Social Issue

Malawi is one of the poorer countries in the world with about 70% of the population living below the $2.15 international poverty line (UNCTAD, 2023). The majority of the population depends on subsistence farming. Not only does this mean the country’s food security hinges on how well the agricultural sector performs, but it also means that a lot of families rely on agriculture as their main source of income. Over 5 million people in Malawi are currently facing moderate to severe food insecurity and these statistics are bound to get worse if no strategic and sustainable solutions are implemented. It is estimated that most smallholder farmers produce only 30% of their potential output due to a myriad of obstacles from the field right up to the market. These obstacles include the high cost of agricultural inputs which results in a lot of farmers having to settle for cheaper and low quality alternatives, climate change, and lack of adaptation strategies. In 2019, Malawi was ranked fifth in the top ten countries affected by climate change in Africa. Inefficiencies in the logistics value chain have also been a huge impediment for smallholder farmers with up to 40% post-harvest food loss being experienced each season. Due to limited or lack of marketing infrastructure and information in the rural areas, a lot of middlemen/ intermediary traders take advantage of the farmers often buying the farmers’ produce at very low prices. The sum effect of all of these challenges is the reason why the average farmer in Malawi cannot break out of a cycle of poverty and food insecurity.

Our Response

Netri is providing a loan to GGEM Farming, a Malawian social enterprise that helps local farmers improve their yields and gives them access to an ethical marketplace that puts more money back into their pockets. 

They do this by providing their farmers access to quality agricultural inputs at zero interest rates. Through their dedicated team, they also offer farmers in field commercial agri-training and support throughout the crop production cycle to ensure maximum productivity. The crops they promote are rice (a staple with better returns than maize) and legumes, the primary protein source for low-income families. Farmers sign a contract with GGEM outlining prices, quantities, and key dates when they are expected to sell their produce. GGEM then processes and commercializes the produce, where their marketplace practices guarantee the availability of fairly priced food, especially during the lean months of each year when profiteering can see the cost of staple foods such as grains rise by as much as 400%.

Netri’s loan is part of a working capital facility funded by other foundations that GGEM Farming uses to procure crops from farmers during the harvest period.

Expected Social Impact

GGEM has demonstrated that its model of direct support to farmers enables them to significantly increase their incomes (an average of 600% in one season with GGEM). In 2023, they worked with 3,527 farmers and plan to reach 4,500 in 2024. By focusing on enhancing farmers and production capacity, GGEM stimulates rural economies from the ground up. GGEM farmers employ more local people as they cultivate more land, which leads to greater self-investment in all areas, from access to healthcare, education, and
housing, to household food security and income diversification. The increased food production by GGEM farmers, combined with GGEM’s efforts to provide open market access to all Malawian farmers, ensures that more affordable food reaches communities most impacted by food shortages. In 2023 alone, GGEM successfully sold over 1,500 tons of affordable food to more than 50,000 low-income households across Malawi.