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Agriculture plays an overwhelmingly important role in Malawi's economy. However, food insecurity problems are exacerbated by the widely changeable food prices particularly since the liberalisation of agricultural produce marketing and the removal of price controls on maize.
This paper points out that the development of infrastructure in Malawi, particularly in rural areas is far from being optimal. Furthermore, product markets and input markets for agricultural growth are not functioning.
Beside the primary challenge of ensuring that there is an adequate national food balance and the question about the change in the food basket in Malawi, the major challenges found in the paper are as follows:
- how to coordinate the complementary services for the promotion of agricultural growth in a liberalised market in which most markets are still thin and working imperfectly
- how to develop the private sector and to ensure that it operates efficiently
- how to achieve scale in the product markets for export crops and the role of the state in the market
- how to restore agricultural credit given the past repayment problems
In terms of smallholder development in Malawi, coordination activities are required. Categories of required coordination include vertical coordination along the supply chain, horizontal coordination (affecting units in the same category), and complementary coordination. The last one arises where there are economies of scope for particular organisations to provide a number of different services to farmers.
Moreover, the author deems that IRDP-ADMARC (a model that existed in the mid-1980s) can provide some solutions to fundamental problems which have not been yet provided under liberalised markets. Nevertheless, new policies and institutions which respond to the fundamental challenges are required. |
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