Rural income and poverty during times of change in Malawi

In most poor countries, supporting agriculture is the most obvious way to stimulate rural growth and provide food security. In Malawi, rural families have responded differently to radical policy changes and environmental crises. Looking at their changing livelihood strategies and incomes over time helps to analyse policies aimed at poverty reduction.

A paper from Harvard University in the USA reviews changes inincome experienced by rural families in Malawi over the period from 1986 to1997 and analyses the reasons for these changes. Until the late 1980s, Malawi’sagricultural economy favoured large estate holders over small-scale producers.As part of a structural adjustment programme, the government allowed partial privatisationof agricultural markets. However, private crop traders failed to take on thestate’s crucial role as food supplier in deficit seasons, resulting in a foodcrisis in 1987.

Two policy shifts have beencrucial for smallholders. First, in the early 1990s, smallholders were allowedto grow and sell burley tobacco, which had previously been limited to largeestates. Burley tobacco production has benefited smallholders, especially thosewith enough land, labour and inputs, and with accessto the farmer clubs. These smallholders are able to sell at world prices on theAuction Floors. Second, the government, with donor support, distributed smallpackages of fertiliser, hybrid maize seed and legumes free of charge to allsmallholders (though later this was narrowed to targeted categories).

Following these policychanges, agricultural production did diversify. However, maize remains centralto the food security of most smallholders. Key findings include:

• Government-subsidisedpackages intensified the livelihood strategies of smallholders, and did notreduce production or the effort smallholders put into work.
• Land remainsscarce and most families are unable to achieve self-sufficiency from their ownproduction. More than 90 percent of households bought extra maize.
• Most familieslack the resources and access to financial institutions to grow burley tobaccoon a profitable scale, though poorer farmers continue to earn some cash fromsmall scale production.
• Over the ten-yearperiod, gains were much greater among wealthier farmers and overall inequalitygreatly increased.

The government continues toplay an essential role in guaranteeing supplies of staple foods for consumersin the deficit season. However, the government and donors have failed toprovide a sustained set of agricultural policies: this remains the challenge.

Given the obstacles faced byMalawi’s rural economy, the author recommends the following to enhancedevelopment and food security in times of shortage:

• Governmentinvolvement is necessary to assure supplies of staple foods in times of crisis,as well as to improve overall economic performance in rural areas.
• Research must bedirected to providing new techniques to increase agricultural productivity.
• Farmers’ associationsneed more support to give smallholders greater influence over the buying andselling of produce.
• Infrastructuredevelopment, especially roads and electricity, is crucial to encourage non-farmactivities as an alternative income source.
• Civil societyorganisations have a valuable role to play in holding government accountable.