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Assessing contribution of Dairy Sector to Economic Growth and Food Security in Malawi

Processing plant at Mweramkaka in Ntchisi, Malawi (courtesy of Mr Rollins Chitika)

Summary

Fractured supply chains have been identified as a barrier to growth in the agricultural sector. In this regard, African agriculture is particularly handicapped. The dairy supply chain was selected for the project because dairy is a key investment sector for the Government of Malawi. Donors such as USA, Japan and Belgium have focused part of their development aid on the sector, but despite this, domestic production response is still unimpressive and large parts of the population do not have access to dairy products of nutritious and safe quality.

In this context, the purpose of this project is to address some of the key challenges faced by the chain through an assessment of its operation that can help boost the potential contribution of the sector to economic growth and food security. ESRC logoThe methodology of analysis involves several stages from exploring the operation of each of the parts of the dairy supply chain, identifying problems and proposing solutions, to integrating the different results into a model that will allow simulating the impact of different policy alternatives. The project, which is funded as part of the DFID-ESRC Growth Research Programme, is multidisciplinary and SRUC' partner in this work is Bunda College of Agriculture in Malawi and the African Institute of Corporate Citizenship (AICC), Malawi office. 

Top right photo caption: Processing plant at Mweramkaka in Ntchisi, Malawi (courtesy of Mr Rollins Chitika).

Key Challenges

The situation of the dairy sector in Malawi is complex with a number of factors hampering its development.  These include:

  • a processing sector comprised of five firms employing between 20 to 40 per cent of their total capacity;
  • some domestically produced processed products are actually made from imported powder milk, which has been reconstituted;
  • the processing sector makes profit despite high costs by targeting the affluent part of the urban population;
  • a high percentage of the milk is rejected by processors due to quality issues (estimated at 17 per cent);
  • only a relatively small percentage of the milk produced domestically is destined to processors, the rest is sold through unpasteurised to the rural population and less affluent urban segment;
  • Malawi has the lowest consumption of milk per capita in Africa (estimated at 4.7 kg/capita/year compared to an Africa average of 15 kg/capita/year).

Key Benefits

The future of agriculture, and therefore smallholder producers, is increasingly associated with the sustainability of supply chains. Lessons from experiences in food supply chains around the world indicate that unless the coordination of the supply chain improves, it is not possible to achieve competitiveness and incentives that encourage investment, adoption of innovations, the provision consumer products that are safe and nutritious, and finally, economic growth and food security.

The outputs of the project will be disseminated at different levels both in Malawi and internationally. In Malawi, at the Government level, the target for the project dissemination strategy is policy makers at the relevant ministries. At the local/sub-national level, the focus is producers, consumers associations and other organisations working with the dairy supply chain. All these organisations will benefit with the outputs generated by the project (e.g., presentations, briefings, reports).

At the international level, the results of the project will be disseminated in the form of policy briefs and/or presentations to international development agencies currently operating in Malawi and also to other potential donors.

Research outputs of the Project 2012 – 2019 

Peer-reviewed articles 

  • Akaichi, F., and Revoredo-Giha, C. (2014). The demand for dairy products in Malawi. African Journal of Agricultural and Resource Economics Volume, 9(3), 214-225. Full text
  • Chagunda, M. G., Mwangwela, A., Mumba, C., Dos Anjos, F., Kawonga, B. S., Hopkins, R., and Chiwona-Kartun, L. (2015). Assessing and managing intensification in smallholder dairy systems for food and nutrition security in Sub-Saharan Africa. Regional Environmental Change, 1-11. Full text.
  • Revoredo-Giha,  C. and Renwick  A. (2016). Market structure and coherence of international cooperation: the case of the dairy sector in Malawi. Agricultural and Food Economics.2016, 4:8, DOI: 10.1186/s40100-016-0052-y. Full text.

Published report

  • Project Team (2015). An Analysis of the Dairy Sector in Malawi. Full text.

Research/policy briefs

  • Revoredo-Giha, C. (2013). Overview of the project. Full text.
  • Barnes, A.; Thomson, S., Arakelyan, I. and Revoredo-Giha, C. (2013). Efficiency of Malawi Milk Production. Full text.
  • Thomson, S. (2013). Trends in Malawi smallholder farming. Full text.
  • Thomson, S.; Barnes, A.; Chagunda, M.; Chitika, R.; Chiumia, D.; and Kawonga, B. (2013). Malawi milk bulking groups. Full text.
  • Revoredo-Giha; C., Arakelyan, I.; Chalmers, N.; and Chitika, R. (2013) Responsiveness of the supply of milk in Malawi. Full text.
  • Leat, P.; Revoredo-Giha; C.; and Jumbe, C. (2013). Dairy processors in Malawi. Full text.
  • Akaichi, F.; Chalmers, N.; and Revoredo-Giha; C., (2013). Distribution of dairy product in Malawi. Full text.
  • Akaichi, F.; and Revoredo-Giha; C., (2013). Demand for dairy products in Malawi. Full text.
  • Toma, L., Revoredo-Giha, C. and Thomson, S. (2013). Trade on dairy products in Malawi. Full text.

Interview

  • SRUC Research Messages and Training for Malawi. Published Wednesday, 20th May 2015 in Research news. Full text.

Conference Presentations

  • Revoredo-Giha, C., Arakelyan, I. and Chalmers, N. (2015) “Processors pricing and smallholders’ milk supply response in Malawi: An application of the nonlinear autoregressive distributed lag model” Presentation at the 29th International Conference of Agricultural Economists “Agriculture in an Interconnected World”, Milan August 9-14, 2015. Full text.

Conference Papers

  • Revoredo-Giha, C., Arakelyan, I. and Chalmers, N. (2015) “Processors pricing and smallholders’ milk supply response in Malawi: An application of the nonlinear autoregressive distributed lag model” Contributed paper at the 29th International Conference of Agricultural Economists “Agriculture in an Interconnected World”, Milan August 9-14, 2015. Full text.
  • Revoredo-Giha, C., et al. (2015) “Identifying Barriers for the Development of the Dairy Supply Chain in Malawi” Symposium paper at the 29th International Conference of Agricultural Economists “Agriculture in an Interconnected World”, Milan August 9-14, 2015. Full text.
  • Chalmers, N., Revoredo-Giha, C., and Jumbe, C. (2015) “Measuring the Degree of Integration on the Dairy Products Market in Malawi” Contributed paper at the Agricultural Economics Society, 89th Annual Conference, April 13-15, 2015, Warwick University, Coventry, UK. Full text.
  • Toma, L., Revoredo-Giha, C. and Thomson, S. (2014) “An analysis of the dairy trade between Malawi and the European union” Contributed paper at the 2014 International Congress, August 26-29, 2014, Ljubljana, Slovenia. Full text.
  • Revoredo-Giha; C., Arakelyan, I.; Chalmers, N.; and Chitika, R. (2013) “Processors pricing and smallholders’ milk supply response in Malawi: An application of the nonlinear autoregressive distributed lag model” Contributed paper at the African Association of Agricultural Economists (AAAE), Fourth International Conference, September 22-25, 2013, Hammamet, Tunisia. Full text.
  • Revoredo-Giha, C., Arakelyan, I. and Chalmers, N. (2012) “Market Structure and Coherence of International Cooperation: The Case of the Dairy Sector in Malawi” Contributed paper at the International Association of Agricultural Economists Conference, August 18-24, 2012, Foz do Iguaçu, Brazil. Full text.

Opinion pieces

  • Revoredo-Giha, C., (2014). Eating western, dying western? Thomson Reuters Foundation. 22 Oct 2014 14:30 GMT. Full text.
  • Revoredo-Giha, C., (2014). Milking it in Malawi. Monday, 28 July. Global Food Security Blog. Full text.
  • Revoredo-Giha, C., (2014). You won’t help farmers in Africa by just throwing money at them.  The Conversation, August 22, 6.13am BST. Full text.

Project-based event with policymakers/practitioners to discuss existing evidence and research findings

  • Revoredo-Giha, C. and Mtimet, N. (2015) “Issues in the development of dairy value chains in developing countries” Organized Symposium at the 29th International Conference of Agricultural Economists “Agriculture in an Interconnected World”, Milan August 9-14, 2015. Full text.
  • Revoredo-Giha, C.; Arakelyan, I.; Moran, D.  (2013) "Malawi: building a sustainable dairy farming sector". Presented at Malawi: building a sustainable dairy farming sector, Royal Botanic Garden, Edinburgh, 4 November 2013. Full text.

Presentation delivered by researchers to a policy and practice audience

  • Revoredo-Giha, C. (2019). Marketing of dairy products in Malawi. Invited presentation at Resilience in Farming - Scotland and Malawi, Royal Highland Show, Edinburgh, 21st June, 2019. Full text.
  • Revoredo-Giha, C. (2015). Identifying Barriers for the Development of the Dairy Supply Chain in Malawi. Invited presentation at Food Research in Edinburgh (FRIED) and Science, Technology and Innovation Studies (STIS) Seminar, Crystal Macmillan, University of Edinburgh, 23rd of November 2015. Full text.
  • Chitika, R and Revoredo-Giha, C. (2014). Identifying Barriers for the Development of the Dairy Supply Chain in Malawi. Presentation at The International Livestock Research Institute (ILRI) and the Technical Centre for Agriculture and Rural Cooperation ACP-EU (CTA) CTA-ILRI African dairy value chain seminar from 21 to 24 September 2014 in Nairobi, Kenya. Full text.

Workshop with relevant stakeholders (such as policymakers, other research users)

  • Scotland’s Rural College, Lilongwe University of Agriculture and Natural Resources and The African Institute of Corporate Citizenship (AICC), Lilongwe (2015). Contribution of the Dairy Sector to Economic Growth and Food Security in Malawi Final Seminar of the DFID/ESRC Project ‘Assessing the Contribution of the Dairy Sector to Economic Growth and Food Security in Malawi’ Crossroads Hotel, Lilongwe, Malawi , 15 May 2015. Full text. Full text.
  • Scotland’s Rural College, Lilongwe University of Agriculture and Natural Resources and The African Institute of Corporate Citizenship (AICC), Lilongwe (2015). Challenges and possibilities for the dairy sector in Malawi. Final Seminar of the DFID/ESRC Project ‘Assessing the Contribution of the Dairy Sector to Economic Growth and Food Security in Malawi’ Lilongwe and Lilongwe University of Agriculture and Natural Resources (LUANAR), Malawi 13 May. Full text.

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