Eased transportation increases cooperative revenue

Eased transportation increases cooperative revenue

Just twelve months ago, a challenge for Gwiritse cooperative was finding affordable and sustainable means of transporting their produce from the farm to the group’s warehouse and further to off-takers. 

It is only fifty kilometers between Nsaru Trading Centre where the cooperative is located and Kanengo industrial area where the cooperative delivers its produce to the off-takers. 

Each time they hired a five-ton truck to transport produce from farmers’ houses to the cooperative’s warehouse and from the warehouse to their off-takers, a 50kg bag would cost around MK3,000. This is one of the costs that most farmer groups in the country are suffering due to lack of fixed assets such as vehicles, processing machines, tractors and many more. 

Nevertheless, the struggle to find a vehicle which would ease transportation hurdles among the farmers, seemed endless as it was almost impossible for the farmers to raise and part ways with K15 million for a truck. 

“It was not easy to find a truck to collect produce from farmers’ storehouses and bring it to the warehouse at a cost affordable to the farmers. When we went around looking for quotations, we discovered that a truck suitable for this purpose was selling at not less than K12million Kwacha,” says Baiton Ngwira, Gwiritse Cooperative Manager. 

AGCOM has boosted our cooperative business - Ngwira

He also said that some transporters were refusing to be shunting farmers’ produce from their homes to the cooperative’s warehouse and farmers had to find other means of transport which were also expensive. That made the process of delivering produce to their off-takers tedious and costly.  

Operating as a cooperative, the farmers were exposed to easy access of agriculture extension and other farmer-related services. In 2020, they heard of support for capital assets acquisition in a matching grant by the Agricultural Commercialization (AGCOM) Project from their government extension workers.  The farmers were guided accordingly to apply for the grant which they believed would be a direct answer to their transport challenge and other needs.  

In 2021, the cooperative received a matching grant of MK60,648,000 from AGCOM project. In the first tranche of the support, the cooperative received MK15 million with which they bought a 5-ton truck to ease the transportation hurdles. The coming of the truck has greatly changed the cooperative’s business as farmers have realized more profits from their produce in the previous season. 

“We decided to include a truck in our proposal for support from AGCOM project in order to address the transportation challenges we were facing. The coming of the truck has made life easy for our farmers as they are now conveniently transporting their produce at a very low cost, a development which has increased their profit,” said Ngwira.

In the past, the cooperative used to pay MK200,000 as transport cost for 100 bags of soybean from Nsaru to Kanengo. The amount however increased when they included transport of the produce from farmers’ homes to the main warehouse. Today the same consignment is being transported at less than MK100,000 enabling farmers to make a saving of over MK2000 per bag. This means that the money being saved is now part of the profit which farmers are making as a result of the support they have received from AGCOM project. A trip which cost the cooperative MK150,000 is now costing less MK60,000. 

“The K2000 saving we are making per bag is creating an increase in our profits as farmers. The coming of the truck with support from AGCOM is a big win for us,” says Ngwira. 

The truck is, however, not only serving the farmers on transportation of produce from the warehouse to the off-takers, but it is also serving the members during other occasions such as funerals, weddings and other social gatherings at an affordable fee. The paid amount is therefore increasing the bank account balances of the cooperative. 

Gwiritse cooperative started in 2012 as an association with 75 women and 25 men and was registered as a cooperative in September 2013. Membership of the cooperative has increased to 366 as of today with 263 women and 81 young people.