High levels of poverty and food insecurity combined with weak food markets have prompted many African governments for political and socioeconomic reasons to assume the responsibility of ensuring adequate domestic food supply at reasonable prices. Malawi is no different, with significant government intervention in the maize market on both the production and marketing sides. Interventions include providing farm input subsidies and recommending minimum farm gate prices to encourage maize production; supporting a grain marketing board and a national food reserve agency to stabilize maize prices and provide emergency food assistance; and controlling international maize trade, mainly through restrictions on maize exports. This note explores the effects of government intervention in Malawi’s maize market, and proposes medium- to long-term policy guidelines that will improve the functioning of these interventions. These considerations are timely as Malawi attempts to transform its agricultural sector into a more commercial and outward-oriented one.
By Karl Pauw and Brent Edelman, 2015
