Achieving food security and industrial development in Malawi: Are export restrictions the solution?

Abstract

This document evaluates whether export restrictions support food security and industrial development in Malawi, by examining the pertinent issue of export bans on maize, an existing and longstanding policy in Malawi, and oilseed export levies, a policy under consideration. We use a general equilibrium model calibrated to recent Malawi data to show that while these policies may under certain conditions achieve their respective objectives of increased domestic maize availability (‘food security’) and value-addition in the food processing sector in the short run, they are ineffective and self-defeating in the long run. This buttresses arguments for a more liberal stance towards trade policy in Malawi, which for years has been a leading cause of market uncertainty and consequently agricultural stagnation and the persistence of a subsistence-oriented approach to farming, despite significant government support to the agricultural sector in the form of input subsidies and agro-processing supp ort.