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World Bank to Fund Diversification in Malawi Ag Sector

Date Posted: March 23, 2012

Washington—The World Bank is expanding its support to Malawi’s agriculture sector with an additional US$30million credit to shore up diversification from the maize and tobacco-based production systems, and engagement in more market oriented agriculture.

This is expected to enable 200,000 smallholder farmers improve their incomes and become more food secure.

Agricultural diversification will also help Malawi improve its export base which is currently mainly based on tobacco.

The US$30million credit was approved by the World Bank Board today as Additional Financing (AF) to the Agriculture Sector Wide Approach Support Program (ASWAp-SP).

These funds are additional to an initial US$32 million credit provided in 2008 to what was then the Agriculture Development Program – Support Project (ADP-SP) and is now called ASWAp-SP.

“Malawi’s agriculture sector is dominated by smallholder farmers.

"The World Bank therefore found it appropriate to respond to a government request for more funds to extend to these farmers interventions in support to agricultural diversification and productivity increase, as well as access to markets,” said Sandra Bloemenkamp, the Bank’s Country Manager for Malawi.

The AF will expand the number of farmers receiving technical advice from extension services to help them adopt innovative technologies and cropping practices to improve the productivity and resilience of the maize-based farming system.

These extension activities are also intended to enhance the results of the government financed subsidy programs through improved utilization of the inputs.

The AF will increase the number of smallholder farmer households benefitting from project interventions from 300,000 to 500,000 (two and a half million people).

Apart from extension services, the AF will also finance a new rural roads component that will improve and maintain unpaved roads to facilitate market access.

To promote agricultural diversification, the AF will support public-private agribusiness partnerships and a program of activities designed to improve legume crop production, processing and marketing.

The AF will also support on-going government efforts to implement agricultural risk management.

Some other donors, such as the European Union and the Flanders International Cooperation Agency (FICA), Department for International Development (DfID), Irish Aid and USAID, will also provide additional support to the ASWAp-SP through a Multi-Donor Trust Fund to be established by the World Bank.

With this AF, the closing of the ASWAp-SP financing by the World Bank will be extended from September 15, 2013 to June 30, 2015.

ASWAp-SP is implemented through the Ministry of Agriculture, Irrigation and Water Development.

The Bank’s manager for the project is Olivier Durand.

For more information, call 202-473-8302.

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