Economic Reforms and Rural Livelihoods in Malawi

Abstract

Prior to the 1980s, there has been a strong bias against smallholder agriculture and towards estate agriculture in Malawi’s development strategy. The economic reforms enacted in the 1980s and 1990s attempted to redress this bias by removing most restrictions of pricing, output choice and marketing for smallholder farmers. This paper examines whether the reforms have had the desired effect of providing a supportive environment for smallholder farmers to follow livelihood strategies that would enable them to move out of poverty. The paper finds evidence of a positive supply side impact of reforms on smallholder agriculture, with a significant increase in food crops production in the period 1994-2000, particularly in sweet potatoes, cassava and maize. Coupled with rising real prices of most food crops during this period, this has meant that rural incomes of most smallholder farmers has seen a sustained increase in the post-reform period. However, significant weaknesses remain in the economic environment related to agricultural marketing, cost and provision of inputs, particularly fertilisers, and agricultural credit. This is most evident in the ongoing food crisis in the country, where weather-related shocks to maize production have been exacerbated by weaknesses in marketing and food distribution systems. The paper argues that a comprehensive poverty reduction programme in Malawi will need to emphasise a diversified set of livelihood strategies for rural households that encompass engagement in maize production, engagement in tobacco production and greater involvement in nonfarm economic activities.

Citation

Kunal Sen; Chinkunda, A. Economic Reforms and Rural Livelihoods in Malawi. (2002) 27 pp. [LADDER Working Paper No.20]

Economic Reforms and Rural Livelihoods in Malawi

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