Increased commercialization of agricultural production by smallholder farmers is important for the potential second round economic development benefits for their communities. By increasing production and income from the sale of their crops, smallholder farmers increase their demand for the goods, services and labor that can be supplied by their neighbors. This may expand local non-farm employment opportunities and raise incomes for those other households. To increase the commercial production of pulses – common bean, cowpea, and pigeonpea – and oilseeds – groundnut, soyabean, and sunflower – what type of smallholder farmers should be targeted?
In a recent IFPRI virtual brownbag seminar, held on 3rd February, Todd Benson, Senior Research Fellow at IFPRI, presented a study that examines the household and spatial factors that drive participation by smallholder farming households in supplying oilseed and pulses value chains.
The study’s analysis had three parts: First, a spatial crop suitability analysis was presented for the three oilseeds and the three pulses of interest. Based on climate and soil conditions across Malawi, this gives an agronomic perspective on where these crops can best be grown. Second, using data from the fourth Malawi Integrated Household Survey data (IHS4) of 2016/17, tabular analyses on oilseed and pulse production and sales by Malawian households were done. The tabular analysis aims to identify the types of households that might be best targeted for increased commercialization of these crops by dividing the IHS4 sample households into four categories based on their economic productivity and their level of maize sales (as a proxy for commercial orientation). Third, an econometric analysis was conducted to examine which household characteristics are most significantly associated with oilseed and pulse production, whether the producer of oilseed or pulses sells any, and if they sell, whether they sell a large share of their harvest.
To foster production of oilseeds, the results show that there is need to focus on smallholder farmers with larger landholdings in the mid-altitude plateau zone. It appears that land availability is the most important consideration in guiding farmers’ decision as to whether to produce oilseed and whether to sell some of what they produce. In terms of household characteristics associated with oilseed production and sale, there is no significant association between education levels within the household and the engagement of the farm household in oilseed production. This is a challenge given that the low oilseed yields obtained mean farmers should be encouraged to use more knowledge intensive higher yielding techniques in oilseed production. Increasing rural education levels should enable farmers to use such techniques effectively and also enable them to be more confident in profitably marketing their oilseeds.
Pulses continue to be produced primarily for own consumption for household food security reasons. They appear to be good crops for farmers with smaller landholdings, as they can be intercropped with other crops allowing efficient use of small plots. However, these pulses can also be sold when there is effective demand. Groundnut and pigeonpea have been important export crops, but they suffer from market disruptions – aflatoxin in groundnuts and restrictions on the export market in pigeonpea – which reduce producer incentives. There are strong regional patterns in the production for each of the pulses. The study shows great potential for expansion of the areas where the pulses are grown, but this will require both agronomic adaptations of current varieties and fostering strong markets in any new production areas
In contrasting household engagement in production and sale of oilseed and pulses, Benson argued that groundnut is more similar to the three pulses in the study than it is to the other oilseeds examined, soyabean and sunflower. Groundnut and the pulses can be used for own consumption or sold, when the producer can find a market. In contrast, soyabean and sunflower are more difficult to use within the household, so commercial consideration will motivate their production. This indicates that households with stronger market networks are most likely to produce soyabean and sunflower. Increasing commercial orientation of smallholders will be easier with soyabean and sunflower, particularly if market demand keeps growing. It is more difficult to build a commercialization strategy around crops that can easily be part of the food basket. Pulses can be part of agricultural commercialization efforts, but the challenges in building strong, reliable markets around these crops are larger than they are for soyabean and sunflower.
Benson concluded the presentation by highlighting how the analyses can be improved or extended. First, in the spatial analysis, crop suitability results in the lakeshore area are not very accurate because they are based on average agro-climatological conditions. There is need to take into account seasonal variability in those conditions, as this variability is an important source of risk for farmers in choosing to grow pulses or oilseeds. Second, now that the 2019/20 IHS5 data is available, it would be useful to use it to see if there have been any changes between 2016/17 and 2019/20 in the drivers of production or commercialization of oilseed and pulses. Third, the study used relatively simple econometric analyses – potentially more insights could be gained if continuous variables rather than dummy variables were used to refine the model specifications.
