Small farmers are normally marginalized in international trading. But those who have joined fair trade Malawi partnership opportunities are getting a nice return for their commitment and efforts. Accessing global markets with this support guarantees an income that is above the market price.
Increased income is vital for a poor nation in which over 84 percent of workers are toiling in agriculture. Here average land holdings cover a very small area. Just one hectare. There is little room for expansion in this densely populated country. Since agriculture constitutes 90 percent of export earnings, it is vitally important to the economy. Thirty five percent of the GDP is contributed from this sector.
This nation is also one of the poorest in the continent. The per capita GDP is less than half the average of Sub-Saharan Africa. Its income inequality is the highest in Africa. Life expectancy is only 41 years. Its child mortality, HIV and AIDS mortality rates are among the highest anywhere.
Agricultural production was liberalized in 1994. This change brought new challenges. Liberalization caused a huge decline in commodity prices. Middlemen cheated smallholders out of their deserved earnings after 2004 when Government stopped directly purchasing goods.
Producers banded together to boost their prospects and improve their earnings. Over a hundred and eight thousand farmers joined under the umbrella of the National Association of Smallholder Farmers. The organization has set up mechanisms for training and to help in quality management. However, the international trading partnership offers these vulnerable smallholders another source of support.
The Fairtrade Foundation is the lynch pin for a trading partnership that seeks greater equity in international trading. It offers better trading terms for producers and agricultural labor in developing countries marginalized by the market. To join this partnership, farmers must follow environmental, social and economic standards. Social requirements demand upholding of labor rights and the following of democratic decision making processes so that all members can participate. The economic requirement ensures a minimum price which covers the production costs with a premium intended for community and business development. The environmental standards support sustainable agriculture practices and business development. Current efforts are targeting the diversification of crops to encourage local processing and bring added value to the existing practice, creating jobs and enhancing regional trading opportunities.
The partnership also encourages market buyers to support prefinancing and establish long term contractual relationships. This improves the playing field and brings added benefits to their customers. The customers benefit from the assurance of traceability and a guarantee of transparency. As consumers have become aware of the costs of industrial agriculture to them, they are willing to pay more for less compromised products. An increase in the number of ethical consumers willing to pay higher prices for less comprised products has been a boon for this special segment of the market.
Certification guarantees the principles are followed along the supply chain. Since its introduction in 2004 over 12,400 smallholders have been able to gain entry into the global market this way. The small farming families of the nation have seen significant impact in the commodities initially covered by the partnership. In tea, groundnuts and sugar sales there has been a promising increase in market share, according to a 2010 study. With the support of fair trade Malawi has help in reducing its poverty.
Increased income is vital for a poor nation in which over 84 percent of workers are toiling in agriculture. Here average land holdings cover a very small area. Just one hectare. There is little room for expansion in this densely populated country. Since agriculture constitutes 90 percent of export earnings, it is vitally important to the economy. Thirty five percent of the GDP is contributed from this sector.
This nation is also one of the poorest in the continent. The per capita GDP is less than half the average of Sub-Saharan Africa. Its income inequality is the highest in Africa. Life expectancy is only 41 years. Its child mortality, HIV and AIDS mortality rates are among the highest anywhere.
Agricultural production was liberalized in 1994. This change brought new challenges. Liberalization caused a huge decline in commodity prices. Middlemen cheated smallholders out of their deserved earnings after 2004 when Government stopped directly purchasing goods.
Producers banded together to boost their prospects and improve their earnings. Over a hundred and eight thousand farmers joined under the umbrella of the National Association of Smallholder Farmers. The organization has set up mechanisms for training and to help in quality management. However, the international trading partnership offers these vulnerable smallholders another source of support.
The Fairtrade Foundation is the lynch pin for a trading partnership that seeks greater equity in international trading. It offers better trading terms for producers and agricultural labor in developing countries marginalized by the market. To join this partnership, farmers must follow environmental, social and economic standards. Social requirements demand upholding of labor rights and the following of democratic decision making processes so that all members can participate. The economic requirement ensures a minimum price which covers the production costs with a premium intended for community and business development. The environmental standards support sustainable agriculture practices and business development. Current efforts are targeting the diversification of crops to encourage local processing and bring added value to the existing practice, creating jobs and enhancing regional trading opportunities.
The partnership also encourages market buyers to support prefinancing and establish long term contractual relationships. This improves the playing field and brings added benefits to their customers. The customers benefit from the assurance of traceability and a guarantee of transparency. As consumers have become aware of the costs of industrial agriculture to them, they are willing to pay more for less compromised products. An increase in the number of ethical consumers willing to pay higher prices for less comprised products has been a boon for this special segment of the market.
Certification guarantees the principles are followed along the supply chain. Since its introduction in 2004 over 12,400 smallholders have been able to gain entry into the global market this way. The small farming families of the nation have seen significant impact in the commodities initially covered by the partnership. In tea, groundnuts and sugar sales there has been a promising increase in market share, according to a 2010 study. With the support of fair trade Malawi has help in reducing its poverty.
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