NASFAM Associations on track to attaining financial independence

Chilli Sauce manufactured by Zikometso Association in Mulanje

NASFAM, through its five-year Strategic Development Plan (SDP) III, challenged itself to turn its associations into self sustaining business entities. That dream is fast being materialised.

“Under the first two strategic plans, major emphasis was placed on putting an institutional framework in place that would support delivery of services to NASFAM associations and their member smallholder farmers – all within the context of farmer-driven operations. At the heart of NASFAM was belief that smallholder farmers could and would contribute to improving their own livelihoods if the means to do so were available,” reads part of the Strategic Development Plan III.

“To make these means available, NASFAM associations were organised as vehicles through which member farmers could achieve economies of scale and access to resources by banding together. Components of the NASFAM structure were designed to enable the system to interact with both private business initiative and donor interests and requirements. Particular attention was paid to NASFAM financial and accounting systems and NASFAM earned a reputation as a reliable development partner. By the end of the second strategic plan period, NASFAM was referred to by one major donor as a ‘strong and organised producer association...,’” reads another portion in the same SDP III document.

This is what had set the footing for the initiative and it gave NASFAM confidence to embark on the ambitious journey of developing associations into independent profitable business entities.

 

The NASFAM Business and Institutional Development Manager, who is also the acting Head of Business and Marketing Development, Mr. Henry Kalomba is certain that NASFAM is on course of attaining its objective. Kalomba says most associations (through their IPCs) have grasped the idea of Innovation and Productivity Centres (IPC) and they are working strategically to establish viable ventures that will become reputable brands in the near future.

Kalomba cited several associations that are currently engaged in income generating activities as well as legally registered businesses with the aim of generating additional income to what they earn from crop sales. Such associations include: Karonga – they are processing and selling Kilombero Rice; South Mzimba – they are processing cooking oil from sunflower and they are at an advanced stage of getting certification from Malawi Bureau of Standards with support from United Nations Industrial Development Organisation (UNIDO); Lilongwe South – where they are producing chicken feed; and Zikometso in Mulanje – where they are producing chilli sauce and other spices, just to mention a few. According to Kalomba, the certification process for zikometso chilli sauce has also started and will finalise soon to enable consumers experience a new taste of chilli sauce like no other.

“Phalombe Association is also in the process of establishing a cooking oil factory. The oil extraction machinery has already been installed and we await power connection from Electricity Supply Commission of Malawi (Escom). Once power is supplied, we will begin oil extraction from sunflower. We are also working on purchasing a refinery machine through a project under the Ministry of Trade and Industry to make sure that we give customers already refined oil”, says Henry Kalomba.

Considering that such investments require a considerable amount of capital, Kalomba says NASFAM encourages its associations, through their IPC management to develop business proposals to tap from available donor funding as one way of boosting their businesses. He says most of the initiatives mentioned above are a result of a proactive approach of tapping on existing opportunities to establish profitable businesses. “In line with that arrangement, this year, Lilongwe South IPC has received a grant of US$10,000 from U.S African Development Foundation (USADF) which will enable the association venture into oil production from soy bean. This is the proactive approach we are promoting among our member associations”, Kalomba adds.

On another note, Balaka Association, though without a defined business brand or commodity, saw an opportunity to make money from the dry spell that affected Malawi in the ended growing season. They responded to the call to supply potato vines and cassava cuttings through the ASWAp project and realised a profit of 30Million Kwacha. According to Kalomba, this is in line with the NASFAM’s Strategic Development Plan’s Strategic Impact Area (SIA) 3 which talks of expanded business opportunities and linkages for its member associations. Through this SIA, NASFAM aims to take farmers up the value chain through linkages with private sector businesses. With such initiatives, farmers have an assurance of receiving quality service delivery in promoting their farming business and improving their livelihoods.

"Give a man a fish and you feed him for a day; teach a man to fish and you feed him for a lifetime", is the guiding principle motivating NASFAM to empower its member associations to establish notable business entities. NASFAM has invested a lot in training its members in business development both at individual level and association level.

“We have spent a reasonable number of years working with our members training them in issues like collective marketing, business development, business plan development and other important subjects that matter in their farming business. The trend we have seen gives us confidence that come September  2017, when we will be finalising our SDP III, we will be able to look back and smile at the progress we have made in improving the livelihoods of smallholder farmers in the country”, concludes Kalomba.