The turnaround of Kasinthula: lessons from Malawi’s Shire Valley

Drive around Kasinthula today and it’s hard to imagine that three years ago it was on the brink of ruin. On one side of the road, vivid green cane, four metres high, sways in the wind as far as the eye can see. On the other side, a tractor prepares a field for replanting. In the distance, farm workers stack long brown cane into neat piles. Huge trucks will arrive later to collect it, trundling down the road to the country’s biggest sugar mill. The 1,429 hectare sugarcane scheme is thriving in the heat of the Chikwawa valley, Southern Malawi. The Shire River, glistening on the horizon, provides ample water for round-the-clock irrigation. Neat canals provide water to some fields, others are sprayed by pivot irrigators, in between which local farmers have planted maize and beans for their families.


Photo: AgDevCo

Kasinthula is owned by 762 smallholder farmers. In 1997 they pooled their land to create the Kasinthula Cane Growers Association (KCGA) and turned their largely unproductive fields into a commercial sugarcane scheme. Initially the scheme thrived. It was the first Fairtrade accredited plantation in Malawi, giving farmers access to Fairtrade premiums, in addition to dividend payments from Kasinthula’s profit.


Fast-forward two decades and Kasinthula was in nearly US$ 1 million of debt. The initial loan with which Kasinthula was established was never cleared. The electricity was cut off, water pumps sat redundant, the sugar cane wilted. By 2019 yield had fallen to 49, 000 tonnes, from a peak of 135,000 tonnes.



The farmers were desperate’ says Aubrey Chilenje, an original farmer member and now KCGA Chairman.

‘Kasinthula was our only income and the dividends stopped because the debt was unsustainable. Farmers who were employed in the fields went to work for eight months with no pay. That’s how badly they wanted those jobs.’

Photo: AgDevCo

A few kilometres down the road, the fortunes of another smallholder-owned sugarcane scheme were looking very different. The Phata Sugarcane Cooperative was established in 2013 by professional farm management company Agricane, with a grant from the European Union, and investment from AgDevCo. In 2016 Phata expanded, taking membership to more than 1000 farmers. It was consistently profitable and by 2019 Phata had paid US$ 6.5 million in dividends to its members. Little wonder their neighbours at Kasinthula, on the brink of bankruptcy, asked Agricane to partner with them. Agricane agreed, turning to AgDevCo to see if finance could be raised.


‘I clearly remember driving around Kasinthula, thinking this is almost beyond repair,’ says Jim Henderson, AgDevCo’s Southern Region Director. ‘The irrigation canals were cracking, the centre pivots had been vandalised. The majority of cane had died and where there was some left, the fields were so overgrown you could barely see it. But we knew it had potential. Kasinthula community wsa so committed and Phata was a vision of what it could look like. That gave me confidence we could turn the scheme around.’


Weeks of negotiation with creditors ensued. ‘We had to verbally convince them there was potential for a thriving business,’ says Henderson. ‘We had to get everyone on board - from the Malawi Revenue Authority, to ESCOM, to the bank - because only then would we get the right finance for a recovery plan. The UK Government gave us a US$ 1 million grant which was critical for de-risking those early stages and kick-starting the rehabilitation work. AgDevCo put in the remaining US$ 4 million, and Agricane came on board as the professional management company. This allowed the farmers to get back to work and realise their potential of their scheme.’


‘There was relief all over,’ remembers Charles Chavi, Trust Administrator. ‘Without the new investment we would have closed for sure. As much as Agricane and AgDevCo are new management, we also saw them as change agents. Our organisation needed that kind of independence and experience managing commercial scale farms.’


An ambitious rebuilding programme began, starting with the pump house at the Shire river. Canals were repaired, dams were drained and cleared of silt, roads were re-graded.