Lack of access to refrigeration and markets means Malawian farmers lose up to half of their produce post-harvest – this was one of the main drivers of the Renewable Energy for Agriculture project by Practical Action and our partners in the north. Malawi.
This work has enabled rural women farmers to grow high-quality crops, store food efficiently, secure regular supply contracts with local private sector buyers, and gain access to renewable energy technologies that help them generate reliable income.
Our knowledge of contract farming and the productive use of renewable energy captures our evidence and learning – visit the Practical Action website or get in touch to learn more about the project.
Farming is difficult in the arid lakeshores of northern Malawi. In Chintheche, a small town, most of the men fish for a living and often leave the women in the village home responsible for taking care of the land. As farmers, women also face additional barriers, including limited land and financial resources, and lack of time to earn money due to family concerns.
Practical Action and Modern Agricultural Technologies (MFT), a local social enterprise in Malawi, engaged women in the community in developing agriculture-based solutions to map opportunities and define what effective interventions look like. Together, an agro-energy business model was developed. The Renewable Energy for Agriculture Project (RE4A) was launched in 2021 and has led to successful business development supporting women farmers.
How did it work?
The project started with 18 farmers and grew to 45 greenhouses managed by 135 tomato farmers within two years. The contract farming business model follows this approach by providing a complete solution for MFT farmers:
- With the help of farmer cooperatives, women farmers come together in groups of three to buy farming inputs such as tomato seeds and fertilizers.
- Through a rental scheme, MFT provides farmers with equipment including polytunnels, drip irrigation kits and solar water pumps.
- Farmers receive training in managed environment farming and regular advisory services from agricultural staff at MDT.
- To reduce post-harvest losses, renewable energy producer African Mini Grids built a stacked solar chiller using an old shipping container.
- After the women harvest the tomatoes, MFT buys the produce from the farmers, keeps it in the refrigerator and supplies it to future buyers.
- All Tier 1 products are sold to the MFT by farmers who are subject to fixed rental payments of 25% of the sales value at source. Other products are sold independently by farmers.
After the payback period ends, the women will own greenhouses and irrigation pumps after three and a half years of harvesting and selling.
Proof of success.
One of the main successes of the project design is that the women work in their greenhouses, in group shifts, for only 10 hours a week. This allowed them to attend to other caregiving responsibilities and tasks. Despite the small time commitment, farmers reported an average increase in earnings of 38%, with 80% reporting that greenhouse farming had become their main source of income. In the first year, women worked 10 hours a week and earned a net annual income of €648, which is 57% of the total household income figure. The project not only eliminated time poverty but also reduced labor and post-harvest losses through the productive use of renewable energy technologies including solar irrigation kits and solar refrigeration. Women have mastered a set of skills in advanced farming practices and more importantly, managed the sale of MDT products to various markets, earning a reliable income through the contract farming model.
Lydia, one of the farmers, stated that the key point of the project is the leasing scheme, which allows farmers to keep the equipment after a certain repayment period.
He said:
“I signed up for the project to earn more money to support my family, but in the last few months I have earned more. I had the chance to learn how advanced farming works: composting, planting other crops, tomato turf, pest and disease control, and how to use a solar irrigation pump – which I will own one day. I feel happy knowing that I will have a greenhouse and pumps. We’re all committed to the payback period because we never owned the equipment or the assets.”
Collectively, the women have harvested more than 43,000 kg of tomatoes, and over time, their decision-making skills and entrepreneurial confidence have improved.
It demonstrates the contract farming business model of MFT and Practical Action
A critical interaction between three variables: access to renewable energy assets, agricultural productivity and access to markets. All support each other and the absence of one makes it difficult to reach the others. In this niche market in northern Malawi, the one-stop-shop model provided by MFT proved to be the case. A large part of the costs of the business was covered by a grant of about 300,000 euros. Available data suggests that 4 years of rent payments and sales would be sufficient to support a doubling of the number of farmers in the scheme (by extending the rent to their own scheme). This will result in more than €470,000 being injected into the local economy through increases in farmers’ incomes – a 163% return on the initial grant investment.
Over the course of 2 years, the project worked well for farmers and proved that alternative funding measures to support farming communities, including grants and commercial funding, can be effective. This unique model demonstrates that contract farming is a viable strategy for women farmers to provide access to energy assets while also providing them with an attractive income.
Renewable Energy for Agriculture (RE4A) is a project supported by grants from GIZ and the Renewable Energy Opportunities Program (funded by the Ikea Foundation and UK aid). This is a 2-year project where Practical Action is working with the social business Modern Farming Technologies (MFT) in Malawi to pilot a contract farming model that supports access to renewable energy for small-scale farmers.
The pieces of knowledge we gained from this project shed more light on:
- Interdependence between providing productive use of energy assets, supporting agricultural production and access to agricultural markets.
- How grants and commercial funding can be used to boost business development for small farmers and SMEs.
visit the Practical Action site our to download short studyread it touching stories from ours blogs pageor please contact us to obtain a business model report.
