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ArticleJournal articleAchieving food security and industrial development in Malawi: Are export restrictions the solution? 2018
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No results found.Restrictions on staple or cash crop exports are frequently imposed in developing countries to promote food security or industrial development. By diverting production to local markets, these policies tend to reduce prices and increase domestic supply of food or intermediate inputs in the short term, to the benefit of consumers or manufacturers, which make them attractive to policymakers. However, in the long term, export restrictions discourage agricultural production, which may ultimately negate the short-term gains. This study assesses the economy-wide effects of Malawi’s long-term maize export ban, which was only recently lifted, and a proposed oilseed export levy intended to improve food security and support local processing industries, respectively. We find that maize export bans only benefit the urban non-poor, while poor farmers’ incomes and maize consumption levels decline in the longer run. The oilseed export levy also fails to achieve its long run objectives: even when tax revenues are used to further subsidize food processors, their gains in value-addition are outweighed by declining agricultural value-addition. More generally, these results show that while export restrictions may have the desired outcomes in the short run, production responses may render the policies ineffective in the medium to long run. Ultimately, such restrictive policies reinforce a subsistence approach to agriculture, which is inconsistent with the stated economic transformation goals of many Sub-Saharan African countries. -
Book (series)Working paperAchieving food security and industrial development in Malawi: Are export restrictions the solution? 2016
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No results found.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. -
Book (stand-alone)Technical studyAssessing the policy environment for cash crops in Malawi: what could hinder the achievement of the National Export Strategy objectives? 2017
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No results found.This paper examines the main issues affecting producers of export crops in Malawi that could compromise the attainment of the National Export Strategy (NES) 2013-2018 targets. The analysis assesses the level of policy support to the major export crops (cotton, groundnuts, sugar, tea and tobacco) for the period 2005-2013, by calculating the Nominal Rate of Protection (NRP), the Nominal Rate of Assistance (NRA) and the Market Development Gap (MDG) indicators for producers and by analysing public e xpenditure targeting the aforementioned commodities. The results show that trade and market policies resulted in disincentives of -15 percent on average for cash crop producers mainly due to poor infrastructure, lack of competition, weak enforcement and/or inefficiency of producer price policies, and limited budgetary support to cash crops value chain development. The analysis offers further evidence to guide the prioritization of policies and investments in view of fully attaining the NES objec tives, including facilitation of farmers’ access to markets, promotion of a more competitive environment for agri-business, and development of a transparent market information system.
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