Agricultural Growth and Investment Options for Poverty Reduction in Malawi

Agricultural Growth and Investment Options for Poverty Reduction in Malawi

Agriculture's contribution to poverty reduction in Malawi

Malawi has experienced modest economic growth over the last decade and a half. However, agricultural growth has been particularly erratic, and while the incidence of poverty has declined, it still remains high. The Malawian government, within the framework of the Agricultural Development Plan (ADP), is in the process of implementing the Comprehensive Africa Agriculture Development Programme (CAADP), which provides an integrated framework of development priorities aimed at restoring agricultural growth, rural development and food security.

This paper analyzes agricultural growth and investment options that can support the development of a comprehensive agricultural development strategy consistent with the principles and objectives of the CAADP, which include achieving six percent agricultural growth and allocating at least ten percent of budgetary resources to the sector.

A dynamic CGE model is developed and used to examine the contribution of accelerating growth in alterative agricultural crops and sub-sectors, and to assess how Malawi can achieve the CAADP target of six percent agricultural growth by raising agricultural expenditure to at least ten percent of the government’s total budgetary resources. The impact of agricultural growth at the macro- and microeconomic levels, as well as on poverty, is also estimated.

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