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Advances in Smallholder Tea Farming in Malawi
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Advances in Smallholder Tea Farming in Malawi
Zomba Pearls
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Advances in Smallholder Tea Farming in Malawi
Teas are hand-plucked by specially trained workers.
Opportunities for smallholders growing tea are changing for the better in Africa and around the world
By Jane Pettigrew
Malawi has been growing tea commercially since the beginning of the 20th century. It was the first East African country to develop tea estates and is today the second largest producer in the region after Kenya, and eighth in the world, with an outturn of 42 million kilos per year.
Smallholder farming was established in 1964 in three districts – Nkhata Bay, Mulanje, and Thyolo – with support from the Smallholder Tea Authority (STA) under the Ministry of Agriculture, the Malawi government, and the British Commonwealth Corporation (CDC). The Tea Authority provided seedlings, fertilizer, training, and extension services as well as advice and support with pest control, transportation, packaging, and marketing. The authority paid farmers promptly for their green leaf. The sector grew rapidly, farmers prospered, and by the 1980s, smallholders accounted for 14% of land under tea and 7% of production. But in the 1990s, a change of government, the liberalization of the economy, the privatization of previously state-owned companies, and the re-organization of the STA resulted in the collapse of the support systems, late payments for farmers, the closure of some tea factories, and despondency and low morale among the farmers.
Gradually, new alliances were formed between some of the smallholder farmers and six private tea companies – Lujeri Tea Estates, Eastern Produce (Malawi) Ltd., Makandi Tea and Coffee Estates, Satemwa Tea Estate, Confornzi Plantations, and Zoa Tea Estate. The main purpose of those new partnerships was to increase smallholder production, ensure the earning capacity of the farmers, provide loans for inputs such as fertilizer, seedling plants and equipment, and organize training programs for growers.
Smallholder partnerships
As in other parts of the world, Malawi’s smallholders always found themselves at a disadvantage in terms of the low prices they could command for their harvested leaf, their lack of bargaining power at the factory door, high costs of production, lack of funds, lack of education, and literacy skills, shortage of available land, lack of transportation, limited access to markets, and a lack of marketing skills.
Today that is beginning to change and some of the private companies are now working closely with their local farmers to ensure that they receive support and a share of the profits. At Lujeri Tea, where more than 6,000 smallholders provide 15% of the crop processed at four factories, farmers are paid promptly for their leaf and receive half-yearly bonuses based on factory profits and prices paid at the Limbe auctions. At Eastern Produce, a general manager and field officers provide management advice, agronomic guidance and training to 7,500 smallholders who supply 33% of the company’s green leaf.
Some of the farmers and are even registered with Fair Trade under the Sireet Outgrowers Empowerment and Producer Company Limited (SOEP), and funds received from the sale of the Fair Trade certified teas go back into the community to pay for such requirements as a clean water supply, medical dispensaries, and accommodation for teachers.
Advances in Smallholder Tea Farming in Malawi
Satemwa white peony
Satemwa’s tea projects
At Satemwa, a privately owned tea and coffee estate established in 1923 in the Shire Highlands by Maclean Kay, and today run by his grandson Alexander Cathcart Kay, 500 tons of green leaf is supplied every year by the Msuwadzi Small Holder Tea Growers Association. The Association started in 1998 in North Thyolo district and includes 198 male and female growers, who cultivate tea on five blocks of land.
On average they farm plots of one and a half acres (half a hectare) and grow mainly tea, some maize and small quantities of tomatoes. Satemwa is helping them to diversify into other crops such as mint, lemon verbena, and flowers such as hibiscus. In 2009 the smallholders obtained Fair Trade, Rainforest Alliance and UTZ certification. Satemwa, also Fair Trade, rainforest and UTZ certified, helped the farmers through the process of acquiring the certifications and also funds an outgrower manager who works with the farmers on production and capacity building.
The Satemwa estate also has a primary school with eight standards, 900 students, and 20 teachers, a crèche for working mothers, football and netball teams, and a clinic that is open 24 hours a day, seven days a week, and has an ambulance, two nurses, a doctor and administration staff. The company offers 130 scholarships every year to students who wish to continue their education.
Around 90% of the tea produced at Satemwa is black tea, but since 2005, it has also produced a range of top quality specialty white, green, oolong, black, and dark fermented tea (rather like loose Chinese Puer). The new crops of herbs and flowers grown by the smallholders are blended with Satemwa specialty teas and sold into the local and regional market and in bulk to European wholesalers.
Advances in Smallholder Tea Farming in Malawi
Jonas Makata, 77, is one of Satemwa’s 198 independent small holder tea farmers. With this smallholder grown leaf Satemwa created a new unique specialty tea variety: #418 Small Holder Black OP1. Makata not only gets a better price for his hand-plucked green leaf, he also shares in the profit when Satemwa sells the tea.
One of the goals of the Satemwa-Msuwadzi partnership is to involve the growers in the value chain by enabling them to own their own branded tea lines and sell the teas through Satemwa’s direct trade network. The smallholder’s brand, YAMBA Tea, is processed, packed, and distributed at the Satemwa factory and then sold into the Malawian and Zambian market. For each pack of Yamba sold, Satemwa pays a royalty to the smallholders, who own the brand and can decide after five years how to continue. Satemwa is also training the farmers to improve their plucking standards and, with better quality leaf, the company can make more of their high end, specialty teas that are then sold direct to customers around the world. Satemwa pays a premium for the high quality green leaf and the smallholders share the profits. The longer-term aim is to train the smallholders to make their own teas, white to begin with, and then to sell them through Satemwa’s network. Satemwa has recently established an office in Belgium, under the direction of Wouter Verelst, in order to more readily supply specialty tea rooms and stores in Europe and the USA.
The challenges
Although both Satemwa and The Msuwadzi Association are Fair Trade certified, they are both highly dependent on a small number of customers who are prepared to pay the extra premium. Some customers who previously purchased Fair Trade products have recently, for no apparent reason, stopped doing so and this has reduced the amount of money available for audits, certification and projects. The price received for the bulk of the teas is dependent on world prices, and investing in the more costly production of the specialty hand-made teas is a risk, especially since markets and demand are unpredictable and Malawi, as a land-locked country, find it hard to sell its teas outside the local markets. Direct trade between producer and retailer is the most desirable route since it guarantees traceability and transparency and builds a valuable relationship between those who make and those who sell and this is Satemwa’s preferred way of working.
In 2015, Satemwa and Msuwadzi established three main goals that will drive their work in coming years. In 1935, Mclean Kay was the first tea grower in Malawi to employ women workers, and gender equality is high on the list of priorities. Women work alongside men in all parts of the estate, and some facilities (for example, the water cleaning facility and the specialty tea department) are operated solely by females. The second goal is to manage climate change and work towards a sustainable environment. Natural areas and forests in Malawi have been decreasing over the past 20 years, mainly because of a rapid increase in population, and this has led to a loss of habitat for a number of indigenous animals and birds. Satemwa has increased its natural areas in order to maintain an ecological balance by cultivating a wide range of trees, shrubs, and flowers, by protecting natural corridors where native animals can live and move around freely, and by looking after clean flowing rivers and streams.
The third goal is to sign up for the UN Global Compact and establish direct trade partnerships that will help make Satemwa and the Msuwadzi brand more visible.
Traceability is a major concern at Satemwa and in each field on the estate, a stone is inscribed with the origin of the tea plants, the area of the field in hectares, and the year the tea was planted. When the bushes are plucked, supervisors keep track of the batch number of the tea harvested from a particular field, and each batch is monitored throughout the entire production process. Tasters approve each batch and then the teas are packed and marked with a unique code so that customers know every detail of each tea. More and more retailers today want to know as much as possible about the teas they sell, and Satemwa’s collaboration with the Msuwadzi Small Holder Tea Growers Association makes an impressive story.
Learn more from Wouter Verelst at wouter@satemwa.com