [IFAD] and the Government of Malawi recently signed additional funding of US $57 million to increase support to small-scale farmers and micro, small and medium-sized enterprises [MSMEs].

The funding will be channeled through two ongoing IFAD supported programmes – the Programme for Rural Irrigation Development [PRIDE] and the Financial Access for Rural Markets, Smallholder and Enterprise Programme [FARMSE]—and will enable project participants to access climate-smart technologies and rural finance, increase productivity, provide market linkages and catalyse commercialisation in the agriculture sector.

Agriculture is Malawi’s main economic activity, accounting for 30 percent of its Gross Domestic Product [GDP] and 80 per cent of its export earnings, as well as employing 64 per cent of the country’s work force. However, the sector performs below its potential due to myriad challenges including increased climate impacts, low mechanisation, poor access to finance, weak market linkages and limited access to irrigation.

“Despite the current situation the country finds itself in, Malawi has the opportunity to transform its agricultural sector as envisioned in its Malawi Vision 2063 agenda, especially under pillar one, which focuses on agricultural productivity and commercialization,” said Bernadette Mukonyora, IFAD Country Director, Malawi. “This additional funding was made possible because IFAD invests in rural food systems that are purpose-built and respond to the current crisis.”

To reduce small-scale farmers’ reliance on rain-fed agriculture, which 80 per cent depend on, PRIDE will receive US$ 27.7mln to rehabilitate five irrigation schemes and establish two new ones. This will allow farmers to grow high-value crops – tomatoes, onions, vegetables, pigeon beans, rice, beans, sesame – throughout the year. In addition, small-scale farmers benefiting from the irrigation schemes will also be able to access climate information via SMS to help them build their resilience to continuous climate shocks.

Agricultural finance is a critical catalyst to deepen productivity and commercialisation in Malawi. In this regard, the Financial Access for Rural Markets, Smallholder and Enterprise Programme [FARMSE] will receive US$ 24mln to help connect farmers and MSMEs to rural finance. To safeguard these investments, farmers will be linked to markets and provided access to climate weather index insurance.

IFAD’s commitment to accompanying Malawi on its journey toward fulfilling the Malawi Vision 2063 agenda is further demonstrated by the opening of the IFAD Malawi Office. Under the guidance of the country director, the office will help coordinate in-country investment as well as policy engagement with partners and stakeholders.

Since 1981, IFAD and its partners invested US$ 731.96mln in 14 programmes and projects benefiting more than 2mln rural families in Malawi.

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