Working Papers

× Rural labor markets in Africa are frequently characterized by underemployment, with farmers unable to fully deploy throughout the year one of their most important assets—their labor. Using a nine-year panel data set on 1,407 working-age adults from rural Malawi, we document changes in rural underemployment over this period and how they are associated with urbanization. Nearby urban growth results in increased hours worked in casual labor (ganyu) and in non-agricultural sectors, at the expense of work on the household farm. Improved urban access is also associated with a small increase in wage labor and, at the intensive margin, with hours supplied in household enterprises. We draw lessons from these results for policies, investments, and interventions to leverage urban growth for rural development.

× Agricultural development in Malawi faces an important conundrum. While agriculture is the backbone of the economy, many smallholders will not be able to farm their way out of poverty. Shrinking farmland size severely limits the total income that can be earned from farming, even at much higher levels of productivity per area farmed than are now achieved. Urbanization embedded in the modernization of locally relevant value chains provides a promising pathway to inclusive development as it serves to simultaneously raise farm incomes, create income-earning opportunities off the farm, and create specialized urban hubs that can boost urban economic growth through agglomeration economies. After laying out these concepts conceptually, we apply them to a specific example of a modernizing mango value chain in Salima/Chipoka. Salima and Chipoka form an urban cluster about 100 km from the capital Lilongwe, located on the lakeshore of Lake Malawi. The Malawi Secondary Cities Plan has identified this cluster as one of eight that are to form an interconnected network of secondary cities, geographically spread across the country, with productive activities in each anchored in the economy of their rural hinterlands

× Primary agricultural cooperatives in Malawi, in contrast to other farmer-level organizations, have legal status and can own assets, borrow money for their operations, and sign contracts, making it easier for them to do business for the profit of their members. Conceptually, such cooperatives enable their member-farmers to achieve economies of scale for their commercial activities. By joining together in a cooperative, members can obtain commercial inputs at lower prices closer to wholesale prices than if they purchased the inputs as individuals. In selling their output, by aggregating their crops and other products into larger lots that the cooperative then negotiates to sell on their behalf, buyers can achieve greater efficiency in buying from them and can be expected to offer a premium over the prices that they would offer farmers selling those products individually. Cooperatives can also serve farmers in providing an important channel for obtaining information and advice to increase their productivity and the profitability of their farming. Moreover, by joining together to achieve common objectives in primary agricultural cooperatives, member-farmers can exercise greater influence on local and national policy issues of concern to them, while also building social cohesion, solidarity, and trust within their communities.

× Malawi has suffered from weak economic growth since its independence in 1964. Over 50 percentof 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.

× Do electoral considerations play a role in the targeting of humanitarian transfers? We analyze the targeting of direct cash and food transfers distributed in Malawi in response to an exceptionally poor harvest following a late and erratic rainy season of 2015-16. Combining household survey data on transfers with a remotely sensed measure of drought and with the results of the 2014 and 2019 parliamentary elections, we show that transfers were disproportionately targeted at marginal constituencies. Rather than distributing the transfers based solely on need or mobilizing its tribal base, the government attempted to persuade swing voters to support its candidates in the next elections. We nd no evidence that this strategy was successful at increasing the vote of ruling party candidates in subsequent elections.

× By directing increasing shares of their farm production to the market and, thereby, realizing greater incomes, farming households can accelerate local rural economic development. In this study, we examine household and spatial factors that may drive smallholder farming households in Malawi to produce and sell maize, groundnut, and soyabean. Two cross-sectional analyses are done using household level data from rounds of the Malawi Integrated Household Survey (IHS). First, using data for farming households from the fifth IHS (2019/20) in a series of weighted logistical models, we examine which of a set of household and spatial level factors are associated with a household producing each of the three crops. For maize and groundnut, we extend the analysis by similarly identifying the factors associated with whether a producing household sells any of their maize or groundnut, and if, they do, whether they sell more than half of their harvest. The second analysis consists of replicating the logistical models for production and sales using household data from the fourth IHS (2016/17) and comparing those results to the results obtained from the fifth IHS. This is done to identify whether any drivers of the production and sale of the three crops are changing over time.
Overall, only a few factors are consistently associated with a farming household choosing to produce a particular crop or to sell part of their production of the crop. We also see limited changes between 2016/17 and 2019/20 in the drivers of the production and sale of these crops. However, the strength of the positive associations between landholding size and the commercial production of the three crops intensified between the two surveys. This suggests that as landholdings become smaller with continuing population growth, commercial production will increasingly be limited to those households with the largest landholdings. Government and other stakeholders in rural economic development can consider the evidence from these analyses in developing strategies to foster greater diversity in employment in rural economies across Malawi away from agriculture, while nonetheless promoting increased production by those smallholders in a position to participate profitably in the value chains for these crops.

× This working paper builds on a report which was prepared for the 2020 ECAMA Lakeshore Conference in November 2020. It extends and updates the initial results of modeling undertaken by the International Food Policy Research Institute to assess the short-run impacts of COVID-19 control measures on the Malawian economy. We also consider the short-run effects of external shocks associated with disruptions in trade and tourism, investment, and remittance flows on the Malawian economy, as well as two medium-term paths assuming either faster or slower recovery during the remainder of 2020 and 2021. Using a Social Accounting Matrix multiplier model, we estimate GDP declines by around 16.5 percent during April/May 2020 due to social distancing measures. This leads to around 1.6 million people, mainly in rural areas, temporarily falling into poverty, although urban households suffer the largest income losses. We also model the impact of a faster and a slower lifting of restrictions and external shocks during the remainder of 2020 and 2021. With faster easing of restrictions, cumulative GDP gains turn positive by the third quarter of 2021 under the fast recovery scenario and exceed their pre-COVID-19 levels by US$178 million before the end of 2021. However, under the slow recovery scenario, Malawi’s GDP continues to decline until the end of 2020 before recovering during quarters 1 and 4 of 2021. However, this is not sufficient to wipe out the losses in quarters 2 to 4 of 2020, resulting in cumulative losses under the slow recovery scenario of US$332 million over the two years. Relative to the without COVID-19 scenario, US$937 million of GDP is lost under the fast recovery scenario and US$1,447 million under the slow recovery one. As both the development of the COVID-19 pandemic and the economic situation in Malawi are highly uncertain at the present time, the results reported in this paper should be regarded as interim estimates, which are subject to revision as the underlying health and economic data change.

× Malnutrition reduction efforts can be targeted based on the characteristics that affect children’s nutritional status. Using data from a nationally representative survey, we model the determinants of young children’s nutritional status in Malawi as measured by height-for-age and weight-for-height z-scores. We identify several determinants of children’s nutritional status including their gender (boys are more malnourished than girls), their mother’s education, the food security and location of their household (rural children are more acutely but not chronically malnourished than urban children) and access to clean water.

× This paper examines who uses and who benefits from warehouse receipt systems using unique transaction level data from the Agricultural Commodity Exchange for Africa (ACE) based in Malawi. Between 2011 and 2018, the ACE warehouse receipt system was used 710 times, with most receipts issued for maize, pigeon peas and soybeans. Large traders took out both the largest number of warehouse receipts and deposited the largest volumes, followed by medium and small traders, farmers associations/groups, and then farmers.
An inverse relationship exists between the duration of storage, the cost of financing and the returns that ACE warehouse receipt depositors make. Storing maize and soybeans for less than 180 days generally resulted in a depositor making a profit, while storing pigeon peas for less than 270 days, also generally resulted in profits to storers. However, 73 percent of warehouse receipts issued for pigeon peas made losses compared to 48 percent for maize and 53 percent for soybeans. Wide variations in profits to storers were linked to the collapse of pigeon pea exports and a fourfold de-cline in maize prices in 2016/17.
This paper develops alternative storage rules with the aid of seasonal price patterns and analysis of depositors’ behavior. These rules suggest possible combinations of deposit and sale months that can be used to guide depositors within year storage decisions. The wider implications of the ACE experience for the development of warehouse receipt systems elsewhere in Africa are also discussed.

× While contract farming provides opportunities to link smallholder farmers to markets, its sustainability depends on how the interests of both farmers and buyers are addressed. Previous studies analyze farmers’ preferences for contracts, but buyers’ preferences for contracts and design attributes are hardly examined. This Working Paper contributes to the knowledge gap by analyzing farmers’ and buyers’ preferences for contracts and design attributes, and the similarities and differences in preferences using a discrete choice experiment with 505 cotton farmers and 512 tea farmers in southern Malawi. Using a mixed logit model, the author examines farmers’ and buyers’ preferences and estimate farmers’ willingness to pay for improvement of contract attributes. Results show that both farmers and buyers have positive preferences for contracts in general and for many design attributes. The author however observes clear differences in preference for payment mode where farmers prefer spot payments while buyers prefer delayed payments. Further, while both parties prefer better quality products, there are no standardized grading systems for the two crops in Malawi. Consequently, buyers are skeptical of farmers’ ability to produce quality products while farmers are distrustful of buyers’ grading systems. Even though buyers are open to offer contracts that provide inputs or insurance to farmers, there are no information sharing platforms to guide in contracting farmers thus exposing buyers to risks of contract default. The author also finds that farmers prefer contracts that address their social needs as seen in their choice of contracts with funeral expenses insurance. Such attributes could strengthen the relationship between farmers and buying companies. Sustainable contract schemes require designing contracts that are acceptable to both farmers and buyers by balancing risks between the parties. Successful contract relationships have to build business relationships and foster mutual trust by developing standardized grading systems and information sharing platforms for buyers and farmers to guide selection into the schemes. To minimize side-selling, companies can advance cash credit to liquidity constrained farmers, but this must be accompanied by stronger contract enforcement mechanisms.

× Small farmers and traders often lack the market information they need to earn the most from their crop sales. This paper analyzes the effects of an action research experiment in central Malawi, in which four groups of smallholder farmers were provided with maize and soybean price information from a local commodity exchange during the 2019 marketing season, while four other groups of smallholder farmers did not receive this information. Using data from a panel survey of 399 farmers and 78 traders conducted before and after the main marketing season and using kernel propensity score matching approach to account for possible differences between the treated and non-treated farmers, we estimate the effects of the intervention on a number of outcome indicators. A before versus after analysis was also employed to evaluate changes in traders’ marketing outcomes. We find positive but statistically insignificant effects on maize and soybean selling prices, sales through structured markets and levels of commercialization after the intervention. We also find a negative and statistically significant effect on the quantity of maize sold by farmers, suggesting paradoxically that providing farmers with price information reduced their sales volumes. The proportion of traders aware of structured markets and their share of sales through structured markets also increased significantly after the intervention. The quantity of maize sold by traders as well as the selling prices for maize and soy-bean also increased significantly, although this may be due to factors other than the intervention. The study concludes that provision of price information alone is not enough to facilitate small farmers’ and traders’ use of structured markets. Greater effort is needed to sensitize farmers and traders on the quality and quantity requirements as well as the operations of structured markets.

× Malawi’s economic future is dependent upon a transformation of the economy that will involve increased economic productivity overall and considerable movement of labor and capital out of agriculture and into manufacturing and services. A dynamic Computable General Equilibrium model of the economy of Malawi was used to better understand the development gains that would be realized by 2030 through significantly increasing separately the productivity of each of the three sectors of the Malawian economy – agriculture, industry, and services. The scenarios run in the model involved increasing by 20 percent from current levels the annual growth rate in total factor productivity for each of the three sectors. The results show important trade-offs in the choice of which sector should receive emphasis in any economic development strategy. A services-led strategy would result in higher economic growth overall and broadly rising incomes, contributing the most to a structural transformation of the Malawi economy. However, the principal beneficiaries of increased investment to improve productivity in the services sector will be better-off households. In contrast, an agriculture-focused strategy would better meet the needs of the poor and their access to food, but would result in continued lagging growth for Malawi’s economy and many poorer households continuing to be unable to obtain sufficient income to exit their poverty and realize much better lives for themselves and their children. The industrial sector currently is much smaller than either the agriculture or services sectors, particularly in terms of employment, so significant increases in productivity growth in industry results in smaller benefits overall than comparable increases in agriculture or services.

× Despite concerted efforts to develop the fisheries sector in many developing countries, fish demand remains poorly understood due to weak and fragmented domestic markets, particularly in Africa south of the Sahara. An important area that affects the development of the fishery sector is limited understanding of how the choice between different fish products is affected by the socioeconomic characteristics of consumers, marketing factors and fish-specific attributes. Previous studies in Malawi have assessed consumer choice and demand for fish in general, without considering species-specific consumer choices. This paper analyzes consumer choices and demand for two species of tilapia, Lake Malawi Oreochromis (Nyasalapia) spp. (Ny) and Oreochromis shiranus (Os), in unprocessed and processed form, in urban Malawi. We use data collected from a sample of 584 urban households in Malawi’s two major cities, Blantyre and Lilongwe. Multivariate probit and seemingly unrelated regression models are employed to analyze the correlates of consumer choice and demand for tilapia products. Even though most consumers chose farmed tilapia (Os) over the wild tilapia (Ny), our results indicate trade-offs in choice but complementarities in demand for unprocessed and processed tilapia products. We find that the correlates of choice are not the same as correlates of demand for tilapia products. This is explained by heterogenous consumer profiles, market conditions, and tilapia trait descriptors. Developing robust tilapia value chains requires exploiting these complementarities and trade-offs, policy support to boost tilapia production, and reducing its relative caloric price to consumers. These measures will contribute to increased consumer demand. More generally fish breeding programs should also link breeding objectives to consumer choices and demand for fisheries’ products, particularly considering rarely examined fish at-tributes such as its nutritive value and body texture.

× This paper provides an updated analysis of the dietary patterns of Malawian households and their consumption of select nutrients - calories, protein, iron, vitamin A, zinc, and folate - using data from the third (2010/11) and fourth (2016/17) rounds of the Malawi Integrated Household Survey (IHS). Changes in food and nutrient consumption patterns between the two survey periods are examined across household wealth categories and across regions. Dietary diversity and patterns of food and nutrient consumption are found to differ significantly between rural and urban areas. Whereas urban households largely saw slightly increased or stable nutrient consumption between 2010/11 and 2016/17, most households in rural areas saw declines over this period. We also document small shifts in the relative amounts of foods consumed over this six-year period in both rural and urban households, with increased consumption of fish and pulses, legumes, and nuts, and decreases in meat, fruit, dairy, and root and tuber consumption. The contribution of animal-source foods as a share of total protein consumption remains low at between 10 and 20 percent, depending on the region, with the overall share of protein from animal-source foods falling slightly between the two surveys. With regards to adequacy of household diets for meeting nutrient requirements, in the absence of nutrient supplementation, many individuals will be subject to iron, vitamin A, and folate inadequacies. Of particular concern, the poorest households have very low nutrient consumption per person and have diets that rely on only a few foods from a small number of food groups. For all six nutrients, nationally just over half of the total amount of nutrient consumed came from food that was purchased. While we would expect this for urban households, even for rural households more than half of all calories and protein consumed came from foods that were purchased. For micronutrients consumed by rural households, between 40 and 50 percent came from purchased foods. While in the past, own production of food may have provided most Malawian households with most of the nutrients they consumed, this is no longer the case. For most Malawian households, including in rural communities, their food security and dietary nutritional needs now are equally tied to the market as to their own farming, if not more so. Drawing lessons from the analysis here for improving the food consumption data collected in the IHS surveys, more detailed and further disaggregated data would be beneficial, particularly to help estimate nutrients derived from fortified and processed foods. Additional information on how food is shared within households would also allow for a better understanding of nutrient inadequacies at the individual level. Collecting more information on the content of the meals that household members eat away from home would also be helpful in removing some uncertainty in the nutrient consumption estimates made from the data. Finally, additional information on food gifts received could clarify aspects of household coping strategies, the performance of formal social safety nets, and food choice.

× Seasonal analysis of the structure, conduct, and performance (SCP) of markets for staple crops has received relatively little attention in food policy analysis yet it has important implications for food and nutrition security. This study employs a mixed methods approach to analyze the SCP of maize markets in Malawi in the 2018/19 main harvest and lean seasons. We interviewed 749 traders from 74 markets across 8 districts, held 28 focus group discussions (FGD) with a total of 480 farmers and analyzed daily and weekly price data from 13 regional markets. The structure of maize markets was explored by examining marketing channels, barriers to entry and the competitiveness of different tiers of the marketing chain. Inequality in sales revenues, switches in trader types between seasons, quality and weights standardization, and the behavior of traders were used to examine market conduct. Performance was assessed by examining traders’ costs and margins, and the spatial and temporal integration of maize markets. We find that Malawi’s maize market is pyramidal in structure and highly competitive at lower tiers of trade but ‘oligopolistic’ at higher tiers. The market channels vary across seasons with switches between trader types and instances of rural-urban trade reversals. There is considerable inequality of sales revenues among traders of similar capacities, and a widespread lack of structured trading despite existing institutions. A high ratio of marketing costs to revenue suggests marketing inefficiencies. Malawi maize prices were highly seasonal and more volatile than neighboring countries. In contrast to previous studies, our findings show weak spatial integration of markets and slow price adjustments to long-run equilibrium values even among short-distance market pairs. The study highlights five pathways to improving Malawi’s maize marketing system: (1) increased policy predictability to promote private-sector investment; (2) institutionalization of quality grades and standardization of weights and measures; (3) increased commercialization of smallholder maize production; (4) investment in enabling infrastructure; and (5) the promotion of structured trading.

× Fortified premixed cereals can help caregivers meet infants’ nutrient needs, when used instead of traditional porridges to complement continued breastfeeding alongside the gradual introduction of nutrient-dense family foods from 6 to 24 months of age. Premixed cereals are widely used in nutrition assistance programs, but commercially-sold brands are often poorly regulated and labeled. This study provides the first combined assessment of nutrient levels and mycotoxins in samples of several commercially-sold premixed cereals (CPC) in Malawi, a country with high burdens of child malnutrition and an active market for CPCs. A sample of CPCs available in markets in central and southern Malawi were tested for macronutrients, iron, and zinc as well as for the presence of aflatoxins and fumonisin. Test results were compared to both the values stated on the CPC labels and available standards. CPC samples largely met moisture, ash, and iron standards set by the Malawi Bureau of Standards (MBS), but only 35, 56, and 39 percent of samples were compliant with Malawi standards for zinc, protein, and fat, respectively. Most locally-made products had aflatoxin and fumonisin levels that exceeded national and international maximum allowable levels for infant foods. Labeled values deviated significantly from test results for all nutrients except protein and zinc. Semi-structured interviews with stakeholders in Malawi highlighted challenges producers of CPCs face in meeting quality standards. Access to CPCs of high and uniform quality is hampered by poor market surveillance and standards enforcement, plus the cost of independent testing and other quality control measures. The introduction and enforcement of better standards for quality control and labeling of commercial complementary foods in Malawi could serve as a model for the other low- and middle- income countries facing similar issues.

× Using three rounds of the Integrated Household Survey conducted between 2004 and 2016, this paper examines Malawi’s challenging employment landscape, focusing on its rapidly growing youth. It finds little evidence of a structural transformation in Malawi’s economy or of youth being in the vanguard of any changes in cross-sectoral patterns of employment. Most Malawians spend all of their working years in the agricultural sector – indeed, the share of employment in agriculture in Malawi rose slightly between 2004 and 2016, though the share of full-time jobs inside agriculture declined during this period. Tabular analysis and multivariate modelling of employment choices show that youth are not participating in the limited growth that has occurred in services. Agriculture remains the sector in which most Malawians first obtain employment, and it is only later in their working lives that Malawian workers, particularly males, are in a position to obtain employment outside of agriculture alone. Malawi’s challenging employment landscape for youth is characterized by a scarcity of jobs outside agriculture and insufficient work hours within agriculture.

× Social safety nets are designed to protect vulnerable households and individuals from the impact of economic shocks, natural disasters, and other crises. However, targeting of vulnerable households is difficult and therefore often ineffective. Using data from two rounds of the Integrated Household Survey, this paper provides an overview of the overall coverage of various types of social safety nets and input subsidies in Malawi, and presents an analysis of their coverage of specific types of households with a special focus on poverty, shedding more light on the accuracy of the targeting of these programs. It finds that both the depth and the breadth of coverage of social safety nets increased between 2010/11 and 2016/17, while the coverage of agricultural input subsidies decreased drastically. Transfer programs targeted the poor more heavily than the rich, but still failed to exclusively target only the poorest segments of the population. Input and employment subsidies reached mainly the middle segments of the population in terms of wealth. The ineffectiveness of targeting is likely the result of the complexity of targeting criteria and procedures.

× This study examines the landscape in which Malawi’s two agricultural commodity exchanges (Comex) and warehouse receipts systems (WRS) operate and makes recommendations on how to improve their performance and benefits to key stakeholders. A mixed methods approach was adopted, involving semi-structured interviews with key market participants, compilation and analysis of secondary data from Malawi and other African Comex, and a review of existing literature. A review of international experience indicates that historically Comex often develop hand-in-hand with warehouse receipt systems (WRS), which help stimulate demand from off takers for standardized contracts while providing financing that increased volumes traded. In recent years, electronic trading platforms have given an impetus to the consolidation of existing Comex, and the development of regional networks of exchanges and warehousing arrangements. Nonetheless, a common reason why Comex fail is that they do no attract sufficient trading volumes to pay for their operating costs. This is often associated with default on contracts and fears of the market for commodities being cornered by a few larger traders. Of the 23 Comex in Africa, over half are still in their planning or inception stages and, with the notable exception of the agricultural futures and options traded on the Johannesburg Stock Exchange, most of the remaining Comex are thinly traded and receive financial support from government and/or donors.

× Improving social assistance programs is imperative to addressing problems of poverty and vulnerability in Malawi. Emergency aid has played an important role in alleviating hunger during humanitarian crises such as those in 2015-16 and 2016-17. However, the Government of Malawi and development partners recognize that emergency responses are not a sustainable solution to address vulnerability. This qualitative study examines the characteristics of resilient households and perceived effects of programs to improve food security and resilience from the perspectives of the beneficiaries and communities they serve. This beneficiary-centered approach explores socially-defined concepts of resilience, associated coping strategies, norms and political dynamics affecting programs. These findings can provide useful insights to improve the effectiveness of social assistance programs in this context.

× Various models and approaches are being implemented to provide technical assistance and support to improve smallholder farmers’ incomes and welfare in Malawi. This study evaluates the impact of farmer business schools (FBS) on crop incomes of smallholder farmers in Dedza district in central Malawi. The FBS approach, which has been implemented nationally by the Government of Malawi since 2011, consists of one year of group training and learning sessions for smallholder farmers focusing on improving market access and establishing profitable agribusiness ventures. This study used a multi-stage sampling procedure to collect data from 455 smallholder farmers: 162 FBS graduates, 84 FBS dropouts, and 209 non-participants. Using propensity score matching and difference-in-difference techniques, crop incomes from two groups of farmers were evaluated; FBS participants and FBS non-participants as well as FBS graduates and FBS dropouts. The study finds a positive yet small impact of FBS participation on crop income and production (US$20 per year on average), and no significant difference in crop income and production for farmers who graduated from FBS versus those who dropped out. Insights from the qualitative research component of this study suggest that this is primarily due to the limited financial resources smallholder farmers have to implement the agricultural techniques and business models taught in FBS.

× In early 2016, Malawi suffered its second consecutive year of harvest failure. An emergency was declared in April 2016 and the resulting humanitarian response, known as the Food Insecurity Response Program (FIRP), was of unprecedented scale: almost 40 percent of the population received in-kind food or cash transfers (or both) at an estimated cost of US$ 287 million. Yet despite the extensive nature of the response, prices for the main food staple, maize, stayed relatively ‘flat’ throughout most of the year and then declined during the pre-harvest lean season. This paper examines this paradox, focusing on why in-kind food distribution did not depress maize prices while cash transfers did not raise them. Using daily information on maize prices, and food and cash transfers from ten major markets during the height of the FIRP, we employ time series methods to analyze the properties of the series and model the formation of maize prices using autoregressive distributed lag models.

× This study has analyzed the factors affecting common bean production and marketing decisions by agricultural households in Malawi. The empirical results from applying the triple hurdle model to the IHS3 data demonstrate that different sets of factors affect smallholder farmers’ production, market participation and the intensity of participation decisions with respect to common beans. The location of the farmer, ownership of a radio, receipt of production extension services and FISP benefits, distance to main road and distance to the nearest market affected the agricultural household’s decision to produce common beans.

× Considering the potential of grain legumes for reducing hunger and malnutrition, this paper aims at identifying factors shaping demand for and consumption of dry common bean from a consumer’s perspective. Understanding and addressing these factors has potential to increase common bean consumption by enabling breeders to breed common beans with attributes that are preferred by consumers. The study employed a quantitative approach to assess various aspects of household common bean consumption from primary data collected in Lilongwe city. The study results suggest that socio-economic factors such as household size, education, gender, income, and number of children under the age of five years in the household play an important role in a household’s decision to consume common beans and the respective quantities consumed. Various product attributes such as grain size, gravy quality, and cooking time also influenced a household’s decision to consume common beans.

× This study used cross sectional data from the government of Malawi’s Farm Income Diversification Programme (FIDP) to examine the impact of FIDP on household welfare. Total annual household income, food security, and the wealth status of households were used as measures of household welfare. A propensity score matching procedure was used to make statistically valid comparisons between the welfare of households which participated and did not participate in FIDP. The results show that households which participated in FIDP had higher incomes and their food security status improved more than among similar households which did not participate in the program. The results further reveal that FIDP improved the wealth of participating households compared to their counterparts who did not participate. Those FIDP participating households engaged in livestock production, in particular, experienced considerable growth of income, which suggests that livestock enterprises coupled with income from crops could be an important pathway for improving the wellbeing of households in Malawi.

× Contract farming is emerging as an important governance structure in certain agricultural value chains. This study was done with the objectives of understanding the contractual relations between buyers and small-scale growers in the tobacco industry in Malawi and the impact of contract farming on smallholder incomes. Cross-sectional data was collected from 211 contract and 109 non-contract smallholder burley tobacco farmers who sold tobacco in the 2012/13 season. Two analyses were undertaken. First, the study analyzed the contractual arrangement and the performance factors under contract using analytical methods from transaction costs economics. Commercial banks, through the tobacco buyer, provide farmers with input loans, which farmers use to obtain fertilizer, seed, and extension services, all of which are important to increase tobacco productivity. The results of the contract analysis indicated that side-selling, information asymmetry, moral hazard, and strategic contract default by farmers were some of the transactions costs that affect the success of contract farming. However, the contractual arrangement also contributed to reduced transfer costs and reduced the rejection rate for the tobacco produced by the contract farmers. Moreover, to the buying company, contract farming contributes to reduced monitoring costs, as farmers work in groups and monitor each other’s activities, such as baling of the tobacco leaf, which ensures better quality tobacco being offered under contract. Secondly, for the impact evaluation of contract tobacco farming, a treatment effect model was used. The study analyzed the factors that affect farmers’ participation in contract farming and the effect of that participation on net tobacco income. Landholding size, access to extension services, distance to the auction floor, and the gender of the tobacco farmer were found to strongly affect the participation decision. Differences in income between contract and non-contract farmers were found to be strongly influenced by landholding size and monitoring of sales at the auction. Contract participation increases tobacco income by 46.6 percent. This finding justifies making efforts to contractually link more smallholder farmers to tobacco companies. Therefore, a policy needs to be in place to facilitate such contracts between small-scale farmers and companies that buy tobacco leaf in Malawi.

× Using panel data econometric techniques, this paper evaluates how public expenditure influences agricultural performance at the district level in Malawi by empirically estimating localized expenditure multipliers for the districts. The results of the analysis show that public expenditures in agriculture have generally positive but variable impacts on agricultural growth at the district level. The paper also finds that there are substantial differences in terms of fiscal multipliers among the districts: most of these multipliers lie below one, although some are above one, while a few are negative. These results confirm that increasing public expenditures in agriculture can yield modest but positive impacts on agricultural productivity. The realization of improved impacts partly depends on both enhancing the quality of public spending and improving the health of public finances across the districts of Malawi.

× This study assesses the efficacy of maize export bans in improving food security in Malawi and of minimum farm gate prices in increasing the incomes of Malawian smallholder farmers. It relies primarily on price and trade flow analysis using secondary data. In brief, the analysis shows that neither tool has been particularly effective in recent years in achieving their stated policy objectives. On the contrary, both maize export bans and minimum farm gate prices have been mostly non-binding or even counterproductive in their effects.

× Restrictions on exports of staples or cash crops are frequently imposed in developing countries to promote food security or industrial development goals. By diverting production to the local market, these policies aim to reduce prices and increase the supply of food or intermediate inputs to the benefit of consumers or downstream industrial users. Although export restrictions reduce aggregate welfare, they are attractive to policymakers: Governments gain support when they are seen to keep consumer prices low; likewise, politicians are swayed by industrial lobbyists who promise increased value-addition in exchange for access to cheaper inputs. This study weighs in on the debate around the desirability of export restrictions by simulating the economy-wide effects of Malawi’s longstanding maize export ban as well as a pro-posed oilseed export levy intended to raise value-addition in processing sectors. Our results show that, while export restrictions may have the desired outcome in the short run, producers respond to weakening market prospects in the longer run by restricting supply, often to the extent that the policies become self-defeating. Specifically, maize export bans only benefit the urban non-poor, while poor farm households experience income losses and reduced maize consumption in the long run. The oilseed export levy is equally ineffective: Even when export tax revenues are used to subsidize processors, gains in industrial value-addition are outweighed by declining agricultural value-addition as production in the fledgling oilseed sector is effectively decimated. The policy is further associated with welfare losses among rural households, while urban non-poor households benefit marginally.

× This study identifies factors that affect resilience to drought among smallholder farmers in Salima, one of the districts frequently affected by drought in Malawi. The study contributes to the existing literature by constructing a drought resilience index (DRI) and uses it to determine the effect of drought resilience on the welfare of farming households. Principal Com-ponents Analysis (PCA) is used to construct the DRI. Appreciating that smallholder farmers actively respond to events that threaten their livelihoods, the study identified how factors such as household assets, social capital, the size of land held by the farming household, and others factors help farmers to absorb adverse welfare effects resulting from prolonged dry spells and droughts. In order to capture the effect of drought on the welfare of farming households, a stochastic frontier production function is estimated. Results suggest that over 62 percent of households in the study area were not resilient and, hence, vulnerable to the adverse effects of dry spells. Factors such as age of the household head, size of the farm family, landholding size, and the number of immediate family members living outside the household are identified as af-fecting the drought resilience of farming households. The study also finds a positive correlation between resilience and improved household welfare. The policy implications from the results of this study include promoting productivity enhancing technologies, diversifying crop production from maize, and pursuing household livelihoods outside of agriculture in order to reduce the risks to household welfare resulting from drought.

× This paper considers potential strategic options for agriculture and development in Malawi in the context of the country’s current situation and the prospects the country faces. After briefly reviewing current national and sectoral policy and potential roles of smallholder agriculture in economic growth, we set out the current situation in order to consider strengths, weaknesses, opportunities and threats. We conclude that a major emphasis is needed on supporting changes that reduce the rate of population growth and promote capacity for adaptation and resilience to climate change. Rapid increases in the productivity of agricultural land and labor and in rural incomes will be critical to this, alongside increased education and empowerment of girls and women. There are, however, difficult potential trade-offs to negotiate (for example, between increased irrigation and reduced inflows into Lake Malawi) and these need further consideration.

× This study considers the extent to which smallholder farmers, including those who do not necessarily produce a surplus for the market, might benefit from participating in warehouse receipt systems (WRS) in terms of improved income and food security. We consider three potential channels: efficient food markets; reduced post-harvest losses; and access to credit. Firstly, we find that WRS, through its potential to increase demand for storage and facilitate temporal arbitrage, could address high price seasonality driven by high transport margins and thin commodity markets. By lowering price seasonality, WRS would benefit net-consuming households that tend to sell low and buy high. However, since temporal arbitrage transactions are associated with costs and price risks, engaging in them becomes undesirable if prices do not follow predictable seasonal patterns. Prices tend to be less predictable in countries such as Malawi where government market intervention is highly discretionary.

× This study undertakes an institutional analysis of the soya export sector in Malawi to determine the critical institu-tional barriers to engaging in and expanding soya exports. Institutional economics allows for the study of both formal and informal rules, examining the impact of both on transaction costs and resultant actor behavior.

× In 2004, the government of Malawi introduced the Malawi Agriculture Commodity Exchange under the Initiative for Devel-opment and Equity in African Agriculture program, which promoted modern information and communication technologies (ICT) to improve access to agricultural market information for both suppliers and buyers of market produce. Using co-integration error correction models, this study assesses the effectiveness of modern ICT-based market interventions in improving maize market efficiency in Malawi. A Threshold Autoregressive Error Correction model was used to assess price transmission speed. Comparisons were made of the speed of price transmission in the periods before and after the intro-duction of ICT technologies by the Malawi Agriculture Commodity Exchange - Initiative for Development and Equity in African Agriculture in 2004. The spatial integration results show that maize markets in Malawi were better integrated fol-lowing the introduction of ICT-based market interventions.

× This paper has two objectives. Our first objective is to review the research evidence on the factors known to be affecting the efficiency with which Malawian farmers use nitrogen fertilizer on maize. It is our position that such factors, along with non-random aspects of most trials, might explain the large gaps observed between researcher-managed plots and farmer-managed fields. Our second objective is to provide practical guidance to Malawian policy makers and the national extension sys-tem for helping farmers to raise the efficiency with which they use fertilizer. In so doing, we emphasize that crop diversifi-cation and soil management practices that raise soil fertility, while often viewed as “alternative” forms of agriculture, may be more accurately characterized as major components of an input-intensive and efficient production system that is both profitable and sustainable.

× This study investigates possible climate change patterns over the period 2040 to 2070 in order to assess the potential economic impacts for crop-livestock integrating and non-integrating farmers in Mzimba district in northern Malawi. Thirty year historical climate data were used with 20 Global Circulation Models (GCM) to generate plausible future climates. Future maize yields then were simulated using the APSIM crop model. The Trade-Off Analysis model for Multi-Dimensional Impact Assessment (TOA-MD) framework was used with the crop model results for economic analysis.

× This research examines the extent of market integration among different bean markets across Malawi. Market integration is an indicator that efficiency exists within the flow of information between markets. The study focused on beans as they are a cheap source of protein affordable by the majority of rural smallholder farmers. Market price data for beans was obtained from the Ministry of Agriculture and Food Security and covered the period 1995 to 2011. The markets included in the study are Chitipa, Rumphi, Mzuzu, Lilongwe, Mitundu, Lizulu, Lunzu, Luchenza, and Bangula. Like prices of other agricultural crops, bean prices follow a general seasonal pattern, rising with increasing time since the last harvest and decreasing during the harvest period.

× A large proportion of Malawian households are caught in a trap where poverty and food insecurity reinforce one another and where periods of food deficits and severe food crises are frequent occurrences. In recognition of this, the Malawian government has since 2005/06 implemented a large-scale Farm Input Subsidy Program (FISP), which supplies half of smallholder farmers with sufficient fertilizer and maize seeds to satisfy the maize consumption needs of an average-sized family. While the program boosted maize production and lowered maize prices, thus ensuring increased caloric availability at the household level, its effect on overall food consumption, dietary diversity, micronutrient deficiency, and child nutrition is less clear. This study evaluates household expenditure survey data to measure changes in nutrition outcomes between 2004/05 and 2010/11.

× This study analyzed the determinants of crop diversification as well as the factors influencing the extent of crop diversification by smallholder farmers in Southern province. The study used secondary data from the Central Statistical Office of Zambia. Results from a double-hurdle model analysis indicates that landholding size, fertilizer quantity, distance to market, and the type of tillage mechanism adopted have a strong influence on whether a farmer practices crop diversification. Our findings have important implications for policies that are designed to enhance crop diversification. In particular, our results suggest the need for government to consider undertaking policies that will enhance farmers’ access to and control over land, that will provide farmers with improved access to agricultural imple-ments like ploughs, and that will bring trading markets closer to farmers.

× The purpose of this study was to assess the impact of irrigation on household food security and poverty using a case study of Bwanje Valley Irrigation Scheme in Malawi. The results also showed a positive impact of irrigation on daily per capita caloric intake, with both groups of irrigating farmers realizing similar improved levels of caloric intake over farmers that did not participate in the irrigation scheme. In addition, traditionally marginalized groups - households headed by youth, female-headed households, and low-income households - earned more agricultural income than what they would have earned if they did not participate in the irrigation scheme.

× This study tests the long-run and short-run integration of maize markets in Malawi using the co-integration approach within the Vector Autoregressive modeling framework. The analysis is extended to Wald-F Granger Causality tests to see the direction of causality between maize markets. A total of six maize markets, two from each region, were analyzed. Three are urban markets, while two of the three rural markets are border markets. The study uses monthly maize retail prices for the period January 2000 to May 2008. Study findings show that nine out of the fifteen market pairs are integrated in the long-run, but the degree of short-run market integration is low, implying that the transmission of price information is slow.

× Malawi has struggled to achieve sustained agricultural growth over the last four decades. As such there is need for in-creased investment and supportive policies if greater success is to be realized. As a prerequisite to identifying the role that improved policies and investment can play, a better understanding is needed of the incentives that producers in the agricultural sector obtain currently. However, research on the subject has been scanty. For this study, annual Producer Subsidy Equivalent (PSE) for the staple food crop, maize, were calculated for the period 1970 to 2010.

× This empirical study uses data from 1970 to 2010 to estimate levels of neopatrimonialism in Malawi. We then test how neopatrimonialism has affected policy-induced agriculture producer incentives. Three dimensions are used to measure neopatrimonialism – systematic clientelism, a power concentration index, and control of corruption. All were negatively related to the level of producer support provided farmers by government. This suggests that the manifestation of a patronage system creates policy-induced disincentives to agricultural production due to worsening corruption, concentration of political power, and a crowding out of development expenditure by the costs of maintaining a bloated civil service. This result reaffirms the belief that neopatrimonialism results in poor performance of the agricultural sector of countries in sub-Saharan Africa