For Sub-Saharan African smallholder farmers, poor harvests can frequently be attributed largely to poor quality seed. But providing varied, high-quality seed is one of the most efficient and cost-effective strategies for boosting green sustainable growth. In Malawi, over the past 15 years, an innovative seed revolving fund has gradually given rise to a local, privately-owned seed industry that has provided a platform for relaunching the country’s groundnut production.

Options are often limited for Malawians in their young, landlocked country, classified among the world’s poorest where two out of every three people are under 25 years old. The bulk of the population is still dependant on subsistence, rain-fed farming that is highly vulnerable to the erratic climate in this semi-arid region where two consecutive years of drought have exacerbated food insecurity. Output of the staple food maize plunged by one-third in 2016. Boosting productivity on small subsistence family-owned farms is essential for alleviating poverty in this country. Promoting more variety on farms and in people’s diets by encouraging smallholders to grow more leguminous plants like groundnuts or pigeon peas would greatly improve family nutrition and enhance soil fertility. However, actually obtaining quality legume seeds is still very difficult and the private seed production sector has not invested any resources in resolving the problem. A number of studies have shown that many local farmers either use their own seeds or buy in some more to replenish stocks via informal channels or local markets where grain is converted into poor-quality seed.

For example, Malawi used to export groundnuts before production collapsed in the 1980s. While more than 90% of groundnuts are grown by smallholders, average yields in the early 2000s were very low at around 860 kg per hectare. Farmers have to contend with a number of issues: poor soil quality, diseases, insects, drought and low yields from local seed varieties.

Creating local seed ventures

Over the years, the International Crops Research Institute for the Semi-Arid Tropics (ICRISAT) together with national research and development institutes have developed improved seed varieties such as nsinjiro, a high-yield groundnut used in confectionery that is resistant to groundnut rosette disease (GRD – a virus transmitted by insects that stymies the plant’s growth and makes its leaves turn yellow). Locally-based seed systems (e.g., seed producers’ clubs set up by NGOs) have been used to disseminate these improved seed varieties to nearly 50,000 smallholders over a ten-year period, however a sustainable financial model underpinned by private sector participation is needed to attain a national scale.

In 1999, ICRISAT set up a groundnut seed revolving fund (SRF) aimed at creating a viable business model that would be capable of distributing improved seed varieties over the long-term (i.e., high-yield, high-quality, affordable seeds that are both drought- and disease-resistant). The SRF – initially supported by USAID and currently by Ireland – encouraged local seed ventures and upscaling of the distribution of improved varieties.

It has had a significant impact on both the output and the income of many smallholders such as Mary Kumwenda. Mary is a farm labourer and mother of three and she joined the Madede seed-growers club in the district of Mzimba in 2012. She received groundnut seed management training together with 20 kg of foundation seeds for multiplication. Mary harvested 11 times as much basic seed (222 kg) and earned a nice return of 78,000 kwacha (around US$ 107) in her first year. The following year, thanks to good rains, she doubled the area sown and trebled her output and earned 321,000 kwacha – 1.5 times the average national income.

How do seed revolving funds (SRFs) actually work?

Central to the SRF are the seed producers’ clubs of 10-15 smallholder farmers trained in seed production, management and group dynamics. These clubs are contracted by the SRF to produce foundation seeds which are bought back at agreed prices. Smallholders get their pre-basic seed on credit (i.e., first-generation seed produced in research field stations) while individual larger farmers can also become seed suppliers of SRFs while paying up front for their pre-basic seed. Foundation seeds (used to produce commercially certified seeds) are then sold to local seed ventures for multiplication and then sold back to smallholders through their network of private farm supply shops. Sales revenue is used by the SRF to cover storage, packaging and transport costs and the model is capable of taking on more smallholders every year.

The SRF is gradually diversifying and its seed portfolio now includes cowpea, pigeon pea and rice. As they realise the attractive yields that are possible from producing quality seed, local seed businesses are becoming increasingly involved in producing and marketing certified seeds. These companies are members of the Malawi Seed Alliance (MASA), an association created by ICRISAT to manage the SRF and help market certified seeds under the MASA brand.

Malawian products have now found their way back onto international markets and the country is once again exporting groundnuts to Europe under the Liberation Foods fair trade brand belonging to the NASFAM smallholder cooperative. Yields have almost doubled to around 1,500 kg/ha. ICRISAT’s seed revolving funds have undoubtedly played a key role in the rebirth of the Malawian groundnut industry and certain neighbouring countries such as Zimbabwe are very interested in replicating this model.

1 This Malawian seed revolving fund is one of the case studies presented in ICRISAT’s overview of seed systems models for smallholder farming published in late 2017: