The Case for and Against Export Mandates for Oilseeds and Pulses
MaSSP Project Note, December 2020
Authors: Dennis O. Ochieng and Bob Baulch
A new project note, authored by Dennis O. Ochieng and Bob Baulch, analyses the benefits and constraints of export mandates for oilseeds and pulses in Malawi. An export mandate means that exports can only be made through a structured market, such as a commodity exchange or a formal trading floor/platform where agricultural value chain actors (farmers, commodity exchanges, millers, processors, exporters) conduct organized, regulated trade, usually with specific financial arrangements. In Malawi, a singular example is the tobacco export mandate which has existed for over 70 years with a formal and organized market structure through the auction floors.
The Government of Malawi has prioritized increasing agricultural diversification and exports in its National Export Strategy, especially for widely grown crops with export potential such as groundnuts, pigeon peas, soybean or other beans, and sunflower. Building on the positive effects of mandating tobacco exports, an extension of export mandates to these crops can have important benefits, such as improving foreign exchange revenue, increasing reliability of trade statistics, or facilitating the development of structured markets. However, the authors also highlight several implementation issues that can offset potential benefits. Challenges include limited understanding of the operations and benefits of structured markets, limited geographic reach of the commodity exchanges, and the informal and fragmented value chains of oilseeds and pulses in Malawi. Hence, while export mandates offer various advantages, they also pose certain risks that need to be carefully balanced before the proposed export mandate regulations are implemented.
Click here to download and read the project note. (PDF 294 KB)
https://doi.org/10.2499/p15738coll2.134211
Featured image: Photo Credit Mphatso Mtukulu
