Agriculture is the mainstay of the economy in Malawi, but the Malawian smallholder’s livelihood is threatened by challenges that have been familiar to farmers around the world over the centuries. Smallholder farmers in Malawi face obstacles on both the production and the market side of their businesses. Yields are often depressed by a combination of depleted soils, inferior seed, lack of effective chemical and organic fertilizer and vulnerability to drought, plant diseases and pests. After harvest, farmers often have very little knowledge of available markets and prices. Additionally, farmers have limited means of transporting crops to market and often have little choice but to sell to traders at prices well below what legitimate commercial buyers are paying.
In order to help smallholder farmers achieve greater income through greatly improved yields and access to formal markets for better prices, the Clinton Development Initiative (CDI) created the Anchor Farm Project in 2008. The Anchor Farm Project is a CDI-operated commercial farm that partners with thousands of neighboring smallholder farmers, providing them with access to quality inputs for maize and soy production as well as training and market access. Farmers in the project have access to improved soy seed, training in advanced agronomic techniques and Climate Smart Agriculture (CSA) training, and they have direct access to a domestic bulk buyer of their soy. In 2012, CDI scaled up the project to five farms, providing resources to more than 21,000 smallholder farmers and is working to scale up the Anchor Farm Project to 100,000 smallholder farmers by the 2015-2016 growing season in Malawi. With support from the Dutch government, CDI is also scaling up CSA training across all Anchor Farms, which focuses on improving farmers' food security with techniques that are more resilient to climate change and contribute to climate change mitigation.
CDI is also working with banks in Malawi to provide smallholder farmers with loans to finance their input purchases and banking accounts to help them save money after the sale of their crops.
Smallholder farmers in the Anchor Farm Project have experienced an average of 150 percent increase in yields. Because their crops are included in sales contracts negotiated by CDI with large commercial buyers, smallholder farmers’ sales prices for soy have increased by 167 percent. As a result of both productivity and market access improvements, smallholder profitability was 567 percent higher in 2011 than in the year before the project began. Due to the Anchor Farm Project's success, CDI is working at the invitation of the government of Tanzania to replicate the Anchor Farm Project in Tanzania. With support from the Dutch government, CDI plans to begin operations in 2013-2014 with one commercial farm and 20,000 smallholders.