*This is a revised version of the Working Paper originally distributed in March 2023. The original analysis of off‑farm income sources subsequently was found to have overlooked remittances from biological children of the head of household or the household head’s spouse who were 15 years old and over and did not live in the household. Inclusion of this income increased the mean total annual net income per capita for farming households from MK 154,920 in the original analysis to MK 168,210 in the revised analysis presented here.
Abstract: Malawi has suffered from weak economic growth since its independence in 1964. Over 50 percent of the population live below the poverty line, unable to produce enough or to otherwise obtain sufficient income to meet all of their basic needs. Poverty is concentrated in rural areas. Smallholder agriculture dominates employment in rural Malawi. However, with continuing population growth, the average landholding size for smallholder farming households is declining, resulting in many being unable to produce sufficient food to meet their own needs. To escape poverty, rural households increasingly must diversify their sources of income, but many lack the human and financial capital to do so. In this report, a detailed examination is provided of the agricultural production, non-farm employment patterns, and overall incomes obtained by farming households across Malawi using data from the fifth Malawi Integrated Household Survey (IHS5), conducted in 2019/20. The analysis demonstrates that most poor farming households will never be able to escape poverty through their farming alone, even with substantially higher crop productivity. Rainfed cropping remains the primary form of agricultural production for farming households in Malawi. While increasing numbers are engaging in irrigated farming during the dry season, the returns from such farming are inconsistent and low. More importantly, off-farm income sources, particularly temporary ganyu wage employment, are now critical to the livelihoods of most rural households, particularly those with small cropland holdings. The common assumption that agriculture is at the center of the livelihoods of rural households across Malawi no longer holds. Of equal importance is their ability to obtain sufficiently remunerative off-farm employment. In developing strategies for rural economic and human development in Malawi, accelerating agricultural production growth, particularly through increased productivity, and increasing the returns to farming are necessary, but incomplete solutions. Equal attention must now be paid to how workers in farming households can also qualify for and obtain good off-farm jobs. Without increases in such employment opportunities, the economies of most rural communities across Malawi are likely to stagnate and poverty will deepen among households living in them.
Authors: Todd Benson and Joachim De Weerdt
Read and download the working paper here (PDF 3MB)
