Cultivating smallholder inclusion in Southern Africa’s macadamia nut value chains

Synopsis:

The paper looks at the potential for developing a macadamia nut value chain within the Southern African region, and the potential for incorporating smallholder producers into the macadamias nut industry. South Africa, Mozambique and Malawi are used as case studies.

The paper first examines the development of the macadamia nut sector in each country. Secondly, the paper highlights the challenges faced and positive developments made in incorporating smallholders in the macadamia sector. Thirdly, the paper examines the role of African markets and producers in the international trade in macadamia nuts. Lastly, the paper concludes with specific policy recommendations on developing a regional value chain in the macadamia nut industry.

Key findings:

• Macadamia nut production has experienced rapid growth South Africa and also growing interest in Malawi and Mozambique. The sector accounts for 1% of global tree production.
• In Malawi, the Macadamia nut sector is still a niche market that is dominated by a select number of larger players and commercial enterprises, even though there is an interest in its cultivation.
• Irrigation and access to new technology and systems has been a challenge for the Malawian nut sector.
• For the Macadamia nut to remain viable in Malawi, extension to services and technical support are essential. This includes small holder farmers scaling up into commercial production, engaging in cooperative farming and also by reducing dependency on donor-driven projects.
• South Africa has surpassed the Australian macadamia nut production (where Macadamia nuts originate) and became the top global macadamia nut producer for 2011, 2013 and 2015.
• The Southern African Macadamia Growers’ Association (SAMAC) represents South African, Mozambican and southern Malawian macadamia nut producers. They provide members with production and pest-related research and funding projects that tackle the challenges facing macadamia nut growers
• Mozambique has four times more available arable land than South Africa, but only 10% of its arable land is currently under production.
• There is little knowledge dissemination on macadamia nut cultivation in Mozambique; this means that many smallholder farmers are unaware of its high export value which makes the Mozambican macadamia nut sector an underdeveloped industry.
• South Africa is the best-placed country to be a value-adding partner in the creation of a regional VC due to the level of industrialization, it technical skills, established companies, access to R&D, well developed local supply industries and services and geographical clustering.
• Mozambique’s port infrastructure can play an important contributory role in creating a regional VC with Malawi.

Recommendations:

• Malawi needs to improve its agricultural sector and further VC development. Private sector investors and donors should continue to focus on improving yield, quality and productivity.
• African producers need to establish themselves as global leaders in production through collaboration, research-sharing and regular engagement. This can be done through information sharing platforms and study groups.
• Industry representatives need to find coherent regional approaches to regional VC development and engagement. For example a regional industry body to shape a common agenda among SADC macadamia nut producers.
• African producers need to find innovative ways to improve their economies of scale and upscale in VCs. They can investigate the viability of creating local markets for industrialised products incorporating macadamia nuts.