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Agricane Newsletter- April 2021

Updated: May 11, 2021

The Agricane group have been operating as service providers to Commercial and Small grower farming for 25 years and have worked in 24 countries across the continent. Their vision for food stability in this burgeoning population is created through the myriad of experiences of success and as importantly failure of African Agriculture that they have witnessed over the years.

Kaombe/Sande Farms and Ouro Verde Farm owned and operated by Agricane are leading examples which encapsulate the successful fulfilment of their vision - “Sustainable Commercial Agriculture linked to Community involvement while respecting and promoting environmental balance.”

Agricane have been dedicated to Malawi development for over 30 years and, in the Lower Shire area in particular have been responsible for the following projects:-

- Establishment of Kaombe and Sande Ranch (1,250ha)

- Phata Smallholder Scheme (600ha)

- Kasinthula Smallholder Scheme (1500ha)

This constitutes more than 3,300ha of irrigated sugarcane under Agricane’s

Community and Social Impact

A wide range of projects implemented represent a very strong community impact, commensurate with Agricane’s vision, which employ a total of over 1,500 people at maximum periods and beneficiate over 10,000 people. Overall they sustainably beneficiate the following groups –

- Over $2.2 million paid annually in salaries and wages

- Over $1,3 million in dividends to small-growers (after debts are paid up)

- Over $250,000 per annum towards community projects such as schools, boreholes, clinics, power supplies, road access, woman’s development programs and etc. (after debts are settled)

Environmental Impact

All these developments are fully compliant with the national ESIA legislatory requirements and have fully operational Environmental, Health and Safety systems in place. As part of its development philosophy, Agricane will continue to incorporate environmental mitigations that will be synergistic towards the sustainability of the agricultural production with the following initiatives in place or about to be put in place –

  • 700ha wild life Park at Kaombe to be expanded to 1 100ha in next few years

  • Over 200ha of reserve areas between pivots in each of Sande and Kaombe Farms

  • A planned Community fish farming scheme on Elephant Marsh adjacent to Kaombe to replace excessive fishing off the marsh.

  • A planned shift towards Integrated Pest Management systems.

Agricane has the following fully established assets –

· 3,314 ha of prime farmland in Shire Valley, Malawi

· Split into 3 farms – 2 of which are next to the Shire River

· 120km South of Blantyre – top 10% cane production zone

· 1,285 ha of irrigated cane land on these farms, of which 335ha is a Community Trust project

· 700 ha of virgin bush with 12 species of wild game totalling over 600 head

· All state the art Centre Pivot irrigation.

· All the necessary tractors, vehicles and implements

· Grid power supplies and full generator backup

· Housing, offices, workshops for a full operations

1. Current status of each farm

i) Brief Description

a) Kaombe Ranch

The ranch in the southern extent of the Shire Valley adjacent to the elephant marsh close to the small town of Bangula. It has a total area of 2,300ha of which 820ha are under irrigated sugarcane, 700 ha make up a nature sanctuary area and the remaining area is used for cattle grazing. The irrigation system is made up of a main pump station with electrically driven pumps drawing water from an inlet channel and delivering water through a number of underground pipes to 12 different centre pivots making up a total of 820ha.

b) Sande Ranch

Sande is located in Chikwawa District 18 km to the north of Nchalo Sugar Factory to the west of the Shire River. It has a total gross area of 700ha of which 450ha are under irrigated sugarcane and the balance is used for cattle grazing and/or protected forests. The irrigation system is made up of two pump stations (a lift pump on the Shire River intake and a booster pump in the middle of the ranch) to deliver water through underground pipelines to 9 different centre pivots.

Agricane will take over the management during 2021 to ensure that the yields are at optimum by the time of the takeover.

(ii) Performance of Current Assets

a) Kaombe Ranch

Sugarcane was first planted in 2009 and had its first harvest in 2010. The yield and other production statistics are summarized in Table 2.1 below. There has been a steady yield decline due to the fact that there has been a build-up of salinity in the irrigation water that was being pumped out of intake channel and as a result reduced the yield potential. This trend is now reversed with the new fresh water installation and is abundantly clear to see in the subsequent crops, which now give 65% more cane than in 2018.

b) Sande Ranch

Cane was planted at Sande in 2008 and the first year of harvest saw impressive yields. These have declined somewhat over the years which is a natural process (known as ratoon decline) and is due to commence its replanting cycle with 15-20% of the total replanted annually to rejuvenate the root stock and maximise yield potential. There are no major issues with the irrigation water quality at Sande.

1. Community Development Initiatives

Over the last 10 years Agricane have developed substantial community-based initiatives in the Shire Valley collectively reaching over 5,000 households with sustainable positive impact. Some of these are listed below.

(i) Kaombe Trust

Kaombe Community Development Trust is a 335ha cane under pivot irrigation scheme leased off land owned by CFC. The scheme is integrated into Kaombe farming operations and is fully run by Agricane along with CFC operations. It is responsible for its share ($1,3 million) of the new Bulk Water system developed in 2017.

At present it provides infrastructural development into the surrounding communities to the tune of around $70,000 per annum. Once the loan is repaid this will inject around $250,000 per annum to community developments.

To date the Trust has developed School Classrooms, Teacher’s housing, Community Centres, 26 new Boreholes for water supplies amounting to around $250,000.

(ii) Phata Outgrower Cooperative

Phata is a flagship for Cooperative sugar development where the community offered 600ha of their land to be made into a sugar scheme. Agricane sourced the finances and assisted in the implementation of this which has now been running successfully for 8 years. The Phase 1 scheme paid their debts back within four years and Phase 2 are well on track to service their remaining debt. Once this is complete the scheme makes a profit of around $700,000 per annum of which 50% is generally paid out in dividends each year to the beneficiaries.

(iii) Chimvuli & Kalima Irrigation Schemes

These 2 community irrigation schemes add up to around 70ha have been implemented during 2020 as part of a wider initiative by Feed the Future USAID project. They leverage the infrastructure around commercial projects such as existing Bulk Water Systems and their management and maintenance capabilities to create a sustainable production solution for communities. The mother farms also provide technical and marketing support.

(iv) Other community initiatives include –

a. Village Saving and loan scheme – a USAID initiative has implemented a loan scheme for village associations which are integrated around the periphery of Agricane’s managed operations.

b. Bamboo distribution – over 15,000 Bamboo seedlings have been distributed to households and community centres as part of an effort to provide sustainable fuel for cooking and the potential for an alternative structural timber source.

c. Revolving Bicycle Scheme – as part of an initiative to improve the mobility of farmers and employees of these schemes, a revolving fund for higher quality bicycles has been implemented which allows people to buy at subsidised rates over a 2 year period.

The map show below depicts the existing and potential developments of the Shire Valley Transformational Program (SVTP), which sets out to expand the production potential of the valley through complimenting the existing infrastructure and providing an expansion base for a further 25,000ha of irrigated land.

The crop focus is envisaged to be the following (based on current local/export market potential) –

- Dried Fruit and Puree – Mango, Pineapple, Tomato are all good options for a well-structured processing plant. The key is good management of high yielding crops and all maximum utilisation of the processing plant. Agricane plans to purchase an existing 200ha commercial farm adjacent to Sande Farm to begin developing this concept. Once we have secured the technology, knowledge of local conditions and markets we will then be in a position to expand this into the wider area.

- Sugarcane Expansion – There is limited potential for this immediately but as the local demand increases over the 10 year period we envisage expansion of around 2,000ha of cane for sugar. A further opportunity is presented with Presscane who have been investigating expanding their feedstock which requires around 3,000ha of sugarcane expansion potential.

Sesame, Pulses and Neem – these are other crops suited to this environment with good economic potential for further investigation.

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