Creating wealth through a cooperative

The Phata Sugarcane Outgrowers Cooperative is to receive a $1, 6 million (MWK1.2 billion [Malawian Kwacha]) debt investment from AgDevCo for fixed and working capital expenses. Phata, a smallholder, farmer-owned, organisation was formed in 2011, in partnership with Agricane.

The smallholders who grew cotton and sorghum in the Chikwawa district of southern Malawi, combined their land to form a cooperative, and set up a contractual agreement with Agricane to manage their irrigated sugarcane plantation.

“The largest impact of this [further] investment should be to show how good management and a structure benefiting local communities, through a cooperative, can lead to increased production and income in the Malawian agricultural sector,” the European-based social impact agribusiness investor announced recently. Investor expectation is that Phata will ultimately become independent and capable of self-funding.

Phata’s roll-out of the second phase is signalled by the acquisition of 300ha of land, jointly owned by 880 farmers.

“The success of phase one and the upliftment of members has encouraged new members to join,” said Bouke Bijl, Agricane’s project manager for Phata.

According to AgDevCo, phase 1 of the cooperative venture showed encouraging success with Phata members earning dividends worth US$800/ha (MalawianK569 699) in 2015/16.

At start-up, several initiatives were developed to improve food security, including credit facilities, supply of subsidised maize, aquaculture development and crop diversification with irrigated mangoes, bananas and oranges.

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