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What It Takes to Build a Successful Chinese Agricultural Partnership in Mozambique

It’s 9am in the morning and a message arrived on my WeChat: “The storm last night burnt down the water pump’s transformer again and now the local Water User Association came and asked for 18,000 Metical (around $278) for repairs. Furthermore, it’s difficult to collect the water charge for irrigation from several farmers. What should we do?”

The message was from the Chinese company that leads our rice out-grower demonstration project in the central Mozambican province of Zambezia. The various stakeholders involved in this project, including the Mozambican government, World Bank, the private NGO Alliance for a Green Revolution in Africa (AGRA) and the international business development non-profit organization TechnoServe, formed a WeChat group to update one another on progress and other issues.

The project kicked off in 2018 with a rather straightforward concept: to establish an out-grower scheme for local rice production, or what the Chinese call the “company plus farmer model”. Here’s how it works: the agriculture company enters into a farming contract with local smallholder households. Under the contract, the company provides rice seed, agricultural inputs such as fertilizer, pesticide and machinery services, as well as guarantees to purchase the paddy rice after harvesting at a fixed price and after deducting the input costs. At the same time, the Chinese company also provides training on agricultural practices to the farmers. The training covers techniques from seedling germination and seed broadcasting to agricultural mechanization and irrigation management.

The model itself is rather simple and has a long track record in China, often on large-scale initiatives. For example, in central Hubei province, one of China’s traditional rice-producing regions, thousands of hectares of rice production have been organized this way. By providing standardized inputs and training, the company is then able to ensure the quantity and quality of the paddy rice output that feeds into rice millers who then process around 200 metric tons of rice every day.

In 2018, the Mozambican government, World Bank and AGRA, initiated a similar out-grower project to introduce these Chinese rice production methods and technologies to local farmers. The project site was chosen based on existing irrigation schemes that had been built by the World Bank over the past few years.

A Chinese agricultural trainer teaches a local farmer in Mozambique new methods in how to distribute rice seeds.

The goal was simple: to increase farmers’ adoption of improved seed and inputs and transfer proven, effective agricultural practices as part of an effort to increase yields to 6 tons per hectare and structure a sustainable rice value chain supported by Public-Private-Partnerships (PPP).

A year and a half after the project launched, we’ve seen a number of encouraging results. All of the households within the project area enthusiastically participated in the initiative during the 2019-2020 rainy season and most of the farmers carried out field management activities in a timely manner according to the guidance given by the trainers. The Mozambique government also saw firsthand the positive impact the project had after the first year and agreed to commit further infrastructure investments in irrigation rehabilitation and water pump maintenance for the next two years.

A multi-stakeholder public-private-partnership that involved government, private sector actors and development partners had also been established and operationalized.

Farmers in the project areas raising hands to participate in the out-grower program.

While this all sounds encouraging. It wasn’t always easy.

Teaching smallholder farmers to grow rice using new methods and technologies proved to be a significant challenge and along the way we had to overcome three sizable obstacles:

OBSTACLE #1 Language and Culture

The biggest obstacle in China-Africa cooperation is, not surprisingly, language. I don’t mean English level because most of the Chinese companies that had been operating abroad for years do have English speaking staff or at least translators. However, in rural areas of Mozambique – a Portuguese speaking country with more than 40 local indigenous languages spoken, “lost in translation” becomes a real headache.

Discussions with the district’s Agricultural Director about the project design and scope.

Our experience at a farmer consultation workshop at the beginning of the project explains the pain vividly. Farmer consultation was put at the center of this project. Before we kicked off, the joint team called for a meeting with more than 50 representatives from the farmer’s association. The purpose was to explain the business model, the farming contract and the role of each partner. At the meeting, we had the whole management team from the Chinese company who spoke only Mandarin Chinese plus teams from the World Bank and AGRA who only understood English. Provincial officials only spoke Portuguese with only very limited English-language abilities while local farmers who spoke Chuabo, the local dialect in Zambezia province. Every sentence had to be relay-translated three times among the four different languages. No wonder then that the meeting ran for 3 hours!

However, the biggest challenge here wasn’t actually the language barrier or even the inefficiency of the whole translation process in meetings and the multiple versions of each document. No, it was something much more subtle, almost invisible. When you don’t share a common language then those little gestures and that feeling of having common interests with another person are lost.

The inability to speak directly with one another then creates an opening for mistrust and a “me versus you” attitude can easily take hold.

This process also required a lot of discipline from the different international stakeholders, namely donors and company representatives, who communicated predominantly in either English or Chinese, which made it difficult for the farmers’ voices to be included in the discussion.

For example, at one point during a consultation meeting, someone suggested that we stop translating every sentence into Chuabo the local language as a way to save time since most of the farmers understood Portuguese reasonably well. While that reasoning might be true, the suggestion was nonetheless rejected because the farmers needed to be at the center of the discourse. In fact, it was much more important that each of the farmer representatives understood the project design more than any of the other stakeholders in the room.

OBSTACLE #2: Farmers Had Become Indifferent to Donor Supported Projects

According to the project’s design, the smallholder farmers bear zero risk throughout the production cycle, since the agriculture inputs were given as a credit in advance. The farmers also do not have to worry about price fluctuations in the commodity market as they receive a fixed purchasing price from the company, a price that is on par with market rates.

With no risk, it seemed like a no-brainer for farmers to get on board and participate.

However, much to our surprise, farmer participation was actually quite low the first year. We were a bit puzzled at first but later found out that our project site in Zambezia province had received several donor grants over the past few years. Some of those previous donor-supported projects offered free inputs to the farmers as a way to incentivize participation. While the donor may have been well-intention, it gave the impression some local farmers that inputs are always provided free of charge as part of the project. Therefore, when our project tried to bring in the business-driven value chain approach, where farmers are encouraged to actually participate in the market as a “producer” but not an “aid recipient,” many farmers didn’t understand the concept of paying for the seeds, fertilizer, water and machinery services. Therefore, our public-private-partnership approach was met at first with resistance and misunderstanding.

OBSTACLE #3: “Seeing is Believing” Takes a Long Time in the Agriculture Sector

It takes a long time for farmers to adopt new inputs and farming practices. “Seeing is believing” is particularly true for smallholder farmers who simply do not have the extra money to take risks to experiment with new methods. So, it’s understandable that most farmers are reluctant to change their ways until they’ve been able to see for themselves that these new techniques lead to higher yields at the end of a planting season that can often last a half-a-year or more.

Separately, building trust among farmers also takes time. Given Mozambique’s painful colonial history and the role that foreigners have had in controlling the country’s land, often at the expense of local farmers, it’s not surprising that these small-scale farmers are often apprehensive about dealing with outsiders. Newcomers to the region, like the Chinese, face additional challenges given the poor reputation that some Chinese products have in the market and fears of supposed Chinese land grabs.

OBSTACLE #4: Local Government Needs to be Empowered

That WeChat message I mentioned at the beginning of this article about the broken water pump reflects another important challenge: the insufficient investment by the local government for critical farming infrastructure like electricity and irrigation.

The irrigation scheme was constructed with support from the World Bank. After it was built, the irrigation facilities, electric cables, and the transformer were all handed over to the provincial government. Sounds good, right? Well, when we visited the provincial department of agriculture, we discovered a big problem that is actually quite common in a lot of development programs.

Building the infrastructure is only the first step. Unfortunately, in this case, there were no funds included in the project to maintain it going forward.

The head of the crop division at the provincial department of agriculture acknowledged the problem but faced the same challenge that administrators everywhere confront where they have to balance lots of competing demands with insufficient resources.

Repairing a broken electric transformer.

As a result, the local government did not a budget for maintenance of the infrastructure, let alone the funding to form a proper water user association (WUA) that should be in charge of collecting water and electricity fees from farmers. The department also did not have the technical capacity to operate and maintain the water pump and transformer. The main electricity facility belongs to the national electricity company, EDM, but the extension that links the main facility with the transformer and on-farm power cable is the responsibility of the local department of agriculture. However, the department does not have a budget to hire electricians to repair and maintain.

This situation highlights an important, albeit common obstacle that confronts prospective private investors in the small-scale farming sector in a country like Mozambique where infrastructure, or the lack of it, is a critical factor. Therefore, investors not only need to plan for a project’s ongoing operational expenses but often a sizable capital commitment to build, or at least rehabilitate roads, water pipes, pumps, and electric power facilities.

Not surprisingly, a lot of investors blanche at those sizable upfront costs that can put enormous pressure on margins and significantly reduce their return on investment (ROI).

These Are Big But Not Insurmountable Challenges

While many of the challenges detailed here do seem daunting, and they are, it’s important to remember that they’re not insurmountable. To be successful in this space requires a multi-stakeholder approach involving government, the private sector, farmers and civil society groups who all coordinate and collaborate with one another.

Also, let’s not forget that patience is also extremely important.

For this particular project, we focused on how to build support for this new agricultural business model that would require farmers to pay for their own input costs but provide them with a more dependable, sustainable income in the long term. This required a lot of time to ensure that the farmer clearly understood their new obligation to pay for those input costs, understand what the output purchase price was and to the estimated profits per hectare of land.

So, this meant we had to focus a lot of effort on how to communicate this new arrangement to the farming community. Not surprisingly, we found that the most effective communicators were the farmers themselves. When peers talk to one another it’s always more persuasive than when the information from a trainer or an outsider.

We also formed a Public-Private-Partnership that included national and local governments, development partners, local research institutions as well as local business. Working together, that coalition was then able to leverage the strengths of each of its members to lever their competitive advantage, be it infrastructure investment, technical assistance, training or input subsidies. Development partners play a crucial role in de-risking and creating a conducive environment where the private sector can focus on what they do the best –business.

But the most important lesson we learned was to be patient.

There’s an old Chinese saying: The crops will die if one tries to help them grow by pulling the seedlings upward (“拔苗助长”). Obviously, this applies to farming but there’s also a lesson here for those engaged in building successful, sustainable agricultural partnerships in places like Mozambique.

The Chinese companies who are engaged in these initiatives, learned they need to be patient while building capacity and fostering cross-cultural international cooperation; just as the farmers need to be patient as well to see the results from these new methods and technologies while the coalition of public and private stakeholders learn to work together to grow and scale for the future.

Lu Xinqing is a Kenya-based Associate Program Officer at AGRA who focuses on developing and implementing strategic partnerships with China and strengthening African countries’ capacity to effectively leverage Chinese aid and investment to support agricultural transformation.

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