Land, sugar and corporate power
By Kelvin Chirwa
Malawi continues to face significant challenges related to land rights and corporate land grabbing. Despite initiatives like Kudzigulira Malo to improve land access for the poor, large investors hold the majority of fertile land rather than marginalised communities. This reflects a broader pattern of corporate land acquisitions across Southern Africa.
This article explores the influence of Illovo Sugar Malawi. It is based on numerous discussions I have had with affected community members and government officials as a human rights activist fighting for land and consumer rights.
Illovo Sugar Malawi Limited (Illovo), which is part of the Associated British Foods (ABF) group, has been a key player in Malawi's sugar industry since 1965. It is by far the largest sugar producer in the country. Despite its economic contributions to the country, Illovo has faced criticism in Malawi over its land acquisition practices, which have led to disputes with local communities especially in the area of Traditional Authority (TA) Maseya in Chikwawa district.
(Editor’s note: Critical Takes asked Illovo, via its parent company ABF, to respond to key points in this article. Illovo provided a response which says that it “strongly contests these allegations and characterisations”. Readers are encouraged to read this response which is published below.)
While Illovo's own policies commendably outline strong commitments to human rights, legal compliance, and respect for local communities, it is concerning that realities on the ground in Malawi do not always appear to reflect these principles.
Local smallholder farmers that I personally talked to in Chikwawa and Nsanje feel that they are pressured into unfavourable contracts which limit their income potential and access to land. They feel pressured into joining cooperatives solely dedicated to growing sugarcane for Illovo: currently there are three such cooperatives namely Kasinthula, Phata and Katunga-Maseya (KAMA), all in Chikwawa district.
Farmers have told me that they experience this pressure from traditional leaders, certain civil society organisations and government officials and it often manifests in community meetings where these influential figures urge them to pool their land together with other community members for sugar cane farming for Illovo. These meetings create an environment where local villagers feel obligated to comply, fearing social and economic repercussions if they resist. Furthermore, local villagers may find themselves obliged to hand over their land to Illovo’s cooperatives because they lack the financial means to continue farming independently.
Illovo’s representatives engage with traditional leaders and government officials and do not take part in the community meetings. However, communities observe these influential figures calling for actions which will benefit Illovo’s commercial interest and believe that they are being organised by the company.
(Illovo’s response says: “Illovo Sugar Malawi is not involved in land acquisition and exerts no direct or indirect pressure on growers to make land available.” See the company’s full response, below).
Illovo benefits from the widespread rural poverty in Malawi in the sense that it can use its resources to acquire land that struggling villagers can no longer afford to maintain. Now, once the villagers relinquish their land, withdrawing from these "contract" farming arrangements becomes nearly impossible due to Illovo's infrastructure investments, including canals and irrigation systems that integrate the land into a single, undivided farming area.
(Illovo’s response says: “We do not make infrastructure investments on land owned by growers; neither do we restrict access to water or roads.” See the full response, below).
Local resistance
One ongoing case involves village headmen in TA Maseya who have for a long time resisted giving up their land to Illovo for inclusion in the KAMA cooperative. These headmen consider that cultivating sesame seeds, pigeon peas, millet, sorghum, and other crops yields more income than what Illovo offers for growing sugarcane on the same piece of land: for instance, that Illovo pays farmers as little as the equivalent of £36.00 per year, while growing sesame, which matures within three months, can fetch a farmer as much as £1,118.00.
This point has also made to me by villagers who emphasise that they can earn more income from their crops compared to Illovo's contract farming terms. They also express concerns about future generations if all the good land is ‘loaned’ to Illovo without the possibility of reclaiming it.
A broader regional issue
Corporate land acquisition are often driven by global demands for food and biofuels, as well as the region’s rich natural resources, and are not unique to Malawi.
Land grabs have occurred in Mozambique, Zambia and Zimbabwe where large-scale land acquisitions by international investors have frequently displaced local communities. These acquisitions often prioritize export-oriented crops, which disrupt traditional farming practices and threaten local food security. Promises of development and job creation made by investors often fail to materialize, leaving communities in a worse state than before the land was acquired. These land grabs have resulted in social tensions and a decline in smallholder farming, which is crucial for local food production and economic stability.
The “Sugar Price Must Fall” campaign
In response to a sharp drop in sugar availability and a surge in sugar prices in Malawi, the Center for Democracy and Economic Development Initiatives (CDEDI) launched the ‘Sugar Price Must Fall’ campaign on 6th June 2023. This effort included engaging with Illovo and other stakeholders to address the crisis, which saw sugar prices peak at the equivalent of £2.24 per kg, a price that made sugar unaffordable for the majority of Malawians.
During these engagements, farmers expressed their grievances with Illovo’s land acquisition practices. The campaign evolved to address both the pricing crisis and the issue of land grabs and the plight of local communities in sugar-growing areas.
We engaged on these issues with the Ministry of Trade and Industry, which organized a meeting on 18th July, 2023, attended by the chief executive of Illovo, government officials, contract farmers, and CDEDI. The Ministry acknowledged the issues we raised, but said there were challenges in implementing effective solutions. Privately we were told later that one of these challenges was support for Illovo from within the government. Consequently, this engagement did not produce immediate and meaningful outcomes.
We also appealed to the Parliamentary Committee on Trade and Industry to institute a public inquiry into sugar pricing and related land issues. This inquiry took place at Parliament Building in Lilongwe between 13th and 14th July 2023 and brought together key stakeholders, including CDEDI, members of Parliament, the Malawi Revenue Authority and Industrial User Association members such as Chibuku, Coca-Cola and Castel. Although the inquiry highlighted the concerns of sugarcane farmers and Malawians in general, it hasn’t led yet to meaningful changes.
Following the parliamentary inquiry, Illovo organized a tour for members of the Parliamentary Committee on Trade and Industry to Zambia and Mozambique in June 2023 to learn about sugar prices in the neighboring countries’ border districts. This is itself an illustration of the power imbalance between a wealthy company like Illovo, which can afford to bring legislators on such trips in support of its point of view, and small farmers who live in poverty.
(Illovo’s response: “Illovo Sugar Malawi has regular interactions with the Malawian government and the agencies that regulate our business. It is our policy that when parliamentarians approach us with requests to visit our estates they bear their own costs. In other interactions, certain travel and subsistence costs may sometimes be paid in line with official rates provided by the Malawian parliament or government.” See full response, below.)
Local communities have actively pushed back against Illovo's practices by demanding meetings with the District Commissioner of Chikwawa. These grassroots efforts have been crucial in raising awareness and pressuring authorities to address the concerns of smallholder farmers. The collective action of local farmers and civil society organizations has played a pivotal role in challenging corporate dominance and advocating for fair treatment and compensation.
What we achieved from engaging with the government and Illovo
The farmer cooperatives associated with Illovo still retain ownership of the land that local villagers initially handed over to them. However, the expansion of these cooperatives, particularly under the KAMA initiative, has been halted, providing a temporary reprieve for local farmers. This pause allows farmers to keep their land and explore more sustainable and profitable agricultural ventures.
Furthermore, there has been a notable decline in local sugar prices, partly due to Illovo's increased production efforts, driven by pressure from civil society organizations (CSOs) and government intervention. This shift comes after concerns, widely reported in the domestic media, that distributors were hoarding sugar to create artificial scarcity and inflate prices.
Despite these achievements, the threat of land acquisition by Illovo remains a significant concern for rural livelihoods. The tensions between Illovo and its surrounding local communities is an example of ongoing struggles over land rights by rural communities across Southern Africa.
What needs to be done
The Malawi government needs to implement policies that prioritize the rights and livelihoods of local communities. It is good that the government has started implementing land registration, and Chikwawa district is one of the pioneers. The land registration system should clearly define and protect customary land tenure. There should be strict regulatory restrictions on land sales: large corporations should not be allowed ownership rights to land without thorough and transparent consultations that include local communities. The common person must be supported through access to affordable credit, agricultural extension services, and beneficial cooperative farming initiatives to enhance his or her independence and prevent land dispossession.
Illovo, in turn, should be required to contribute more significantly to local development by improving infrastructure such as roads, schools, and healthcare facilities. Duty bearers must champion these measures to foster inclusive, sustainable agricultural development, securing long-term economic stability and food security for Malawi and the broader region.
Kelvin Chirwa is a human rights activist with a focus on land rights for the most vulnerable people.
The company's response
Critical Takes asked Illovo and its parent company ABF to respond to key points in the article. The response from an Illovo Sugar Malawi spokesperson is as follows:
“Illovo Sugar Malawi strongly contests these allegations and characterisations.
Our support of sugar cane growers and the opportunity for agricultural employment that we create in the rural parts of Malawi where we operate is a critical contributor to community development and livelihoods.
At our two sugar estates in Malawi we support smallholder growers and their communities by offering agricultural inputs on deferred payment terms. We also provide growers with training, skills development and agricultural expertise, connect them with markets and work alongside Fairtrade. We believe strongly that growing sugar cane and selling to Illovo Sugar Malawi is of benefit to growers and their communities.
The majority of our growers, and the terms of their supply agreements, are managed through associations, co-operatives or third-party farm management businesses. Illovo Sugar Malawi is not involved in land acquisition and exerts no direct or indirect pressure on growers to make land available. We do not make infrastructure investments on land owned by growers; neither do we restrict access to water or roads.
Illovo Sugar Malawi has regular interactions with the Malawian government and the agencies that regulate our business. It is our policy that when parliamentarians approach us with requests to visit our estates they bear their own costs. In other interactions, certain travel and subsistence costs may sometimes be paid in line with official rates provided by the Malawian parliament or government.”