Agricultural Transformation Initiative | Foundation for a Smoke-Free World

Agricultural Transformation Initiative

Growing tobacco has never lifted smallholder farmers out of poverty.

High-quality data and rigorous analysis can shape and inform effective, evidence-based policy creation and resource deployment to diversify economies and lessen country dependence on tobacco—better preparing farmers for the future while strengthening their countries’ economies.

The mission of the Foundation for a Smoke-Free World’s (FSFW) affiliate, the Agricultural Transformation Initiative (ATI), is to prepare smallholder tobacco farmers for an era of significantly reduced demand for tobacco, focusing first on populations with the greatest need. The ATI is using this opportunity to facilitate the establishment of more secure, competitive and sustainable income strategies for smallholder farmers and is partnering with a diverse set of stakeholders to ensure the success and sustainability of our strategy. The ATI’s activities target the following outcomes:

  1. Higher, more secure and diversified income streams and better overall health for smallholder farmers, their families, and their communities more broadly.
  2. Increased knowledge and adoption of cutting edge agricultural science and technology.
  3. Reduced economic dependence on tobacco and increased resilience for tobacco-growing nations.
  4. Reduced environmental degradation due to tobacco cultivation and investing into climate-smart agricultural alternatives and practices.

To achieve this, the ATI employs a systems approach to understanding local contexts and potential points of intervention, coupled with an investment-oriented model of action. A systems-thinking approach is well suited for tackling complex development problems because it incorporates multifactor analysis and feedback loops to foster better decision-making. Focusing on investment, meanwhile, will ensure that each dollar spent is contributing to building capacity and strengthening local and national economies in a sustainable way—contributing, that is, to a better future for smallholder farmers, their families, and their communities.

Strategic approach to economic diversification

Figure 1: A virtuous cycle of market-driven investment, science- and technology-driven innovation, and targeted policy reforms.

  1. Identify alternatives. Identify innovative and profitable alternative agricultural (including crop, livestock and aquaculture) and livelihood options for farmers. This is being accomplished through evidenced-based research and analysis undertaken by the Foundation’s partners as well as the Centre for Agricultural Transformation (CAT) and its academic, private sector and research partners which aim to help farmers diversify their incomes to build resilience and ease the heavy reliance on the declining tobacco sector. 

  2. Enhance productivity. Develop and apply new technologies and innovation to enhance agricultural productivity, build resilience, and increase alternative income opportunities for smallholder tobacco farmers, primarily driven through Centre for Agriculture Transformation’s work. This center is a flagship program for ATI and will be critical in assessing and verifying new technologies that can come into Malawi’s agriculture sector. Early areas of need identified are seed testing, plant nutrition, plant protection, tissue cultures, soil testing, and land allocation/mapping.

  3. Facilitate commercialization. Facilitate the creation and application of new markets and sustainable business models to improve economic opportunity and generate income for rural communities, as well as to strengthen the economy more broadly. A core pillar of the FSFW / ATI strategy is to strengthen and support alternate agricultural value chains. This activity takes place through multiple methods, including deep collaboration and local policy analysis with identified partners such as the CAT and MwAPATA; conferences, seminars, and capacity-building sessions on a range of issues, which include but are not limited to economic diversification strategies across sectors for tobacco; platform for testing new technologies; facilitation of off-take agreements; and creation of an inclusive supply chain based on an integrated smallholder / commercial model.

  4. Unlocking constraints to growth. Create an enabling environment for these new livelihood and business strategies through policy and resilience-building action at all levels of scale. Underlying most of the priority areas of investment is an element of policy research to unlock constraints in understanding and promoting competitive and sustainable alternatives. This is particularly true relating to market and value-chain development, education, and technology innovation. The ATI also invests in human and institutional capacity development to accelerate diversification.

malawi: a unique context

The ATI recognizes that Malawi is a country with uniquely great need. The economy is highly dependent on tobacco, and the Malawian people suffer from a disproportionate burden of poverty and food insecurity. Furthermore, current government, nonprofit, and private sector interests in the context render it a country with promising circumstances for change. As such, the initial programmatic focus of the ATI is on Malawi.

In 2019, tobacco exports accounted for 55.6% of total merchandise exports in Malawi ($584 million USD), rendering Malawi one of the most – if not the most – economically tobacco-dependent countries in the world. The current global trends in tobacco markets, health issues, and environmental concerns have exerted significant pressure on the domestic industry, prompting the government to diversify the economy and reduce overreliance on tobacco as the largest foreign exchange earner.

According to a 2020 study, the share of the export price received by farmers has declined over time, with the median farm gate price dropping from 32% of the export price in 2004 to 18% in 2019.

In addition to this, Malawi suffers from a disproportionate burden of poverty and malnutrition. The overall poverty rate is 50.7% (2019/2020) and the poverty rate in rural areas, where most Malawians reside, is even higher at 57%. Levels of undernutrition and malnutrition are high and life expectancy stands at a modest 64.3.

As such, Malawi is a country that will be particularly vulnerable to future declines in global tobacco demand.

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