longitudinal impact assessment study of sugar producers in malawi

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Board of Directors Kasinthula Cane Growers Ltd SHIRE VALLEY CANE GROWERS TRUST Board of Trustees Trust Manager General Manager Trust Administrator Trust Accountant Finance Manager Operations Manager Farmer Main Committee Farmer Sub- Committee FARMERS HR Officer IT Officer Accountant Farm Managers W/shop supervisor HR Clerk Admin Asst Asst Accountant Cleaners Water treatment Asst Supervisors Stores Clerk Accounts Clerk Capitaos General Workers Driver FT Clerk Trust Clerk Drivers Electrician General Fitter Mechanic Asst Electrician Handyman Asst Gral Fitter Handyman Welder Tyre fitter Handyman Asst Tyre fitter
The limiting factors to the success and scope of KCGL’s vision are the relatively small land area under cane, the debts incurred in developing Phase II, the low yields obtained by farmers and the large labour force involved in the production and harvesting of the cane. Phase III will help to resolve the land issue, and already there is talk of a Phase IV (while this expansion is driven by Illovo to supply its factory, the subsistence farmers that become members of Phases III and IV are likely to see a rise in the food security and standard of living as a result as long as the sugar market is favourable). The sugar cane plants are burnt and cut manually by KCGL-contracted cane cutters, then transported by a contracted transporter who delivers the sugar cane to the Illovo Malawi Sugar Ltd mill, approximately 25 km away. Although reliable, the contract with the cane transporter is weighted in their favour, with a clause increasing the charge/km/tonne as distance increases and also a standing charge for vehicles out of season when they are not being used. The by-products of the milling process are sugar and molasses. The sugar is sold in the local and export market and the molasses is mainly for the local market, with no immediate prospect for export. There is no Fairtrade minimum price payable for sugar (following consultation with producers), but the Fairtrade Premium is generous at US$60/tonne of sugar. If there were no debts, the present prices paid for sugar would provide a good income for the producers. As it is they have had to resort to using 40% of the Fairtrade Premium to supplement incomes until the debt burden reduces. However, if the sugar price collapses, the farmers will be very vulnerable as they are very dependent on sugar incomes. KCGL procures all its production inputs from Illovo Sugar Malawi Ltd. There is a 25year contractual agreement between Illovo Sugar Malawi and KCGL that binds KCGL to deliver all its sugar cane to Illovo. After milling Illovo Sugar Malawi Ltd calculates all the production expenses, including overheads and the price of sugar is calculated as an average of the various markets. All KCGL members are paid a set amount each month (MK12000 = US$84.5) as an ‘advance’ and are then paid a 'backpay' after the sale of the sugar in the various markets on a pro-rata basis. Payment for molasses is done by Illovo Sugar Malawi Ltd on a yearly basis after the milling season. Commercialisation and marketing of the final product (sugar) is done wholly by Illovo Sugar Malawi Limited. The Illovo management charges to KCGL are reported to be high (11% of turnover up to 2007, amounting to about US$250,000/year). More recent figures were not available. The association with Kasinthula has been a very good development for Illovo, providing needed additional cane to help the mill operate at full capacity and providing the Fairtrade certification that helps to market the sugar. This is more so now because Illovo has plans of expanding the mill. The factory expansion will mean a guaranteed market for the cane produced by Kasinthula Phase III farmers. Illovo works closely with Kasinthula management and farmers. Illovo management staff visit Kasinthula about once per week, and Illovo supports the farmers there with bulk-rate inputs (including cane planting materials), free extension advice, repairs to irrigation pumps and the loan of machinery at cost price. As Illovo management says: “It is in the interest of Illovo to see an increasing number of Kasinthula smallholder farmers produce good yields and be viable, professional cane producers”.
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 and 16: 6. Support to KCGL from TWIN/TWIN T
Page 17 and 18: 7. Findings of the study 7.1 The pr
Page 19: There are now plans for a Phase III
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

longitudinal impact assessment study of sugar producers in malawi

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