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Abstract:
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This report assesses a number of potential agricultural alternatives to production and export marketing of tobacco from Malawi. It provides analysis and findings on current profitability of alternatives as well as potentials for employment and export earnings, as compared with tobacco. The social needs of employing a large number of workers currently engaged in tobacco production and the country’s need for export earnings are thus taken into account.
The report is intended to contribute to the long-term process of diversification and clarify options. It includes recommendations made by an Expert Workshop held in Blantyre, Malawi (21-22 July 1999) addressed to the private and public sectors on further action on production and export marketing of new agricultural products that have high developmental and export potentials.
Gross margin analysis and Domestic Resource Cost ratios (DRC) were used as methods to identify potential alternative commodities to tobacco and study observes that:
- although previous studies spanned different time periods and differed on scope of commodity coverage, their conclusions were similar
- Malawi should diversify out of tobacco and concentrate on commodities, which are of high value, but less bulky, such as spices, oil seeds, some horticultural crops, cotton, pulses and mushrooms
- although there was convergence of findings to previous studies, changes that occurred later in the terms of trade following market liberalisation altered the comparative advantage and priority among them. |