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Nkhotakota District October 2005 This publication was produced for review by the United States Agency for International Development. It was prepared by Community Partnerships for Sustainable Resource Management (COMPASS II) staff. ENHANCING ECONOMIC OPPORTUNITIES PROMOTING BUSINESS LINKAGES, PARTNERSHIPS, AND MULTIPLIER EFFECTS FOR COMMUNITIES IN THE HONEY, MUSHROOM & AQUACULTURE SECTORS IN MALAWI OCCASIONAL PAPER NO. 16 COMMUNITY PARTNERSHIPS FOR SUSTAINABLE RESOURCE MANAGEMENT (COMPASS II) May 2006 This publication was produced for review by the United States Agency for International Development. It was prepared by Bagie Sherchand, Development Alternatives, Inc. AUTHORITY Prepared for the Government of Malawi and for USAID/Malawi under Contract Number 690-C-00-04- 00090-00 awarded 30 April 2004, entitled Community Partnerships for Sustainable Resource Management in Malawi (COMPASS II). The views expressed and opinions contained in this report are those of the author and are not intended as statements of policy of the Government of Malawi, USAID or the contractor companies. PREPARED BY: COMMUNITY PARTNERSHIPS FOR SUSTAINABLE RESOURCE MANAGEMENT IN MALAŴI (COMPASS II) AUTHOR: BAGIE SHERCHAND CREDITS: Cover photos: Bagie Sherchand, John Dickinson and Levy Manda. Text editing and report layout & design by John Dickinson and Todd Johnson COMPASS II IMPLEMENTING PARTNERS: Development Alternatives, Inc Private Bag 20, 1st floor Able House 7600 Wisconsin Ave., Suite 200 #8 Hannover Ave at Chilembwe Road Bethesda, MD 20814 Blantyre USA Malawi Tel: +1-301-771-7600 Telephone: +265 (0)1-822-800 Fax: +1-301-718-7968 Fax: +265 (0)1 822 852 email: [email protected] email: [email protected] With: Wildlife & Environmental Society of Malawi (WESM) +265-1-643-502 Private Bag 578, Limbe, Malawi Spectrum Media +1-617-491-4300 271 Willow Ave., Somerville MA 02144 USA ENHANCING ECONOMIC OPPORTUNITIES MALAWI COMPASS II III IV MALAWI COMPASS II ENHANCING ECONOMIC OPPORTUNITIES ENHANCING ECONOMIC OPPORTUNITIES PROMOTING BUSINESS LINKAGES, PARTNERSHIPS, AND MULTIPLIER EFFECTS FOR COMMUNITIES IN THE HONEY, MUSHROOM & AQUACULTURE SECTORS OF MALAWI DISCLAIMER The views expressed in this publication do not necessarily reflect the views of the Government of Malawi, the United States Agency for International Development or the United States Government. ENHANCING ECONOMIC OPPORTUNITIES MALAWI COMPASS II V CONTENTS CONTENTS ..............................................................................................................VII TABLES: ....................................................................................................................IX FIGURES: ..................................................................................................................IX ACRONYMS ...............................................................................................................X PREFACE ..................................................................................................................XI EXECUTIVE SUMMARY .........................................................................................XIII 1. INTRODUCTION.................................................................................................. 1 1.1. OBJECTIVES.................................................................................................... 2 1.2. METHODOLOGY:.............................................................................................. 3 1.3. ORGANIZATION OF REPORT:............................................................................. 3 2. SUBSECTOR SELECTION RATIONALE ........................................................... 5 3. THE HONEY SUBSECTOR................................................................................. 7 3.1. HONEY SUBSECTOR CONSTRAINTS AND CHALLENGES........................................ 8 3.2. AREAS FOR STRATEGIC IMPROVEMENT IN THE HONEY SUBSECTOR ................... 10 3.3. COMMERCIALLY VIABLE OPTIONS AND BUSINESS OPPORTUNITIES..................... 12 Commercially Viable Options and Opportunities................................................ 13 3.4. INNOVATIVE PARTNERSHIP MODELS................................................................ 15 Smallholder Commercialization Framework....................................................... 15 Smallholder Honey Improvement Program ........................................................ 17 Smallholder Beeswax Commercialization Program............................................ 17 4. THE WILD MUSHROOM SUBSECTOR............................................................ 19 4.1. MUSHROOM SUBSECTOR CONSTRAINTS AND CHALLENGES............................... 20 4.2. AREAS FOR STRATEGIC IMPROVEMENT IN THE MUSHROOM SUBSECTOR ............ 22 4.3. COMMERCIALLY VIABLE OPTIONS AND BUSINESS OPPORTUNITIES..................... 23 Commercially Viable Options and Opportunities................................................ 24 4.4. INNOVATIVE PARTNERSHIP MODELS................................................................ 25 PGE Mobilization for Linkage............................................................................. 26 Smallholder Mushroom Cultivation and Commercialization ............................... 26 5. THE AQUACULTURE SUBSECTOR................................................................ 27 5.1. AQUACULTURE SUBSECTOR CONSTRAINTS AND OPPORTUNITIES ...................... 29 5.2. AREAS FOR STRATEGIC IMPROVEMENT IN THE AQUACULTURE SUBSECTOR ........ 30 5.3. COMMERCIALLY VIABLE OPTIONS AND BUSINESS OPPORTUNITIES..................... 32 Cage Fishing...................................................................................................... 32 Fingerling Production ......................................................................................... 33 Floating Pellets (Fish-Feed) Production ............................................................. 34 Ice Making Plant Establishment ......................................................................... 34 5.4. INNOVATIVE PARTNERSHIP MODELS................................................................ 36 Smallholder – MALDECO Alliance..................................................................... 36 Smallholder - Shoprite Collaboration.................................................................. 38 ENHANCING ECONOMIC OPPORTUNITIES MALAWI COMPASS II VII 6. PILOT LOCATIONS .......................................................................................... 39 6.1. NYIKA, MZIMBA ............................................................................................. 39 6.2. NKHOTAKOTA................................................................................................ 39 6.3. CHINGALI, ZOMBA.......................................................................................... 40 6.4. MULTIPLIER EFFECTS .................................................................................... 40 7. INVESTOR INTEREST IN THE NATURAL RESOURCES-BASED ENTERPRISE SECTOR ........................................................................................... 41 ANNEXES................................................................................................................. 43 ANNEX 1: REFERENCES ............................................................................................ 45 ANNEX 2: PERSONS CONSULTED............................................................................... 47 VIII MALAWI COMPASS II ENHANCING ECONOMIC OPPORTUNITIES TABLES: Table 1: Constraints and challenges facing the honey value chain....................................... 9 Table 2: Strategies for improvement in the honey value chain........................................... 10 Table 3: Constraints and challenges confronting the wild mushroom value chain............. 21 Table 4: Strategies for improvement in the wild mushroom value chain ........................... 22 Table 5: Constraints and challenges facing the aquaculture value chain............................ 29 Table 6: Strategies for improvement in the aquaculture value chain.................................. 31 Table 7: Backward and forward linkages............................................................................ 40 FIGURES: Figure 1: Malawi Honey Subsector Map 7 Figure 2: Smallholder Commercialization Model 16 Figure 3: Malawi Wild Mushroom Subsector Map 19 Figure 4: Malawi Aquaculture Subsector Map 28 ENHANCING ECONOMIC OPPORTUNITIES MALAWI COMPASS II IX ACRONYMS BVC Beach Village Committee CBNRM Community Based Natural Resources Management CFR Cost and Freight CODEX Codex Alimentarius (Food Code) COMPASS Community Partnerships for Sustainable Resources Management in Malawi EPL Eco-Products Limited EU European Union FAO Food and Agriculture Organization of the United Nations g. gramme Kg Kilogramme ISO International Standards Organization IFFA Integrated Fish Farming Association m. metre ME Middle East MOU Memorandum of Understanding NGO Nongovernmental Organization PET Poly-Ethylene Terephthalate PGE Producer Group Enterprise PTC People’s Trading Company SCFT Smallholder Coffee Farmers Trust UNDP United Nations Development Program UNOPS United Nations Office of Project Services USAID United Stated Agency for International Development WHO World Health Organization X MALAWI COMPASS II ENHANCING ECONOMIC OPPORTUNITIES PREFACE Development Alternatives Inc. (DAI) was contracted by the United States Agency for International Development (USAID)/Malawi to implement the second phase of the
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