10 reasons why oppose the setting of Fair Trade Minimum Prices for NIS

1. Only after processing can the true value of NIS be determined
2. Encourage early picking i.e. increase proportion of immature nut in factory consignments
3. Predatory trading, enable buying from individual farmers undermining smallholder organisations
4. Create a parallel value chain which will confuse farmers, organisations, factories and market
5. 'NIS' in terms of grading, handling and moisture content has not been defined but kernel styles are recognized throughout the value chain
6. It is unclear at who will be responsible for monitoring NIS purchases
7. The quality chain will be broken making factories unable to feed back quality results to farmers enabling them to improve quality
8. Traceability chain will be less accurate and reliable to inform market
9. Cooperatives have no power to influence the value chain if they simply sell NIS to a factory
10. Opens door for estate sources of macadamia to enter Fair Trade supply chains before smallholders have been given an opportunity to supply these markets

Dr Wayne Hancock leading a whip grafting training session in Ntchisi. The whip grafting technique can be applied in the field and provides a better grafting union enabling more vigorous canopy development. The technique is versatile enabling 'top working' to be done in the field thus giving smallholders the capacity to change or update varieties in the field.

Communicating Quality through buying systems

The Malawi smallholder supply chain works by cooperatives buying NIS from the farmers and bulking it at district level, this enables quality based buying system, maintenance of quality and manage moisture content while waiting for a processing slot at the factory. The cooperative in turn receives payment for saleable kernel based on the style breakdown derived from a factory gate quality control assessment. This chain is quality driven, which provides an incentivised system on quality to smallholders growers and their cooperatives and is accepted by the industry in Malawi including the smallholder cooperatives. This is preferred by customers and processors as it is compatible with existing industry structure; and has been endorsed through consultation meetings with Malawi cooperatives. . The quality feedback loop is essential to facilitate continual improvement in NIS quality and thereby increased the value of NIS and reduce risk in the value chain for smallholder organisations (for example factory consignment rejection). This system enables and empowers cooperatives to fully understand and manage quality and as well as hold a secure position value chain. Macadamia as a high value/ quality product requires quality management from field to factory for its value to be maintained/ enhanced. NIS buying needs to be flexible and reflect the true value of the kernel contained inside the shell. The nut has a thick shell and it is challenging to accurately assess the value of NIS before it has been processed NIS varies greatly in moisture content fresh nut is 20% moisture, farmer dried this can be reduced to 10% and dried at farmer organisation can be brought down to 4%. This obiously has a large impact on the value of NIS. However in Malawi the development of a NIS market will not be welcomed by cooperatives or factories because it will pin cooperatives low down the value chain and factories and end customers will lose traceability of crop. A NIS market was established in Malawi for export to China in 2011 which led to an increase in NIS theft from estates. Theft is a major issue and any changes to the supply chain structure which make it easier for stolen nut to renter the export supply chain will not be supported by processors nor strategic estate partners. It will also be break the quality feedback loop to the farmers via their cooperative that has been established using the quality assessment at factory gate. This assessment not only provides a % breakdown of styles but also information about levels of insect damage, immaturity, mould and even indicates nutrient deficiencies eg: boron, all of which are useful for extension work with farmers. Climate affects shell thickness and pest population as such there is limited variation in crackout or kernel recovary. However sellable kernel recovery is mainly influenced by handling (post harvest, drying, pest management, tree nutrition, seasonal influence) figures are improving annually as we focus on quaity and promote good practice. This is possible by linking quality samples from the factory for each farmer with advice on post harvest handling. In the system established in Malawi the smallholders operate quality based buying operations, post harvest drying sorting and bulking facilities and transport to factory. Bulking at district level leads to the grading out of crop that may be rejected at factory saving unnecessary transport costs. This generates crop volumes at district level which enable cooperative to exploit local and national markets. Macadamia has a number of very useful bi products such as oil, meal and shell which have benefits for local diets and fuel use. In Australia the leading exporter in terms of volume and quality globally the industry is predominantly made up of small and medium sized farms which bulk NIS for sale into factories it is the industry norm to be paid based on kernel recovery. This structure is very similar to the association/ cooperative bulking supply chain being established in Malawi which will supply into a processing factory. This system has been established because being paid based on kernel recovery is the most accurate way of capturing the value of your farms crop and thereby reducing risk for both factory and producer. In addition for quality to improve it is essential that good practice is rewarded and that high quality does not subsidise low quality. Kernel recovery is based on varietal (genetic) and climatic conditions.

TLC-HIMACUL contract on Kuleria Biodiversity Project

TLC (Total Land Care) have contracted HIMACUL to supply macadamia services to the Kuleria Biodiversity Project. This large natural resource management project is working within 10km buffer zones around important areas of Biodiversity including Ntchisi Forest Reserve, Nkhotkota Game Park and Nyika National Park. The HIMACUL has established a large stand of macadamia, the majority of which is still to mature. As such, the organisation is in a transition phase between a crop establishment focus and commercial production. The HIMACUL has successfully established systems to handle and buy nuts. However, this system needs to be scaled up as more members enter into production and the volumes grow. Present volumes of nuts are insufficient to supply all the support services to facilitate this transition and therefore the HIMACUL will require focused support in scaling up commercial activities such as crop buying and post-harvest management. Further work is required in adding value at HIMACUL level to non-export quality nuts in shell through processing into products such as oil, animal feeds and shell products. Demand for trees is still high in all areas and, as such, maintaining the tree propagation and supply system is needed to support longer term development of volumes. The HIMACUL has a strategic plan to complete establishment of orchards with members over the next 3-5 years. Supply of trees has greatly increased over the past 3 seasons due to investment in nursery capacity and use of innovative establishment techniques. HIMACUL capacity to manage crop establishment, commercial systems and develop farmers skills is in place but requires further development in order to effectively develop the necessary skills to enable commercial success. Closer links to the existing industry need to be further nurtured and reinterpreted for the smallholder sector. HIMACUL staff members require a better grounding in commercial realities in the business and develop sound understanding of the industry and strategic goals in order to effectively communicate to farmers and leaders on the ‘bigger picture’. Purpose The purpose of this project consultancy is to foster sustainable micro-enterprise development through support for cooperative activities which promote sustainable agricultural practices, further increase the areas planted to macadamia and enable the development of macadamia based enterprises / income streams. This input will further the development of macadamia as a smallholder diversification crop and will enable HIMACUL to identify and address some key constraints and gaps in the current system. This consultancy will allow the HIMACUL structure to move to the next level while focusing activities towards sustainability and profitability. Scope of Services Work with the Kulera Project will extend HIMACUL activities and enable greater impact as well as developing further capacity within the existing structure as defined in the Terms of Reference. Services will be provided by already established structures and personnel at the existing locations as “the consultants”. HIMACUL has capacity to deliver stated activities and providing all of the services required in this contract. The consultants will be reporting directly to TLC with monthly activity and expenditure reports while TLC will be responsible for financial accounting to USAID. The consultants will ensure the continued development of the supply chains and smallholder support systems. Duration of Contract This service contract will commence in July 2011 and final submission of reports will take place July 2012.

Registration of New National Macadamia Body

The smallholder macadamia industry in Malawi took a large step forward in July 2011 when the first national level organisation was registered. HIMACUL the highland macadamia cooperative union limited is designed to coordinate activities int he smallholder sector and represent commercial interests of geographically dispersed cooperatives. HIMACUL binds all the cooperatives in the country together to enable group processing and marketing of produce. Also addressing technical challenges which affect all members will create efficiencies of scale as expertise can be shared between a number of organisations.

FLO price review

HIMACUL have applied for FLO certification, all documents have been submitted. The inspection is on hold pending the results from a price review are completed. The price review is looking at if a NIS minimum price should be put in place which would replace a FOB kernel based minimum price. We are doing everything in our power to stop the setting of a NIS price as it would be detrimental to the value chain set up in Malawi, create a market for NIS and break the quality feedback chain. I will keep you posted

Stakeholders can contact me for draft copies of the Malawian Macadamia Industry Strategic Plan on nicholasjevans@gmail.com or skype on nicholasjevens.

Business Innovation Facility

I am happy to announce that the Business Innovation Facility (BIF) will support Wayne Hancock and I to run the strategic plan meeting and provide support on some of the economic elements of the strategic plan. Operated by Imani a Blantyre based consultancy company the facility promotes inclusive business models and provides match funding for appropriate businesses.

Macadamia Industry Strategic Plan Workshop

A Macadamia Industry Strategic Plan Workshop will be held at Thyolo Sports Club on the 10th November 2011.

Over 40 stakeholders have been invited from the estate, processors, smallholder and donors. It is the first official industry wide meeting for over 10 years and we all hope that it will be starting point of greater industry collaboration. A number of presentations will be made on important aspects of the industry and a draft strategic plan will be discussed.

Irish Aid Projects

Irish Aid have generously supported 2 projects totaling 60,000 euros to develop a Strategic Plan for the Malawian Macadamia Industry, creating a climate baseline and renewing suitability maps for the crop and setting up varietal research nursery. The varietal project has been completed and has achieved a number of world firsts. The genome of macadamia has been mapped and 20 markers developed. This will allow us to speed up selection of new hybrids and start to look at traits such as heat resistance and dwarfing.