Farmer organisations and profitability in smallholder tobacco in Malawi
2009
E.W. Chirwa
Do Malawian smallholder farmers benefit from national institutions in terms of profitability of tobacco farming? This study sought to answer this question, analysing the role of farmer organisations in promoting the welfare of smallholder farmers in the tobacco industry. <br />The paper notes that the liberalisation of Malawian tobacco production through the repeal of the Special Crops Act in 1994 has led to the entry of many smallholder farmers into tobacco production. <br />Further findings include:<br /> smallholder farmers currently account for more than 70% of burley tobacco production in Malawi smallholder farmers interact with a number of institutions providing various services to farmers including extension services, credit extension and tobacco marketing yet, some smallholder farmers belong to clubs affiliated to national level institutions and sell tobacco through various marketing institutions gross profits from tobacco are not positively associated with membership to farmer clubs or affiliation institutions however, it is evident that profitability is positively related to productivity, specialisation, the marketing of tobacco to intermediate buyers conversely, the evidence indicates negative relation between profitability and the distance to market.<br />The author concludes that there is a need to re-introduce intermediate buyers and resolve the anti-competitive practices among the few buyers. In addition, reconsideration of the roles of farmer organisations and the decentralisation of tobacco auction markets are required as well. <br /><br />
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