Agricultural commercialization, rural economy and household livlihoods 1990-1997 [ in Malawi]

This paper details the processes of agricultural commercialisation, income strategies and food security among smallholder families in the Zomba district of Southern Malawi over a period between 1986 and 1997. It presents data and a discussion of key changes and continuities observed in the study area over this period as they impact upon families across the economic spectrum.Some of the papers key findings include:Household income per capita in the sample as a whole has improved over the period of ten years (1986-1997), but the greatest benefits have gone to the better-off households. Some hope is seen in the positive gains even for the bottom income quartile in the more recent period 1990-1997.Changes in income sources showed up two clear trends. Households in the top income quartile have increased the proportion of their income earned from agricultural sales relative to "off-farm" sources, while those in the bottom quartile have made a reverse shift.Diversification is a key feature of both income strategies and agricultural production and is the way in which rural families deal with the unpredictable risks entailed in rain-fed agriculture. The interdependence between farm and non-farm based activities is great but not a static picture. Given the trajectory of population growth and the decreasing land available, the importance of non-farm income can only increase over time.Although maize production accounts for over 80% of land under cultivation most families intercrop with other food and non-food crops and use crop sequencing to great effect. Constraints of land and access to inputs as well as peak season labour shortages mean that increases in crop prices tend to fuel changes in the crops produced rather than increased output. Hence increasing the volume of production cannot be achieved solely through market manipulation.Programmes of free, subsidised or targeted inputs definitely result in an increase in the numbers of people growing hybrid maize and, in particular, the numbers of the poorer fifty percent of households who do so. Also the expenditure patterns of households suggest that people, on average, are also putting more emphasis on obtaining fertiliser and other agricultural inputs. However since the removal of subsidies in 1995 the increase in fertiliser costs has meant that they obtain less than they used to and would like. There has been an expansion in the degree of labour hiring (which is almost entirely from neighbours) among a broader section of the population predominantly linked to the increase in burley production. This increase is concentrated among the better-off households.The most striking change in the villages in southern Zomba has been the huge increase in numbers of people growing – and trade in - burley tobacco demonstrated by the fact that income from burley growing is the single most significant discriminating factor among sample households. This has been facilitated by the widespread creation of ‘burley clubs’. There is no significant difference in current data to suggest that poorer households who grow tobacco consistently have lower maize harvests on average than those who do not (or, indeed, the reverse) and there is some evidence that the revenues from production are filtering into the wider community. However there is an urgent need to increase and improve extension work to prevent bad practice which might become damaging in the future.Maize remains the staple crop and central to household food security. HoweverPrice instability over the past decade resulting from a combination of climatic and policy shifts has only reinforced the attempt by people to retain as much of their staple crops as they can. Few are self sufficient in maize production and the proportion of income spent on staple crops has risen overall due to increased prices which have not been matched by more recent increases in work opportunities. Local maize varieties are preferred over hybrids due, principally, to their better storage characteristics and the perception that hybrids are more expensive and time consuming to cultivate and store. However early maturing hybrids are attractive particularly to poor households who cannot produce enough to last them through the year.Market liberalisation measures taken from 1987 onwards appear to have had largely positive results for maize sellers, in increasing the number of outlets for their sales, but to have had mixed to negative effects on the ability of households to purchase maize in the deficit season.Although some liberalisation measures have directly affected ADMARC, and have led to frequent liquidity crises and its running short of cash to purchase crops, it continues to be a key actor in maize buying and it has a strong influence on the prices offered to sellers. Despite the proliferation of private traders ADMARC remains the only agent able to provide the high volume needed to meet demand in the deficit season.A broader process identified in the study is the growth in trading centres and increased economic activity due to policy changes, urban and peri-urban population growth, the increase in educated young people entering the trade professions and the increasing need for rural-based people to find ways of making cash. This is leading to increased competition over resources which requires urgent policy attention.Peters argues strongly against the supposition that the poorest families operate outside the market and that as such market liberalisation has had no impact on the poorest. She details three observations to back up her case:The proportion of households in each income decile selling maize is higher in the bottom decile than the middle deciles. However as sellers, they sell early in the season when the prices are at their lowest, and as buyers, they buy in the deficit season in local markets or villages when prices are highest.None of even the poorest families and individuals work only for food; all also work for money. All rural Malawians live in a highly commercialised economy where cash is needed for a wide range of goods and services.Thirdly, to assume that "barter" or exchange in kind is separate from markets is incorrect as conversion rates between goods, services and money are determined by the prevailing structures of prices in local areas.Finally the paper addresses the issue of whether the trend for increased cassava production could or should herald a change in staple crop from maize to cassava. The paper dismisses the view that such a move is desirable or likely and attributes the increase in production to a growing demand among the increasing urban and peri-urban population.[Annexes to the paper detail sample design and methods and provide a snapshot of village life in the communities studied.]