Tobacco and smallholders in Malawi: village case studies in the Mchinji and Mangochi districts

The economy of Malawi is heavily dependent on tobacco. Tobacco makes up the single-largest portion of Malawi&rsquo;s merchandise exports, generating about 45 billion kwacha of export revenue in 2003. From 2000 to 2003, tobacco accounted for 55% of exports in Malawi. The tobacco sector accounts for 13% of Malawi&rsquo;s GDP and 23% of its tax base. The sector is also the second-largest employer of formal employees, after the government, and it is estimated that some 20% of Malawian households rely substantially on income from tobacco production. In addition, tobacco has contributed to the dynamic development of the smallholder sector in Malawi in the past 15 years. This development has been associated with the liberalisation of burley tobacco production for smallholders after 1990. The smallholders, who had previously been banned from burly production, responded massively to the new opportunity, and the number of growers increased. The introduction of stallholder burley production and the resultant development of a dynamic smallholder sector in Malawi have been seen by policy-makers and donors as a key opportunity leading to structural transformation in rural areas characterised by severe poverty and income inequality. <br /><br />Despite the importance of smallholder tobacco production in poverty reduction and rural development in Malawi, there have been few household or community studies in recent years on the role of tobacco production in smallholder households. This paper is a contribution to the filling of this gap. It provides village case studies of smallholder tobacco production in central and southern Malawi. The study is based on a sustainable rural livelihood framework in which people&lsquo;s survival strategies, based on their access to a range of resources, are analysed in a wider historical, institutional, and policy context. Of particular importance to this study are the long-term policy changes in the tobacco sector. Setting such contexts of state policies in historical perspective into the rural livelihood analysis is central to the approach. The paper traces the history of tobacco production in Malawi, with particular focus on government policies on smallholders. <br /><br />The paper finds that:<br /> tobacco production cannot be treated as panacea for the poorest section of the rural population of Malawi the labour and capital-intensive nature of tobacco production prevents households with little labor and capital from engaging in production - additionally, strong food-security concerns force land-scare households to allocate their land to maize the benefits generated by the expansion of tobacco production have been enjoyed mainly by the better-off households and may not be occurring on a sizable scale to the poorer smallholders.<br /> <br /><br />