Malawi is one of the poorest countries in Southern Africa. Agriculture provides a livelihood for 85% of the population, of which around 90% are smallholders. Sugar is the third biggest export earner after tobacco and tea. Development of the sugar sector is constrained by high input costs, poor rural infrastructure, inadequate health facilities, lack of agricultural support services, and lack of appropriate technology.
Kasinthula Cane Growers Association (KCG) is a smallholder sugar cane project located in the inhospitable Shire River Valley District of Chikhwawa in the south of Malawi. Long droughts occasionally result in famine and the twice-yearly rains frequently bring floods. Poverty is rife with most people living in basic huts with thatched roofs and few can afford to afford to keep livestock. Most families eke out a living growing maize, cassava or rice on the arid land, while others earn cash from sugar cane or cotton or work as labourers on nearby sugar plantations.
Masauko Khembo lives with his wife Naomie and their three children in the Katunga area of Chikhwawa. Their son Dennis, 14, and daughter Melpha, 12, attend high school and Ethan, 5, is in primary school.
Before joining Kasinthula in October 2010, Masauko worked for 13 years for Illovo Sugar where Kasinthula sends its sugar cane for milling. He joined Illovo straight from university and progressed to become an agronomist, a middle management position.
KCG was a joint venture set up in 1996 by the Malawi Government and the Sugar Corporation of Malawi, a private company that at the time owned the nearby sugar mill. The mill is now operated by Illovo Sugar, a South African-owned leading global sugar producer which owns the only two sugar mills in Malawi. The KCG project involved converting an area of largely unproductive land to sugar cane production in order to increase the supply of raw cane to the mill and at the same time provide an income for 282 subsistence farmers who were barely able to grow enough food to eat.
The project extends to a 1,150-hectare block of land leased from the government and divided into cane fields of between 10 and 70 hectares. Although farmers are allocated individual plots of 2 - 3 hectares the project is run on a co-operative basis. Masauko’s primary role is to lead a team of employees in running the cane growing business and farming activities on behalf of the farmers. This includes planting, irrigation (400 hectares are irrigated by centre pivots and the rest is furrow irrigated), hand-cutting the sugar cane and delivery to the Illovo mill approximately 25km away. The company is responsible for purchase of inputs and services on behalf of the farmers and also provides agricultural extension services to the farmers.
From the start, the project was threatened by enormous and escalating debts. The mill had taken out a large loan from foreign creditors to finance the installation of an irrigation system and prepare the land for cane production. But the amount owed was multiplied several times over when the local currency was dramatically devalued against the US dollar and interest rates rocketed above 40%.
It then transpired that KCG and its members were liable for the debt as owners of the land. Through no fault of its own the co-operative was suddenly thrown into serious financial difficulties. Proceeds from the first harvest didn’t even cover interest repayments let alone reduce the capital amount. But with key issues now clarified, good management in place and support from the government, KCG is making headway in repaying the debt.
Through no fault of its own the co-operative was suddenly thrown into serious financial difficulties because of a loan for an irrigation system. Proceeds from the first harvest didn’t even cover interest repayments let alone reduce the capital amount. But with good management in place and support from the government, KCG is making headway in repaying the debt.
KCG and Fairtrade
KCG was Fairtrade certified in 2002 and is now supplying sugar on Fairtrade terms to a growing number of companies in the UK, Europe and the US.
On top of the contract price for the sugar cane, Fairtrade sales attract an additional Fairtrade Premium of $60 a tonne of sugar which is ring-fenced for much-needed community development projects.
KCG’s total production is now sold to Fairtrade buyers. They include companies from Belgium, Germany, Norway and the US as well as Billington’s, the Co-op, Equal Exchange, Napier Brown, Nirvana Sugars, Traidcraft and Whitworths in the UK.
KCG’s sugar is available in brown and white sugar packs and catering sticks, as well as in biscuits, cakes, drinking chocolate, sweets and even spiced drinks such as mulled wine. With the launch of Fairtrade cosmetics, the sugar is also available in body scrubs and face masks.
Use of the Fairtrade premium
KCG members met for discussions and agreed to use the Fairtrade Premium as follows:
40% is put into a fund which is shared equally among farmers to purchase household items, building materials like cement and corrugated iron roofing sheets, or to pay children’s school fees.
40% for community projects – supporting water and electricity supply, health centres, schools and roads.
20% for initiatives to ensure the sustainability of the business – annual field plough-out and replanting, and replacement of vital machinery.
The first priority for the farmers was to provide safe, clean water to the three villages that had to collect water from the Shire River, risking water-borne diseases such as bilharzia and attack from crocodiles. Access to clean water is literally a lifesaver here. Since 2004, 18 boreholes have been dug to supply clean water to local villages.
An exciting water project was completed in 2011 which provides tap water to farmers’ homes in Salumeji village following the installation of underground pipes by the Southern Regional Water Board.
The extra income from Fairtrade sales has allowed most members to build new houses. Small mud huts with flimsy thatch roofs have been replaced with larger, sturdy houses with brick walls and corrugated iron roofs.
In 2006 a donation was made to the Kasinthula Bilharzia Clinic for the purchase of anti-bilharzia drugs after the government repeatedly failed to provide them. Around 70% of local people are affected by bilharzia, a chronic parasitic disease that is second only to malaria in terms of its destructive social and economic impact. In 2011 the clinic was extended into a full healthcare clinic, including construction of a house for a resident clinical officer.
Four bicycle ambulances have been purchased – the bikes are adapted to pull specially designed trailers as a cheap and simple way of transporting patients for medical treatment.
A village primary school project of six classrooms and administrative block was completed in 2011. Children can now start school when they are five rather than having to wait until they are seven or eight and old enough to walk the long distance to the nearest school. In 2011, six computers and three printers were donated to three high schools in the area.
Significant amounts of premium money have been used to support a government electrification project to make electricity available for the first time in members’ villages. Pylons and transformers have been brought in and 82 houses in Chinangwa village have been connected. Farmers have bought fridges, radios and televisions, and electric lighting means they can now work at home or conduct business in the evenings and children can do their homework more easily.
In 2011, In 2011, KCG secured an EU grant of £150,000 (matched by KCG) which enabled them to expand production by 400ha. This means a further 200 farming households will be able to join the organisation as sugar cane farmers and look forward to significant improvements in their standard of living.