1 INAUGURAL ECAMA RESEARCH SYMPOSIUM, 8 – 10 OCTOBER 2014, LILONGWE, MALAWI STRATEGIC OPTIONS FOR AGRICULTURE AND DEVELOPMENT IN MALAWI Andrew Dorward & Ephraim Chirwa, School of Oriental and African Studies, University of London Wadonda Consult W ACOL
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Strategic Options for agriculture and development in Malawi by Andrew Dorward
This paper considers potential strategic options for agriculture and development in Malawi in the context of the country’s current situation and the prospects the country faces. After briefly reviewing current national and sectoral policy and potential roles of agriculture in economic growth, we set out the current situation in order to consider strengths, weaknesses, opportunities and threats. We conclude that a major emphasis is needed on supporting changes that reduce the rate of population growth and promote capacity for adaptation and resilience to climate change. Rapid increases in the productivity of agricultural land and labor and rural incomes will be critical to this (alongside increased education and empowerment of girls and women). There are, however, difficult potential trade-offs to negotiate (for example between increased irrigation and reduced inflows into Lake Malawi) and these need further consideration. From this analysis we derive a set of nine strategic principles and two operational principles that we suggest could helpfully stimulate and guide strategy development that addresses the opportunities and threats facing Malawian agriculture. The application of these principles is illustrated by indicative consideration of policy and investment options focusing on development of different commodities and (broadly defined) resources. Consistent implementation of coordinated and consistent sectoral and inter-sectoral policies is critical for achievement of the desired growth and diversification impacts.
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Green Belt Irrigation & Water Development. Challenge of over dependence on rain-fed farming with
limited irrigation development Increase agricultural (including fisheries) productivity
through irrigation infrastructure development, potential groundwater resources development technical & administrative capacities development rehabilitation of irrigation schemes & dams research in irrigation technology. increase the area under irrigation from 90, 000 to
Development; Sustainable Agricultural Land & Water management.
Key support services: Technology Generation & Dissemination; Institutional Strengthening & Capacity Building
Cross-cutting issues: HIV Prevention & AIDS Impact Mitigation; Gender Equity & Empowerment
5October 2014
ASWApconsistentwith
Four pillars of the Comprehensive African Agriculture Development Programme (CAADP)
basis for & focus of the Malawi CAADP Compact. G8 New Alliance for Agriculture & Food Security
Malawi Government, G8 Development Partners & national & international companies
promotes the development of smallholder farmers’ access to markets.
support implementation of parts of the ASWAp which both involve partnership with the private sector & promote smallholder agricultural development & improved nutrition for the nation
6October 2014
Importanceofsmallholderagricultureineconomicgrowth Strong cross country empirical evidence & theoretical
arguments growth in smallholder agriculture has had major &
dominant impact on growth & poverty reduction in low income countries in the past
smallholder agriculture is not always the best or only basis for broad based or inclusive & poverty reducing growth,
its effectiveness depends upon both context & the effectiveness of policy in stimulating agricultural as compared with other types of growth
Particularly important & effective where large numbers of (particularly poor) people & large amounts of land & capital are involved in their production.
Double benefit for ‘deficit food producers’ from staple food crop productivity increases, as both producers & consumers.
7October 2014
Rolesofsmallholderagricultureineconomicgrowth Driving growth (fundamental increases in productivity &
earnings) Growth in production of tradables (imported or
exported commodities) raises incomes of domestic producers.
increased production of non-tradable or semi-tradable staple foods important in people’s expenditure (with high average budget shares) through increases in consumer incomes (reduced prices & expenditure release funds for other expenditures)
Supporting growth processes (multiplying & spreading the benefits of primary growth drivers through an economy
releasing resources for other productive resources to respond to increased demand
8October 2014
Furthersmallholderstaplecropgrowthbenefits
High growth linkages or multipliers (income gains circulate in local economy)
tend to be high because consumption patterns of the rural poor have a high non-tradable content
Further benefits from low & stable food prices: increased real incomes for large numbers of
producers and/or consumers. stimulate demand for non-staple & non-farm products resources for investment in supply to meet demand allow shift out of low return food production (a ‘lock-in’
to subsistence production if high & variable food prices) into high return non-staple /non-farm activities.
environmental benefits if reduced cultivation pressures on marginal or forested lands, &/or improved soil management (with reduced run-off, & soil erosion).
9October 2014
Rolesofsmallholderagriculture:context
Countries with well managed minerals: High response potential staples critical to supporting
critical for supporting (spreading) growth Land locked countries without minerals:
High response potential staples critical to driving growth
Traditional / non-traditional exports can also drive growth if widespread production
Domestically consumed horticulture & livestock critical for supporting (spreading) growth
10October 2014
Povertyreducingagriculturegrowth
Raises both labour & land productivity, Raises land productivity more than labour productivity
pushes up wages for unskilled labour.
Important implications for policy (eg mechanisation & herbicide use)
increased labour productivity & drudgery reduction must not lead to unemployment of the poor &
vulnerable without safety nets to support them. labour intensive organic manures will not address
poverty if they do not raise labour productivity as well as yields.
difficult trade-offs change over time & vary with specific farming systems & technologies.
11October 2014
Currentsituation
Rapid increases in population, large proportion under 15 High (slowly declining) proportion in rural areas Falling per capita land availability Conflicting poverty information (falling or roughly constant
incidence), increasing numbers of poor & inequality Dramatic falls in the under-five mortality rate, rising life
expectancy, falling but still high HIV prevalence High but falling rates of stunting Variable national maize production surpluses (increasing
nominal & real maize prices (high inter- & intra- season year variability), major food security problems.
Low GNI per capita with highly variable annual GDP growth, on average only a little above population growth
12October 2014
Currentsituation(2)
High variation in macroeconomic performance, periodic high inflation & nominal interest rates, major devaluations
Constraints & challenges on government expenditure & on the economy as a whole, high dependence on grants,
Persistent balance of payments deficits, imports growing more than exports, large fuel & fertiliser import costs
High roughly constant proportional agriculture contribution to GDP, very high share of exports, high fertiliser imports
High value share of tobacco exports, but major price & volume fluctuations. Smaller values for tea, sugar, cotton, nuts, & coffee also variable (pulses steady increase)
Very small amount of cropland under irrigation, very high proportion of land under maize
Steady decline in fish catches & forest area (apparent recent recovery in fish catches but not in catch per capita)
13October 2014
Strengths Weaknesses/challenges
Variety of different land & soil \types
Relatively favourable rainfall & water sources
Commitment to agriculture within society
Abundance of low cost labour
Agriculture has performed well, but still below potential
Millions Most likely scenarioRapid fertility declineVery rapid fertility declineActual (smoothed)
Threats:Populationgrowth
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1.5xcurrent pop
2xcurrent pop
3xcurrent pop
Current popCurrentpopulation3x1975population
Source: calculated from NSO 2008 census projection
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'000MT Domestic surplus (deficit) before subsidy (MT)Domestic surplus (deficit) with subsidy (MT)Domestic surplus (deficit) without subsidy (MT)Total consumption (MT)Production with subsidy (MT)Production without subsidy
Increase seasonal price fluctuations with post-harvest exports leading to pre-harvest shortages & price increases?
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Threats:Regionalmaizemarkets&prices
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Policyobjectives
MGDS 2: the reduction of poverty “through sustainable economic growth & infrastructure development”
increase agriculture productivity & diversification & ensure sustained availability & accessibility of food to
all Malawians at all times at affordable prices ASWAp objectives
increase agricultural productivity, contribute to agricultural growth, improve food security, diversify food production to improve household
nutrition, & increase agricultural incomes of rural people.
20October 2014
Strategic&operationalpolicyprinciples
1. Sustainable investments & activities: viable & acceptable for all & for as long as necessary
2. Land & wider labour productivity3. Integration of complementary agricultural & non-agricultural
strategies, policies & investment4. Broad based & inclusive growth5. Increased quality & diversity in food production 6. Food access & affordability for all, particularly the poor7. Promotion of sustainable practices with natural resources
accumulation not depletion, despite current & future threats8. Rapid broad based growth to reduce population growth &
support climate change adaptation & resilience9. Agro-processing to promote value addition in local linkages10. Consistent coordinated vision11. Clear priorities & roles