No room for manoeuvre: debt prevents investing in the future

Article, 26 April 2020

This case study highlights the challenges that farmers in Malawi face when trying to intensify their agricultural production. It focuses on smallholder farmers in the Mwansambo area of Central Malawi. Mwansambo and neighbouring areas are important food and cash crop producing regions. But despite decades of agricultural development interventions, farmers are still struggling to feed their families and invest in sustainable land management. 

Two women sitting in a field

Women separating groundnuts from stalks in Mwansambo (Photo: Barbara Adolph, IIED)

Mgombe and Chikango are villages located 5km and 15km from Mwansambo trading centre, respectively. Most people in these communities are farmers, cultivating plots that average 1 to 1.5 acres per household. The main crops are maize (for home consumption), and groundnuts, soy beans, pigeon peas and tobacco for sale.

The region is semi-arid, receiving about 1,000mm of rain per year, with most falling between November and April. Many households keep chickens, and some of the better-off families keep goats.

Compared to other parts of Malawi, this is not a particularly poor area. Yet most people live in mud huts and have very few belongings. Life is harsh and because of the long dry season and lack of opportunities, there is a high rate of out-migration.

We visited nine smallholder farming households in two communities every few weeks over nearly two years, interviewing all adult household members. We wanted to understand how they make choices about farming practices. We focused on differences in decision making between households with different asset levels, and on the factors that prevent particularly poorer households from balancing economic, social and environmental objectives. 

Here is what we learnt.

Households have different capacities and constraints

All too often, governments and development agencies do not target their interventions to the needs and capacities of different types of households and their different levels of assets and resources. 

Even within the same community, there are large variations in farm and family size, which directly affects farmers’ livelihood options and strategies. A few farmers cultivate more than 10 acres, while others work plots of only half an acre. Some younger farmers and people who moved to the area from other parts of the country have to hire land. Farmers without secure land tenure are often unwilling to invest in sustainable land management. 

A group of women in conversation

We spoke with women farmers about their priorities (Photo: Barbara Adolph, IIED) 

Poorer households also struggle to balance their short-term needs for cash and food. They fit in paid work on other farms around the work they need to do on their own farm. Women farmers in particular have to split their time between domestic chores, working on their family farm and earning food or cash from agricultural labour on other farms. 

We spoke to four farmers about their hopes for improving their circumstances. We learnt that insufficient land and labour limit sustainable intensification options for smaller, younger and poorer households, who may have to take on agricultural wage work to make ends meet.

Farmers still depend heavily on external farm inputs

Most farmers in Mwansambo believe it is not possible to grow maize without inorganic fertiliser because the soil is depleted. To earn extra cash to buy fertiliser, they practise crop rotation, alternating maize (their food crop) with groundnuts (a cash crop). Farmers aim to use the cash income from groundnut sales to buy maize for food, and fertiliser for the next maize growing season.

But this strategy does not always work, because fertiliser is relatively expensive and is normally purchased on loan. Fertiliser application rates remain fairly low, and few farmers have enough livestock to fertilise their fields with manure.

There have been a number of government and NGO programmes promoting conservation agriculture (CA) – an approach that aims to improve soil fertility and soil structure by focusing on crop residue retention, minimum tillage and crop rotation.

But few farmers are implementing all of these practices, and farmers who have adopted elements of CA have usually received support from NGOs in the form of training and free/subsidised inputs. They emphasise the benefits from practising CA for soil moisture retention and soil fertility, as well as planting and protecting trees. 

Herbicides can be friends or foes

Promoting conservation agriculture – which relies on minimum soil disturbance through weeding and ploughing – has been accompanied by an increase in the use of systemic, broad-spectrum glyphosate-based herbicides. These are widely available in the local market in Mwansambo, despite their import being banned in Malawi since 2019.

Farmers are not aware of the environmental and health impacts of herbicides, and using them is often cheaper than hiring labour. On the other hand, many poorer households, in particular women farmers, prefer to use “social pool” labour (informal labour groups), which does not require immediate payment in cash. 

Farmers told how using herbicides enables them to reduce the time required for land preparation. But they get mixed messages about the use of herbicides. The agricultural extension services officer in Mwansambo told us that the agricultural department does not encourage herbicide use – but glyphosate is sold right next to his office.  

Market-oriented agriculture could mean being caught in a debt trap

Mwansambo’s farmers grow many cash crops: groundnuts, tobacco, cotton, paprika, rice, and – more recently – soya beans. Diversification away from maize has been supported by national agricultural policies as well as donor-funded development interventions.

But are farmers getting a good deal from the market? In Mwansambo, a small number of groundnut traders dominates the market, making it difficult for farmers to get a good price. Most farmers are not organised in groups or cooperatives and sell in small quantities at the farm gate or the local market in Mwansambo. 

High prices for agricultural inputs, low prices for farmers’ produce and the absence of affordable credit, combined with low productivity because of pests and diseases and climate change impacts, means that many farmers end up in debt. They cannot farm without borrowing money for seed, fertiliser and other inputs, but their income after harvesting is hardly enough to pay back the loans, leaving some of them destitute.

Coping strategies such as selling firewood (prohibited by local bye laws) are common, and many farmers migrate seasonally in search of wage work. 

In such situations, improving soil fertility via mulching with residues or applying organic matter (manure or compost), and protecting or planning trees, is almost a luxury. Even those farmers aware of the potential benefits of these measures are struggling to find the time and resources to implement them. 

A field with maize residues

The residues left in a field after harvesting maize. Using crop residues to improve soil fertility can seem like a luxury (Photo: Barbara Adolph, IIED)

Indebtedness also causes family tensions, in particular when husband and wife have different views about necessary expenses and about the right mix of cash crops and food crops. We found that women gave more importance to household food self-sufficiency, whereas men prioritised cash crops so they could buy food with the proceeds.

We spoke to farmers about their experiences of debt – what the terms of borrowing are and how debt affects them and their families. They understood the consequences of taking out loans, but didn't have many choices.    

What needs to change?

There have been many agricultural development interventions in Malawi, aiming to increase agricultural productivity in a sustainable way. But there is not much to show for them after the initial support (often in the shape of subsidised inputs) has ended. 

Farmers are clearly struggling to meet their basic needs while also investing in sustainable land management – a pre-requisite for sustainable intensification. 

We have identified ten actions that could help create a more enabling environment, so that in particular poor farmers could transition towards more sustainable practices:

  • Ensure that NGO, donor-funded and government projects and programmes are designed and implemented based on evidence and on previous experience – so that the same mistakes are not repeated.
  • Ensure agricultural development interventions are informed by a clear understanding of context-specific farm and household economics – so that they fit the local context.
  • Support a transition to a system where farmers make the decisions, taking an approach that works with nature rather than against it, depending less on artificial inputs; rewarding farmers for taking a long-term view of agricultural productivity.
  • Improve targeting of farm households for interventions (so that the poorest people benefit most) and avoid working with small sub-groups or creating dependence on free handouts.
  • Work through local leaders to create and enforce bylaws – for example, on burning crop residues, conservation agriculture, agricultural expansion, land degradation and deforestation.
  • Strengthen women farmers’ institutions and access to resources.
  • Support the development of inclusive smallholder farmer groups/cooperatives to help diverse groups (men and women, richer and poorer individuals and locals and new arrivals) to access fertiliser and other inputs and practice conservation agriculture.
  • Support asset development for poor farmers, particularly acquiring livestock as a safety net and for soil fertility improvement from manure.
  • Build on and improve existing approaches to community-based grain storage to help farmers obtain a better price for their produce, including developing, piloting and rolling out inventory credit systems.
  • Enforce regulations on herbicide and pesticide labelling, sale and advice, and train farmers in responsible use of agro-chemicals as part of an integrated control strategy.

Additional resources

Trade-offs in sustainable agricultural intensification: the farmers’ perspective, Barbara Adolph (2020), IIED Briefing paper

IIED is working with partners in Burkina Faso, Ghana, Malawi, Senegal and the Netherlands on the SITAM project (Supporting smallholder farmers’ decision making: managing trade-offs and synergies for sustainable intensification).

Contact

Barbara Adolph (barbara.adolph@iied.org), principal researcher, IIED's Natural Resources research group

Was this page useful to you?

Share and have your say: