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Abstract:
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Since 1981 Malawi has implemented several economic policy reforms under the structural adjustment programmes. Most of the policies targeted the agricultural sector including deregulation of agricultural marketing activities, removal of fertilizer subsidies, devaluation of currency, liberalisation of agricultural prices and liberalisation of special crop production. The liberalisation of agricultural marketing was expected to provide incentives for the participation of the private sector, with consequences of competitive marketing benefiting smallholder farmers through better marketing arrangements and higher prices. However, the evidence from rural Malawi does suggest that smallholder farmers, particularly the poor, have been the main losers through unfair trading practices and monopsony power of private traders, and lack of reliable markets for agricultural produce and inputs.
This study analyses the likely effects of closing the agricultural marketing board, ADMARC, markets in the rural areas using ex ante analysis encapsulated in the Poverty and Social Impact Analysis
The authors recommend that if the Malawian government is to proceed with the privatisation of ADMARC or closure of remote markets, it is necessary to condition such a process on the development of infrastructure and appropriate institutions to facilitate competitive private sector activities and increase in the bargaining power of smallholder farmers. |