This presentation was made during the launch of a book titled "Disentangling Food Security from Subsistence Agriculture in Malawi" by Dr. Todd Benson, IFPRI, at IFPRI Malawi brownbag seminar

1. Disentangling Food Security
from Subsistence
Agriculture in Malawi
Todd Benson
International Food Policy Research Institute
Washington, DC, USA
IFPRI-Lilongwe virtual book launch
Lilongwe | 7 July 2021
Book is freely available online at
http://www.ifpri.org/publication/disentangling-food-security-
subsistence-agriculture-malawi

2. Book’s focus
▪ Reduce Malawi’s persistent food insecurity by
moving away from reliance on subsistence farming
o Estimated average of 2.3 million Malawians annually have
been vulnerable to hunger over past 10 years
o Increasingly, harvests of most households cannot meet their
dietary requirements
o Limited use of improved seed and fertilizer on small (and
shrinking) landholdings; often coupled with drought or flooding
o In a context of weak and undependable markets
o Producers uncertain they can sell their crops for an
acceptable price
o Consumers uncertain they can reliably find food in the
market to supplement their own harvest
o Acute food insecurity adversely impacts the incomes,
assets, and wellbeing of the vulnerable over the long-term
2
0
2
4
6
8
10
12
14
16
18
20
Millions
Share of Malawi’s population
vulnerable to hunger annually,
2002/03 to 2020/21
Vulnerable
Not vulnerable
Sources: MVAC, FEWS NET, NSO (various).

3. Subsistence production and inadequate markets – a vicious
circle resulting in food insecurity
▪ Principal strategic approach to food security for Malawi continues to center
on household production for own consumption
o Despite inadequacy of subsistence farming for meeting all Malawians‘ food needs
▪ That a broader market-centered approach is not promoted reflects a vicious
circle of thin markets and risks to food access:
o Uncertain demand and volatile prices reduce incentives for commercial production of
food crops
o Consumers, in consequence, cannot rely on these markets to meet their food security
o Cannot be certain they will always find food in the market when they need it
o Weak markets for both producers and consumers fosters a continuing reliance on
own production to meet household food needs
▪ Relying exclusively on markets to meet food needs is fraught with risk
3

4. Three principal paths suggested that jointly will result in a
more food secure Malawi
1. Expand share of farming households that are commercially oriented
o Sharp increases in their productivity will result in a greater share of
production being brought to market, reducing volatility in food supplies
2. Rural economic transformation with increased nonfarm work
opportunities for all
o Higher incomes of local commercially oriented smallholders will boost
demand for broad range of locally-produced goods and services
o Results in fewer households remaining in farming
3. Deeper, more reliable and predictable food markets
o Households must be confident that markets in Malawi will work to their benefit
both as producers (for those remaining in farming) and as consumers
▪ Without these changes, subsistence production will remain the
preferred, lower risk strategy used to meet food needs
4

5. Contents of the book
1. Introduction
2. Food Security in Malawi
o Trends; determinants; political expectations around food security; institutions involved
3. Agriculture in Malawi
o Physical basis; production; soil fertility management, irrigation, landholding
4. Agricultural Markets
o Poor performance reinforces subsistence orientation of households
5. Recognizing Rural Economic Differentiation
o Rural economic development model; empirical appraisal of its validity for Malawi
6. Structural Transformation of Malawi’s Economy to End Hunger
o Sector-focused investment trade-offs, human capital development, urbanization
7. Actions to Advance toward a Reliably Food-Secure Malawi
5

6. Main audiences for the book
▪ Stakeholders in policy and strategy design processes
o Around food security and nutrition, agricultural development, rural economic
development, and economic structural transformation
o Members of Technical Working Groups established for agriculture, as well as for trade
o But also politicians, advocacy and civil society organizations, engaged youth,
journalists, and others
▪ Students in undergraduate or diploma courses in agriculture
o Provides detail on Malawi’s food security and agricultural development challenges
o Book can be a basic reference or, using its extensive bibliography, can point students
to detailed papers more relevant to their issues of interest
▪ Staff of international agencies assigned to Malawi with responsibilities
for food security and agriculture
o To build familiarity with the issues and options to address them
6

7. Selected issues
▪ Earlier slide on contents provides broad overview of book’s
scope
▪ In rest of presentation, three selected issues examined
o To stimulate critique and to foster discussion on these and
alternative approaches
1. Building productivity of commercially oriented farming
households to accelerate rural economic growth
o Both for agricultural development and for broader structural
transformation of the economy of Malawi
2. Improving fertilizer response in maize production
o Particularly in the context of input subsidy program
3. Building greater predictability into price movements in
food markets
7

8. 1. COMMERCIALLY ORIENTED FARMING HOUSEHOLDS AS
ENGINE OF RURAL ECONOMIC DEVELOPMENT & FOOD SECURITY
▪ To achieve rural economic transformation and sustainable food security,
propose placing commercial smallholder farming households at center
of such efforts
o Targeted support to enable them to significantly raise their productivity,
thereby expand their production, and increase
their incomes
o Their increased economic output will position
them within rural communities as engines of
local economic growth
o The expanded local economic opportunities
they foster will improve access to food and
provide greater food security for many other
rural households
8

9. Commercially oriented farming households centered
economic development – conceptual mechanism
▪ As productivity of commercial smallholders rises, their farm production and
incomes increase
▪ With this increased income, they will demand more of the generally nonmarketable
(outside of the local area) goods and services that their less agriculture-focused
neighbors produce
o Includes construction services; transportation; education, health, and other social
services; furniture and handicraft-making; and food and beverage processing
▪ This consumption linkage diffuses the economic gains of commercial
smallholders to other rural households
o As returns from their nonfarm activities begin to surpass those obtained from low-
productivity farming, many of these other households will seek to serve wider markets.
o Will transition from being poor, subsistence-oriented households to become
specialized in livelihoods outside of agricultural production
▪ Results in deeper local markets, more vibrant and diverse local economies,
improved access to food for many
9

10. Land – a challenge for commercial smallholder focused rural
economic development
▪ This economic growth pattern is rooted in crop productivity increases
over a significant share of all arable land
o Particularly for seasonal food crops
▪ To sustain local economic growth, mechanisms needed that will allow
productive commercial farming households to make use of the land
of less productive households
▪ However, customary access should not be undermined
o The many with such access to land must be assured they will have continuing access
o Customary land important both as a household asset and as part of the long-term
economic safety net for the household
o Conversion to titled freehold tenure with loss of customary rights is not required
o Rental arrangements must make it clear to all concerned how the landholder can
regain use of any of their customary land that is rented-out
10

11. Locally resident commercial smallholders are key
▪ Locally resident commercial smallholders are at the center of this
strategy of rural economic growth
o Absentee urban-based farm owners may have strong relationships within
the local community
o However, if they primarily use the returns from their farming to finance urban-
based consumption – consuming from urban shops or urban or imported
goods and services – their increased farm production offers only limited
benefit to the local rural community
o The consumption linkage through which their increased productivity might be
diffused to improve the welfare of others in the community will be weak
▪ It is the consumption of locally resident commercially oriented
smallholders that (initially) increases the incomes of their neighbors
who produce goods and services for the locality
11

12. More vibrant and reliable markets essential for commercial
smallholder focused rural economic development
▪ Strategy is based on the use of agricultural technologies and effective crop
management to raise agricultural production
▪ But that production is then sold. Requires deep and active markets that
provide reliable incentives for commercial agricultural production
o So, critical to the success of the strategy is increasingly more vibrant
markets
▪ Strategy will not work if only agricultural solutions are employed
o Yes, need significantly improved and expanded agricultural research and
information provision; improved technologies; supportive environment for the
success of cooperatives and other farmers’ organizations; and so on
o But equally important and necessary are parallel investments and policies
that strengthen agricultural markets
12

13. Different targeting for efforts aimed at rural economic
development and for those to assure food security
▪ The strategy recognizes rural economic differentiation
o Focus on commercial smallholders to propel rural economic growth
▪ However, do not conflate this strategy with those needed to assure the
food security of all Malawians
o Different targeting approaches are needed
▪ Efforts focused on food security and diets should be universal
▪ However, for efforts to expand commercial agricultural production, for
greatest impact, target those that are already commercially oriented
o Targeting other rural households with programs that will enable them to
assure their livelihoods outside of farming
o While for those unable to work and whose needs are not fully met by their
families, provide social protection support
13

14. A commercial smallholder focused rural
economic development strategy – is it feasible?
▪ Empirical assessment of share of households that
are commercial smallholders
o Using 2016/17 Integrated Household Survey (IHS4)
o Four category household typology
o Criteria used are rural/urban, sales of one-quarter or
more of maize harvest, poverty status, and whether
economically productive
o Only 5.5 percent of households in commercially
oriented smallholder category in 2016/17
▪ Clear that such a process of economic growth and
transformation in employment patterns in rural
communities in Malawi is now only in its
challenging initial stages, at best
14

15. Trends in commercially oriented smallholders as share of all
Malawian households
▪ Argue in book that agricultural and rural development
strategies should center on raising productivity of
commercially oriented smallholders
▪ But this argument is undermined by small share of
Malawian households in this category
o Are commercially oriented smallholders withering away?
▪ Apply the household typology to three rounds of the Malawi
Integrated Household Survey to assess trends
▪ Though few, commercially oriented smallholders not
withering away
o Despite shrinking landholdings, low productivity of sector,
and increasing urbanization
o Window of opportunity for economic development that such
households offer has not closed – at least not yet
15
6.3 4.4 5.5
71.8
68.0 66.6
10.3
12.3 9.2
11.7 15.3 18.7
0%
20%
40%
60%
80%
100%
2004/05
(IHS2)
2010/11
(IHS3)
2016/17
(IHS4)
Households in each
economic category over time,
% share
Urban households
Not economically productive
Other productive rural households
Commercially oriented smallholders

16. Commercially oriented smallholder households –
characteristics
▪ Several significant differences between
commercially oriented smallholders and other
productive rural households
▪ Most notable is much larger landholding size
for commercial smallholders
o Also, likely to be more educated and to
produce cash crops
▪ Less likely to:
o Have household headed by a woman
o Work off-farm on ganyu
o Rely on market to meet food needs
o Experience food insecurity
▪ Such contrasts can be used to target efforts to
increase productivity and commercial engage-
ment of commercially oriented smallholders
Commer-
cially
oriented
small-
holders
Other
productive
rural
house-
holds
Cropped area, ha 1.01 0.65
Female-headed, % 21 30
Members with
secondary educ., %
40 32
Produce tobacco, % 12 6
Engage in any
ganyu, %
57 65
Maize consumed
past week that was
purchased, %
30 47
Experienced food
insecurity in past 12
months, %
61 78
16

17. 2. SOIL FERTILITY MANAGEMENT AND FOOD SECURITY –
IMPROVING MAIZE YIELD RESPONSE TO FERTILIZER
▪ Malawi is known globally for its large smallholder-focused agricultural
inputs subsidy programs
o Government has employed them on-and-off since the colonial period
o Justified to a large degree to attain food security objectives
▪ Every year most public expenditure in the agricultural sector dedicated to
programs is for input subsidies
o Represents an immense opportunity cost that hampers other facets of
agricultural development
▪ Critical that these public resources be used efficiently
o But find that maize yield responses to fertilizer supplied through input subsidy
program is far less than the potential yield response
17

18. Potential maize yield response to fertilizer
▪ Two-year national fertilizer response trial conducted
in 1995/96 & 1997/98 seasons
o To determine maize yield response levels that can be
obtained under good smallholder management
o Trial done on sites in smallholder farmer fields –
at 3,088 well-managed sites across the two years
o Used urea and 23:21:0+4S at various rates with
hybrid maize seed
▪ Observed an average fertilizer response of
7.8 kg maize per kg of fertilizer applied
▪ 2.7 kg maize per kg of fertilizer applied was average response rate for
beneficiaries of three years of the input subsidy program
o Slightly more than one-third of potentially achievable response
18

19. Aiding farmers so that they obtain significantly higher maize
yield responses to fertilizer
▪ Substantial difference between actual and attainable maize yield
responses to fertilizer reflects resource constraints smallholders face
o Including:
o Timely access to sufficient quality seed and fertilizer;
o Adequate control of weeds, other pests, and disease; and
o Proper crop management
▪ As important, agricultural extension in the input subsidy program has
been virtually absent
o Assumption in its design seems to be that all farmers innately can make
effective use of fertilizer on their maize. Evidence shows they do not.
o Farmers need more extension advice from government or private input
suppliers on how to make effective use of fertilizer on their crops
o Build more intensive extension outreach into design of input subsidy program
19

20. 3. IMPROVE PREDICTABILITY IN FOOD
MARKET PRICES
▪ Unpredictable seasonal price patterns are a
central factor in Malawian households’ reliance on
subsistence farming to meet their food needs
▪ Weak markets emerge from the high risks
associated with ubiquitous uncertainty:
o Farmers uncertain they will find buyers who will offer
them a profitable price for their maize and other crops
o Consumers uncertain that will always find in the
market the food they require at a price they can afford
o Traders uncertain that it will be profitable to move
maize from areas of strong supply to areas of demand
or to store it for later sale
20
0
100
200
300
400
500
Maize
price,
USD/mt
Monthly average maize prices
in nine select Malawi markets,
2009 through 2018

21. Factors that drive uncertainty in Malawi maize markets
▪ Price shocks due to both poor and bumper national harvests
o Such shocks are inherent to low-input rainfed farming systems
o Challenging contextual element for food security in Malawi
▪ Unpredictable government restrictions on trade in maize
o Government argues that doing so safeguards Malawi’s food security
o But impedes access of Malawi’s maize producers to more competitive
regional markets and of consumers to supplies from Malawi’s neighbors
▪ Interventions in domestic maize markets by ADMARC, the agricultural
marketing parastatal
o Generally ineffective, but still disruptive, particularly for private traders
▪ Humanitarian responses to large-scale food crises involving food aid
o Necessary in the short term, but may set back market development
21

22. Reducing government-caused uncertainty in Malawi markets
▪ Of factors driving market uncertainty, those due to cropping conditions and
food aid are difficult to address through policy reforms
▪ However, restricting trade and how ADMARC operates are policy issues
o Current policies exacerbate food insecurity for many Malawians
▪ Liberalizing food trade
o Malawian households are increasing their reliance on the market for their food
o Particularly poorer households; all households in lean season before next harvest
o Increased engagement with regional maize markets will:
o Improve incentives for production of maize to supply wider market
o Increase supplies of maize in Malawi’s markets, reducing price swings
o Opening Malawi markets to regional suppliers and buyers strengthens them
o Enabling more Malawians to more confidently plan on using market supplies to
meet their food needs, rather than relying on subsistence farming
22

23. ADMARC – how useful for food security in Malawi?
▪ ADMARC set up in 1971 to manage marketing of crops
produced by smallholders, as were marketing boards
established in colonial period
o Colonial administrator Kettlewell noted that:
if marketing were left to private enterprise … [t]he fluctuations
of price inherent in such a system would bewilder and
discourage the inexperienced farmer
o This protective and patronizing view of government’s
role in smallholder marketing remains in policy debates
o Both Malawian politicians and press regularly demonize private
maize traders as self-serving hoarders out to cheat farmers
and consumers
o ADMARC seen as the antidote to such rapaciousness and
the undermining of Malawi’s food security that traders
supposedly cause
23
Location of
ADMARC
depots

24. ADMARC – not useful for Malawi’s food security
24
▪ ADMARC scope of operation now is only in maize marketing
o Principal role for government is maize price stabilization
o With its pricing, ADMARC is to defend a price floor to benefit maize producers
and a price ceiling to safeguard consumer access to maize
o Government provides financial support to enable ADMARC to remain in business
at those price levels
▪ Arrangement has not worked, being costly and ineffective
o Government slow in releasing funds; ADMARC also delays buying maize to
allow it to dry more after harvest to reduce losses in storage
o Results in ADMARC buying very little of producers’ maize and, hence, having
limited maize to sell to consumers in lean season before the next harvest
o Despite being ineffective, its efforts result in large costs for taxpayers
o In 2018, for example, ADMARC received a government bailout of MK 45 billion
(about 1 percent of Malawi’s GDP) that was not budgeted for

25. ADMARC – not useful for market development
▪ ADMARC limits private sector engagement in maize marketing in
Malawi, exacerbating weaknesses in those markets
o Its mandate, but general inability, to defend the maize price band adds
uncertainty to the market
o Adversely affects all concerned – maize producers, traders, and consumers
o Government support to ADMARC serves as a barrier to private firms that
potentially could effectively compete with ADMARC
o Likely, many such firms could manage at lower risk and at lower public cost
the functions ADMARC has been set up to undertake
▪ Yes, traders are self-interested – as are farmers and consumers.
o In pursuing that self-interest, they help assure household food security
o If traders can effectively serve producers and consumers, many households
could stop their subsistence farming and engage in more profitable livelihoods
▪ With stronger markets, ADMARC will be an unneeded feature in
Malawi’s food systems
25

26. Final points
▪ Book supplies a comprehensive contextual understanding of what drives
the pattern of recurrent acute food insecurity in Malawi
▪ Solutions found in:
o More productive, more specialized, and more commercially oriented
smallholder dominated farming sector
o Stronger markets that operate predictably to the benefit of producers,
consumers, and traders, facilitating reliable access to food for all Malawians
o Without reliable markets, subsistence farming will remain a necessary livelihood
strategy for many poor households, and few will see their welfare improve
o Increasing opportunities for Malawians to obtain their livelihoods and to
unfailingly meet their food needs through work outside of farming
o As part of moving towards a structural transformation of Malawi’s economy
o In this, most of the perspectives promoted in the book to enable Malawi to be food
secure are consistent with the pillars of the Malawi 2063 vision document
26

27. Thanks for your interest,
comments, and criticisms!
▪ Book is freely available for
download online at
http://www.ifpri.org/publication/
disentangling-food-security-
subsistence-agriculture-malawi
▪ Contact author at
t.benson@cgiar.org