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,

The Politics of Maize in Zambia: Who holds the Keys to Change the Status Quo?

As both the national staple food and primary smallholder crop, maize occupies a central position in Zambia’s agricultural political economy. Despite the government’s large subsidies, maize productivity levels remain way below global averages, maize commercialisation in the smallholder sector remains highly concentrated, maize meal prices are highly volatile, and rural poverty remains high. This study uses a political economy framework to better understand the policy-making process, power structures and dynamics involved in the maize sector in order to get a better understanding of who holds the keys to change, and how to influence agricultural policy changes. Net-Map procedure was used to map the linkages of key players in order to determine critical nodes of policy change. The Executive (Cabinet/State House) was found to wield the most power in commanding the other actors in the sector. However, powerful lobby groups with links to the Executive have often opposed changes to the sector to maintain large rents to their constituency with disregard to the negative effects on the whole sector. In addition, a “Command Triangle” which holds the keys for sustainable policy changes in the maize sector was identified. This command triangle consists of the President, Minister of Finance and Minister of Agriculture. Hence, in order to bring about long-lasting changes to maize marketing policies in Zambia, there is a need for strong collective action within the command triangle, as it possesses the most influence

GUIDE TO PROMOTING PRODUCTIVE POLICY DIALOGUE IN THE AGRICULTURAL SECTOR

The importance of effective and appropriate policies in achieving broader development objectives through agriculture is increasingly being recognized by national governments, development agencies, and supranational institutions. Despite increasing attention to improving the quality of agricultural policy discussions and decision-making, in many ways these efforts are proceeding in the absence of a systematic strategy for how to achieve this. This paper provides a practical guide for applied policy researchers and other stakeholders engaged in agricultural policy reform in developing countries. It draws on a case study from Zambia to provide a set of tools and strategies to improve the effectiveness of policy engagement. This guide consolidates years of practical experiences with agricultural policy dialogue and change garnered primarily through Michigan State University's collaborative research and policy programs in SubSaharan Africa

How Is Multinational Investment in Grain and Oilseed Trading Reshaping the Smallholder Markets in Zambia?

African agrifood systems are being transformed by an influx of multinational capital. Research on this transformation focuses primarily on the rise of supermarkets and demand for African land. An under-appreciated facet of this transformation is multinational investment in African grain trading. This paper uses basic descriptive statistical data and qualitative evidence to examine the implications of the recent multinational investment wave into cereal and oilseed trading in Zambia

Integrating Climate- and Market-Smartness into Strategies for Sustainable Productivity Growth of African Agri-food Systems

To cope with and reverse the worrying trend of widespread soil degradation, declining productivity and increased vulnerability of African food systems to climate change requires a holistic approach to sustainable intensification, which recognizes that action is required within the agricultural sector and beyond. This includes approaches that enable farmers to make long-term soil fertility-augmenting investments and more effective public investments that help farmers identify best practices under the wide range of micro-environments in the region. More broadly, it requires developing policies that make labor and financial markets more flexible and supportive of climate-smart outcomes. This may include: 1) substantially increase investments in public agricultural research and participatory extension services in tandem with efforts to identify more effective modes of implementing such programs; 2) prioritize macro-economic stability, with an emphasis on low inflation and borrowing rates, to enable greater investment in the food system and beyond; 3) transform public subsidies in ways that support the development of markets for organic matter, in particular harvest waste from growing urban areas (e.g., livestock production yards, sawdust mills, waste from retail food markets) as sources of organic compost for farm production; 4) develop policy frameworks to legitimize and strengthen emergent land rental markets; 5) improve labor market flexibility and foreign direct investment policies, coupled with a social safety net fund; and 6) substantially reform staple food market policy in order to create a level playing field for alternative crops and livestock systems. Given the enormity of the challenges facing food systems in the context of rapid population growth and climate change, and the importance of collective action in address them, public sector action and effective use of scarce public expenditures to agriculture will be decisive in achieving sustainable agricultural productivity in the r egion. Once enacted, the proposals made here will take time togenerate their full impacts. That is why there is no time to waste in getting started

Creating Scarcity From Abundance: Bumper Harvests, High Prices, And The Role Of State Interventions In Zambian Maize Markets

From 2010 through 2012 harvest seasons, Zambian farmers produced three consecutive maize bumper harvests. The total maize production during this period was 8.6 million metric tonness, of which 4.6 million metric tonnes was a marketable surplus (CSO/MAL various years). This far exceeded the national maize consumption requirement. In an effort to prevent producer price collapse in the wake of these historic harvests, the Government’s Food Reserve Agency (FRA) was mandated to purchase approximately 80% or 3.7 million metric tonnes of the available surplus

The Rising Class of Emergent Farmers: An Effective Model for Achieving Agricultural Growth and Poverty Reduction in Africa?

The relative importance of small versus large farm enterprises in driving agricultural production growth and poverty reduction is a central development debate in Africa. More broadly this debate revolves around questions of farm land intensification versus extensification as the most effective means for addressing the persistent issues of food insecurity and hunger in Africa. On the one hand, there is a well‐established literature that argues that the intensification of smallholder production is the most effective way of initiating sweeping beneficial changes in predominantly agrarian societies. One the other hand, there is a growing belief that massive constraints in African smallholder production and marketing systems make it improbable for very small farms to be engines of agricultural‐led capital accumulation, land consolation, farm expansion, and significant production gains. For them a strategy that seeks to stimulate large‐scale agriculture can more effective address the constraints to African food production

The Maize Price Spike of 2012/13: Understanding the Paradox of High Prices despite Abundant Supplies

The 2012 harvest was, according to the Ministry of Agriculture and Livestock national food balance sheet estimates, a major surplus production season. However, by November the same year, Zambia started experiencing widespread maize meal shortages and skyrocketing maize meal prices. Responding to these shortages and price spikes, the government increased the price subsidies it provided on maize sold by the parastatal Food Reserve Agency (FRA) to large-scale maize mills and imposed de facto price controls on maize meal by threatening to revoke the business licenses of commercial maize mills if retail prices of a 25kg bag of maize meal exceeded kwacha rebased (KR) 50. Despite these efforts maize meal prices continued to rise, reaching as high as KR100 in some markets by February 2013

Constraints to the Development of Commodity Exchanges in Africa: A Case Study of ZAMACE

The development of agricultural commodity exchanges in Africa has become an increasingly popular strategy for addressing some of the ills plaguing African food markets, including poorly developed risk management systems, high transaction costs, and limited price discovery. However, despite substantial support from donors and, in some cases, national governments, commodity exchanges in most African countries are having difficulties getting off the ground. While previous studies (Rashid, Winter-Nelson, and Garcia 2010) highlight the fact that low trade volumes passing through African commodity exchanges limit their development, the question of why exchanges are thinly traded remains poorly understood. Using the Zambian Agricultural Commodity Exchange (ZAMACE) as a case study, this report identifies and explores six mutually reinforcing factors contributing to low trade volumes passing through ZAMACE. By analyzing why trade volumes and participation on ZAMACE have remained both low and erratic, this report seeks to provide policy makers and donors with greater clarity about the specific impediments to be overcome in developing commodity exchanges in the region