The Role of ICT-based Market Information Services in Spatial Food Market Integration: The Case of Malawi Agricultural Commodity Exchange

The government of Malawi in 2004 initiated an ICT-based Malawi Agricultural Commodity Exchange (MACE), a market information service project, to improve access by farmers to market information. MACE was intended to improve the efficiency of agricultural markets as part of the strategy to improve food security. This study uses quantitative methods to examine whether MACE has contributed to efficiency of rice markets in Malawi. It especially tests if MACE has contributed to spatial integration of rice markets. As hypothesized, the study finds that the tendency of rice prices to move together in spatially separated markets has significantly increased since the implementation of MACE. It concludes that ICT-based market information services improve the efficiency with which agricultural markets perform. The study discusses implications of this finding for policy.ICT-based intervention, market information service, market integration, rice, Malawi, Research and Development/Tech Change/Emerging Technologies,

Effects of Nitrogen and Carbon Application on Maize Output in Ntcheu and Dedza Districts of Central Malawi

This paper uses a translog stochastic frontier model to estimate the relationship between maize yield and an interplay of soil carbon, soil nitrogen and inorganic nitrogen fertilizer using plot-level data collected from smallholder farmers in Dedza and Ntcheu Districts of Malawi in 2013/2014 growing season. One of the covariates in the model is nitrogen applied to a plot from inorganic fertilizers. Farmer use of nitrogen is influenced through participation in a non-random targeted Farm Inputs Subsidy Program (FISP) of the Malawi Government. A control function approach is therefore applied to correct for possible endogeneity of participation in the FISP.Results show that inorganic nitrogen fertilizer has significant positive effect on maize output whereas an increase in soil carbon is associated with low maize output but interaction between soil carbon and soil nitrogen as well as with inorganic nitrogen significantly increases maize output. These results seem to be linked to Carbon to Nitrogen (C:N) ratio in the soil. The accumulation of C beyond the optimal C:N ratio is known to reduce rate of decomposition, nutrient cycling, shoot: root ratio and biomass in grasses including maize. Under such circumstances, increasing nitrogen brings the C:N ratio to beneficial levels. The results further show that inorganic nitrogen is a substitute to labour, seed and land. The substitution relationship suggests that improvements in inorganic nitrogen require reduction in labour, seed use and land. It has further been shown that only 45.03% of the plots have marginal value cost ratios of greater than one which shows that considerable number of plots are not profitable. For 66.20% of the plots, applied inorganic nitrogen fertilizer exceeds optimal levels signifying suboptimal use of the input. The results suggest that inorganic nitrogen is profitable at low levels of application which is largely due to prevailing high nitrogen-maize price ratio. The prominent issue for policy consideration from these results is that soils in Malawi are depleted of nitrogen leading to unfavorably high C:N ratios which negatively impact maize production. Given that nitrogen-maize price ratio is already high in Malawi, farmers will need programs that enhance their access to nitrogen fertilizers at low prices for nitrogen fertilizer application to be profitable. Such programs need to be implemented simultaneously with a package of intensification practices that fix and retain nitrogen in the soil. Keywords: Inorganic nitrogen, Soil carbon, Soil nitrogen, Translog stochastic frontier model, Control function approach DOI: 10.7176/JESD/11-2-04 Publication date: January 31st 202

Malawi’s Maize Marketing System

National food security in Malawi depends on improving the performance of maize markets. Ensuring that grain is consistently available at tolerable prices is crucial for consumers’ food security. At the same time, surplus producing farmers need to receive farm-gate prices consistently above production costs to intensify the use of fertilizer and other productivity enhancing technologies in a sustainable manner. These concerns give rise to the classic food price dilemma for policy makers in Malawi: how to keep prices low enough to ensure low income consumers’ access to food while keeping prices high enough to promote farm production incentives. These tensions cannot be avoided but they can be relieved through reducing food marketing margins, which shrink the wedge between producer and consumer prices. Moreover, Malawi faces major political and economic problems associated with food price instability especially given its dependence on rain fed agriculture in a region prone to drought. These issues show that improving the performance of maize markets is at the core of achieving sustainable food security and poverty reduction in Malawi.food security, Malawi, maize, marketing, food policy, Agricultural and Food Policy, Community/Rural/Urban Development, Food Security and Poverty, International Development, Marketing, q12, q18,

What Drives Choice of Coping Strategies Against Ex-Post Weather and Climate Shocks Among Smallholder Fish Farmers in Malawi?

The research was funded by the Aquaculture Centre of Excellence (ACE II) project. Abstract The study was conducted in Dowa and Mchinji districts of central Malawi to understand how fish farmers make choice of village savings and loans, income generating activities and insurance to deal with weather and climate shocks.  A multivariate probit model was used to analyse the drivers of farmers’ choice so that we know if the strategies are complements or substitutes. Data from 353 fish farmers was collected. The study has shown that education level, age of the farmer, farming experience and the hypothetical insurance bid are significant drivers of fish farmers’ choice. We recommend promotion of adult literacy, civic education and enhancement of extension services on the coping strategies as a proxy to formal education which has proved so crucial in the adoption of coping strategies. Keywords: fish farmers, weather and climate shocks, coping strategies, multivariate probit model DOI: 10.7176/JESD/10-4-0

Determinants of adoption of rainwater-harvesting technologies in a rain shadow area of southern Malawi

This paper examines determinants of the adoption of rainwater-harvesting technologies in a rain shadow area of southern Malawi. The most common ex situ technologies in the area were dams, and the widely used in situ technologies were box ridges, contour markers and swales. Adopters treated, on average, 80% of their farms with the rainwater-harvesting technologies, a move that significantly increased their food security status and incomes. The key finding of the study is that the choice of technologies was influenced by land slope and quality, farm size, soil texture, security of land tenure, education level of household head and extension support. The results therefore underscore the potential gains from rainwater-harvesting technologies in improving farmer income and food security, and the need to promote the technologies as a package, because a household may implement different technologies on the same field depending on diverse social, economic, institutional and environmental factors

The Role of ICT-based Market Information Services in Spatial Food Market Integration: The Case of Malawi Agricultural Commodity Exchange

The government of Malawi in 2004 initiated an ICT-based Malawi Agricultural Commodity Exchange (MACE), a market information service project, to improve access by farmers to market information. MACE was intended to improve the efficiency of agricultural markets as part of the strategy to improve food security. This study uses quantitative methods to examine whether MACE has contributed to efficiency of rice markets in Malawi. It especially tests if MACE has contributed to spatial integration of rice markets. As hypothesized, the study finds that the tendency of rice prices to move together in spatially separated markets has significantly increased since the implementation of MACE. It concludes that ICT-based market information services improve the efficiency with which agricultural markets perform. The study discusses implications of this finding for policy

Determinants of adoption of rainwater-harvesting technologies in a rain shadow area of southern Malawi

This paper examines determinants of the adoption of rainwater-harvesting technologies in a rain shadow area of southern Malawi. The most common ex situ technologies in the area were dams, and the widely used in situ technologies were box ridges, contour markers and swales. Adopters treated, on average, 80% of their farms with the rainwater-harvesting technologies, a move that significantly increased their food security status and incomes. The key finding of the study is that the choice of technologies was influenced by land slope and quality, farm size, soil texture, security of land tenure, education level of household head and extension support. The results therefore underscore the potential gains from rainwater-harvesting technologies in improving farmer income and food security, and the need to promote the technologies as a package, because a household may implement different technologies on the same field depending on diverse social, economic, institutional and environmental factors

Analysis of Effectiveness of Modern Information and Communication Technologies on Maize Marketing Efficiency in Selected Markets of Malawi

Developing countries have been promoting initiatives that aim at reducing information asymmetry among market players especially smallholder farmers. Using co-integration error correction models, the study assessed effectiveness of modern Information and Communication Technologies (ICT) based market interventions in improving maize market efficiency in Malawi. Considering that efficient markets are integrated markets when price difference is only a factor of transaction costs, Threshold Autoregressive Error Correction (TAR) model assessed price transmission speed in pre – ICT and post – ICT periods in order to analyse effectiveness of modern ICTs. The spatial integration result shows that markets in Malawi were integrating. The results of TAR models in pre and post ICT periods shows that ICT based market interventions have positively influenced market integration and price transmission. Thus, modern ICTs have contributed to the reduction of search transaction costs leading to improved maize marketing efficiency. Based on the results, the study recommends the need to increase awareness of ICT based market interventions to all gender groups and improve market infrastructure in the country

IMPROVED LEGUME SEED DEMAND SYSTEMS IN CENTRAL MALAWI: WHAT DO FARMERS’ SEED EXPENDITURES SAY ABOUT THEIR PREFERENCES?

The overall objective of this paper is to assess the demand for improved groundnut, bean, and soybean seed in central Malawi. Specifically, it examines how smallholder farmers respond to changes in market prices of improved legume seed. It also assesses factors that affect the decision to participate in improved seed technology transfer. Considering four commodities namely groundnuts, beans, soybeans and maize, a staple food, the paper estimates a multivariate probit and a linear approximate of the Almost Ideal Demand System (LA/AIDS) using cross section data collected by ICRISAT in 2010. Uncompensated price and expenditure elasticities are reported for the LA/AIDS model. The paper finds high own price elasticities in all four commodities considered. It also indicates that land, household size and education levels affect participation in improved technology. Cross elasticities varied across the commodities considered. As pertain expenditure elasticities, farmers would increase expenditure on improved groundnut and beans if their incomes increased. The results also reveal that if farmers’ incomes increase they would reduce soybean’s expenditure share. The results generally show that farmers are very sensitive to changes in improved legume seed prices and incomes