Sukambizi Association Trust, Malawi

Introduction

Tea is a major employer and earner of foreign exchange for the Malawian economy, with 99% of production destined for export markets. More than 93% of tea is produced by privately-owned tea estates. The remainder is produced by up to 12,000 small-scale farmers who sell their freshly plucked green leaf to estate factories where it is processed into black tea, ready for blending and packing as loose tea or tea bags. Farmers rarely have the resources to own a tea factory and are therefore unable to benefit from value-added processing activities.

About Sukambizi Association Trust (SAT)

Since the 1960s tea farmers in the area sold their green leaf to a national tea company. Consistently late payments prompted 4,000 farmers to join together in 2003 to form SAT, which enabled them to negotiate a contract to instead supply their green leaf to nearby Lujeri Tea Estate. As well as making punctual payments, the estate provides training in good farming practices and is developing a nursery to supply good quality tea seedlings.

Tea provides up to 70% of smallholder incomes and they also grow maize, cassava, pineapples, bananas and sugar cane for domestic consumption and sale to local markets. The majority of farmers in the region live in houses with thatched roofs rather than iron roof sheets, around 99% have no electricity or running water and only 20% have bank accounts. More than 90% of their children attend primary school but only 25% continue to secondary education. Farmers struggle to buy enough food during the dry, off-peak season when little tea is harvested and sold.

Association members have experienced important advances in their standard of living. Most members can now send their children to school and feel more food secure. Around half now have bicycles, mobile phones, radios and iron sheet roofing. Ninety per cent have bank accounts, and this has empowered women in particular to put money aside as savings.

Production and sales

Members have small tea plots of 0.3 hectares on average. They produce around 8 million kilos of green leaf a year which Lujeri Tea Estate processes into 1.7 million kilos (1,700 tonnes) of black tea. SAT negotiates a green leaf price with Lujeri and receives a second or bonus payment calculated on the price achieved at auction or by direct sales. Changing weather patterns and an increase in pests and disease are reducing yields by 15% on average and correspondingly affecting farmers’ incomes.

Fairtrade

SAT was Fairtrade certified in September 2008. Membership has grown to 8,149 as local farmers have seen the benefits of Fairtrade Premium projects and applied to join the group.

For Fairtrade sales SAT receives the Fairtrade Premium of US$0.50 per kilo of tea to invest in strengthening their business and community improvements. Fairtrade sales have grown from 750,000 kilos in 2009 to 1.3 million kilos in 2012, representing 73.3% of total sales, and bringing in more than $650,000 in premiums.

Since Fairtrade certification, SAT members have experienced important advances in their standard of living. Increased access to fertilisers, planting more tea saplings and improved husbandry and harvesting techniques have led to rises in productivity and incomes. But the advances mainly result from access to community services in which SAT has invested the Fairtrade Premium. Most members can now send their children to school and feel more food secure. Around half now have bicycles, mobile phones, radios and iron sheet roofing. Ninety per cent have bank accounts, largely because Lujeri wanted to make payments this way, but which has empowered women in particular to put money aside as savings.

SAT has moved towards autonomy from Lujeri by opening its own office with transport, computer and printer, and recruiting a professional administrator. A development plan with milestones and budgets has been put in place, which includes a project to provide electricity to members’ villages via solar panels. Longer-term, SAT wants to increase its share of the value chain by developing its own processing factory, probably as a joint venture with Lujeri.

Fairtrade Premium projects

Community

• Construction of Naphimba maternity wing (joint-funding): estimated 400 deliveries a year, saving expectant mothers a 40km trip or traditional home births with danger of life-threatening complications.
• Solar power and piped water installed at Naphimba maternity wing.
• Purchase of ambulance: saving patients a 40km trip, serving community of 30,000.
• Construction of guardian shelter: building where relatives of patients at medical centre can cook and sleep – previously they cooked under trees and slept in corridors.
• Clean water project to pump ground water via communal taps to seven villages/4,000 families who otherwise collect drinking water from unsafe streams and wells.
• Construction of water tank and 35km pipeline to supply one village and sinking of bore holes to supply safe water to three more villages. Construction of classroom blocks and infrastructure for primary and secondary schools to increase access to education for local children.
• Secondary school bursaries for orphan children.
• Maintenance of local roads.

Farmer support

• Distribution of higher quality, high yielding and drought resistant tea plants.
• Subsidised fertilizer scheme to improve productivity and reduce farmers’ costs.
• Construction of bridges over rivers and streams to connect 4,800 people in 45 inaccessible villages and increase efficiency of green leaf transportation to Lujeri Tea Estate.
• Construction of three leaf sheds where green leaf delivered by farmers is kept dry before collection and transportation to Lujeri.