longitudinal impact assessment study of sugar producers in malawi

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Table 6.1 TWIN/TWIN Trading Ltd Partner-level indicators (version 13/02/08) Basic business indicators Market access and trade Management, Governance and Members Issue/Area Proposed Indicator 1 Production Volume (MT) of produce procured/ collected at primary level (main crop) 2 Turnover Turnover 3 Business sustainability and members' commitment/ understanding 16 Value of annual contribution to reserves (total and as % of trading profits) 4 Profitability Total trading surplus as % of turnover (before second payment) 5 Liquidity Total pre-finance obtained as % turnover 6 Cost efficiency Total costs (fixed and variable) per unit (kg/lb/bag) 7 FT market share % of sales to FT market 8 Added value sales Sales to premium markets (FT, organic and gourmet) as % of total sales 9 Price differential of added value sales % difference between average price of added value sales and average nonpremium sales price 10 Market risk/ diversification % of sales to biggest and top 3 buyers 11 Certification management Number of 'Major Non-Compliances' from FLO and organic certifiers 12 Quality management Number of contracts out of total not meeting contractual requirements (for Twin or, if possible, for all contracts) 13 Financial management Length of time between accounts are signed off by auditors (where applicable) OR how up-to-date are the accounts?* 14 Membership Total number of active* members (male/female) 15 Women participation Africa: number of women in formal leadership (all levels) and management positions (% of total) Latin America: number of women participating in separate women's activities 16 Fairtrade social Premium income Total Fairtrade social Premium income and per member 17 Non-business services Number, value or number of beneficiaries of non-business services provided to members
7. Findings of the study 7.1 The producer and processing organisations The irrigation scheme that is now Kasinthula Cane Growers Ltd started in 1964 as a Government rice scheme. This lasted until 1997, at which time the Illovo sugar cane factory expanded and was looking for more raw cane to process and sell on. On changing from rice to sugar cane, the government transferred ownership of the land to the farmers, creating Kasinthula Cane Growers Ltd (KCGL). Although production changed from a food crop to a non-food cash crop, food security was not negatively affected because farmers have access to irrigated land to grow their food crops and have an income with which to buy food. A Trust was also established - the Shire Valley Cane Growers Trust - in which 95% of the shares of the KCGL are owned by the Trust (i.e. by the farmers), and the remaining 5% are owned by Illovo Sugar (Malawi) Ltd. The rice land became Phase I of the KCGL. Subsequently a Phase II was established. The area for the two Phases is given below: Phase I 312.8 ha Phase II 441.9 ha Total 784 ha (of which 754 is irrigated sugar, and 30 ha other crops [mostly subsistence food crops]). Phase I farmers each have 2.5 ha of land, while Phase II farmers each have 3.0 ha part of which is allocated to maize. The total number of farmers is 282, of which 91 are women (an increasing proportion year by year). Day to day running decisions are made by management staff , while strategic decisions are taken by the Board of Trustees. The Board of Trustees and the Board of Directors both have farmer representatives, such that farmers are involved in decision-making. Membership of the Shire Valley Cane Growers Trust Board Ten members include farmers, Illovo staff, lawyers, chairpersons, local leaders and representatives of local organisations Membership of the Kasinthula Cane Growers Ltd company Board Ten members include farmers, Illovo staff, lawyers, chairpersons and accountants Previously (farmers report) there were poor relations between farmers and KCGL managers. However, new management has recently been appointed; and is improving relations through the application of good management practices. This is also starting to improve cane husbandry, which will in turn improve yields, the economic efficiency of production and income for farmers. The Trust was primarily set up to enable farmers to receive financial support from donors, as a not-for-profit, development entity. On the other hand, the Trust owns 95% of the KCGL company, which has its own staff and a commercial agenda to grow and sell sugar cane. This arrangement easily creates conflicts. The Chairman of the Board of the Trust is an agricultural person and that of the Company Board is an accountant. The perspectives of the two Chairpersons do not always coincide. 17
Page 1 and 2: LONGITUDINAL IMPACT ASSESSMENT STUD
Page 3 and 4: Executive Summary The study This st
Page 5 and 6: • Food security for producer hous
Page 7 and 8: Contents 1. Introduction Page 8 2.
Page 9 and 10: 3. Methodology This study is a long
Page 11 and 12: 4.2 The sugar situation in Malawi A
Page 13 and 14: Malawi exported sugar during the ye
Page 15: 6. Support to KCGL from TWIN/TWIN T
Page 19 and 20: There are now plans for a Phase III
Page 21 and 22: The limiting factors to the success
Page 23 and 24: Cane transport Concern Universal En
Page 25 and 26: Table 7.1 Labour employment by KCGL
Page 27 and 28: Major economic and social benefits
Page 29 and 30: demands have come from villages out
Page 31 and 32: KCGL employees do not feel that the
Page 33 and 34: 1998 MK400 fortnightly (MK800 per m
Page 35 and 36: He plans to build a house of his ow
Page 37 and 38: A grocery shop at Dyeratu Trading c
Page 39 and 40: The relationship with the KCGL Boar
Page 41 and 42: The disciplinary committee oversees
Page 43 and 44: Frequent ploughing out and replanti
Page 45 and 46: 8.5 Changes in local, regional and
Page 47 and 48: 9. Improving impact 9.1 Producer st
Page 49 and 50: and their solutions in order to imp
Page 51 and 52: Number of families receiving money
Page 53: to 282 farmers in March 2010. These

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