Over the past thirty years, households in Malawi have been exposed to a large number of shocks that have led to an ongoing decline of rural livelihoods. More than 60% of the population is experiencing chronic poverty every year and it has some of the worst child malnutrition and mortality rates in Africa. The highest concentration of poverty is in southern region of the country where 68.1% of households are poor, compared to the central region with 62.8% and the north with 62.5%. The current level of poverty is characterized by deep inequality. The richest 20% of the population in Malawi consumes nearly half of all goods and services, whereas the poorest 20% consume only 6.3%.
Livelihood deterioration in Malawi has been due to a wide array of political, economic and social changes and population pressures that have impacted households and communities through time. Overlaying all these factors has been the HIV/AIDS pandemic, affecting more than 20% of the population and contributing to a further decline in rural livelihoods.
The Colonial Period (Prior to 1964)
During the 19th century, a number of historical processes led to the transformation of Central Africa from a prosperous region to one characterized by lack of security and disintegration of existing agricultural systems. These processes include 'fallout' from the Zulu expansion, slave, ivory and cattle raiding, disease, pests, drought (in 1903, 1922 and 1949), and interventions to increase the labor supply.
The concept of land ownership, introduced during colonial rule and perpetuated through Banda's regime, worked to erode the traditional community power structures that made decisions about land use. Although traditional power structures contained dimensions of inequality, some observers assert that the environmental degradation in Malawi is partially due to the breakdown of traditional structures that managed these resources through community-based processes.
By the 1950s, a tripartite economy developed such that:
- Estates in the central and southern region of Malawi (owned by whites) produced tea and tobacco. These estates employed wage laborers as well as 'visiting tenants'.
- A large migrant workforce that left for South Africa and Rhodesia on a yearly basis. Differentiation of smallholders developed in the 1950s since migrants returning from South Africa and Rhodesia were economically better off.
- Smallholders growing maize and other crops on small holdings.
1964-1980: Estate-Sector Biases Under the Banda Regime
By 1968, government policy favored estates with preferential access to extension services, credit and markets - primarily for the most lucrative crop, burley tobacco. Customary land holdings managed by smallholders were converted into leasehold land for estates to expand tobacco production. This led to the emergence of a poor landless tenant class and reduction in available land for smallholder cultivation.
Although the Malawi economy performed well between the years of 1970-1977, the dual nature of the economy essentially meant that estate performance was masking the poverty and degradation of smallholders. Population was continuing to increase and land fragmentation was continuing to occur. In general, households were becoming poorer due to this bias towards the estate sector and livelihood systems were beginning to deteriorate because of agricultural and marketing policy biases.
In the late 1970s, the economy of Malawi began to decline due to rising oil prices, a war in Mozambique and unfavorable weather patterns. The war in Mozambique had two main impacts on the Malawian economy: 1) the large influx of refugees (especially in the Southern region); and 2) blockage of Malawian exports due to inaccessibility to ports on Mozambique's coast. These impacts, coupled with rising debts, meant that the Malawian government was spending nearly 23% of income earned from exports on debt reduction. Price controls and massive direct government investments in agriculture led to policy distortions and exacerbated basic structural weaknesses.
1981-1990: The First Structural Adjustments
The call for a structural adjustment program (SAP), was in response to the deterioration of the Malawi economy due to sharp increases in import prices, severe droughts and rising transportation costs from the disruption of rail lines to the sea from Mozambique due to the war. Despite these efforts, the overall the performance of the economy in terms of expansion and national income worsened during the adjustment period.
Although the SAPs placed strong emphasis upon improving producer prices for smallholders, these policies placed less emphasis on addressing production constraints and non-economic barriers to income growth. All efforts for increasing food security through the SAPs focused on promoting increased production of maize at the expense of other crops. The adoption of semi-flint maize hybrids over local varieties in the early 1990s reflected a concerted effort by the government and donors to promote the development and spread of hybrid maize through subsidies and credit.
Wages for agricultural laborers continued to decrease as a result of the Government's Wage Restraint Policy. Between 1982 and 1990, the rural minimum wage was cut in half relative to the consumer price of maize. Migration to South Africa for wage employment dropped during the late 1980s, the result of restrictions on migrant labor.
By 1987, an estimated 48% of land in Malawi was under cultivation, a percentage that exceeds the amount of available land suitable for rain-fed cultivation under traditional management practices. Nearly half of Malawi's maize is grown in the central region, however the most food insecure region in Malawi is in the southern region where two-thirds of Malawi's poor households live (Devereux 1997). By 1988, 56% of the rural households farmed less than one hectare of land and 80% farmed less than 1.5 hectares.
The combination of rising prices, reduced access to land, unfavorable terms of trade for smallholders and wage restrictions essentially made livelihood security more difficult for the poor. Between 1986 and 1990 the poorest households experienced a decrease in their income from crop sales and were required to pursue casual labor more often to compensate. Better off households increased their total income from tobacco and increased their share of maize sales. As a result, inequality among smallholder households was starting to increase.
1990-1991: A Shift to Smallholder Tobacco Production
In 1990, the bias of the World Bank and IMF towards the estate sector was reversed.
During this time there was also a change in the government's burley tobacco production policy to allow for cultivation by smallholders. Burley tobacco production by smallholders was viewed as a positive step for a number of reasons, including increased income and marketing opportunities. Potential negative impacts of increased burley tobacco production included soil erosion from increased hillside cultivation and excessive reliance on a single crop in an uncertain world market.
Tobacco liberalization also resulted in greater demand for ganyu from larger smallholders. These labor demands created time constraints for poorer households to grow burley, especially for those who did not have access to credit.
Despite the attempts to identify new drivers for poverty alleviation (e.g. burley tobacco production), livelihood insecurity was increasing for many of the poor due to on-going slow onset processes, such as population increases (3.3% per year) and resulting declines in landholdings and soil fertility as well as policy biases that favored the better off rural producers.
1991-1993: The Southern Africa Drought and Its Impact
In 1992-93 a major drought hit southern Africa. Maize production was reduced by more than 46% in Malawi. This 1992 food shortage was exacerbated by the influx of one million refugees from Mozambique into Malawi. Approximately two-thirds of the entire population registered for food assistance. In addition to the food aid that was provided, free maize seed and fertilizer was distributed to 1.3 million smallholders as part of the Drought Recovery Inputs Project (DRIP).
The drought created major problems for the credit market. SACA experienced severe loan recovery problems due to the collapse of maize production. The loan defaults resulted in a number of small holders being excluded from future credit programs. For example, in 1992 there were 400,000 smallholder borrowers participating in SACA. This dropped to 34,000 in 1994 and eventually forced the closure of SACA that year.
Food expenditures as a proportion of total household expenditures increased from 40%-60% to 70-90%. The drought exacerbated and accelerated the poverty processes that were already taking place in rural communities throughout Malawi. The drought essentially created the situation where debt became unmanageable, leading to the loss of future credit for a large number of smallholders. This was coupled with asset depletion, making households more vulnerable to future shocks. Human capital investments were also seriously jeopardized because resources were no longer available to households to retain children in school or to pay for medical care.
1994- 1998: Transition to Democracy and Smallholder Liberalization
Malawi's first multi-party elections were held in 1994, leading to the end of thirty years of authoritarian, single-party rule and inaugurating a new democratic government. However, the growing number of institutions and departments developed after the Banda regime led to increased opportunities for corruption. Government aims to mediate previous imbalances were often derailed by factionalism, ethnic rivalry and regional pressures.
Although the structural adjustments began in Malawi in the 1980s, the 1990s saw an acceleration of processes begun earlier, such as devaluation, large maize price rises and rapid input price rises. Many villagers felt that when subsidies were dropped in 1994-95, this was a major factor contributing to their food insecurity. This, coupled with the collapse of SACA in 1994, also led to limited access to credit. Thus the liberalization of tobacco production was not the solution to poverty and food insecurity as was hoped. Only the larger farmers benefited disproportionately, with poor and female headed households the least likely to participate in tobacco farming. Economic stratification of rural communities began to accelerate in 1995.
Due to market liberalization, droughts and political upheaval, most Malawian households were forced to diversify their income sources to cope with volatile conditions. Smallholders favored crop diversity niches that did not interfere with household food production, and about one-third of households in Malawi were involved in micro enterprises, with about two-thirds of these being women. Ganyu labor was one of the main strategies that the poor used to meet consumption needs. However, it created negative consequences, such as reduced yields on the laborer's own farm due to time spent searching for work and laboring for others. Low livestock ownership by Malawians (due to theft and lack of suitable grazing land) reduced the flexibility of rural livelihoods to manage risk and to accumulate assets as a path out of poverty.
During the mid-1990s, there were three broad positions taken by government, donors and NGOs and UN agencies with regards to how to tackle food insecurity. The government's use of subsidized inputs (e.g. Supplementary Inputs Project) was not sustainable and did not take into consideration the collapse of credit schemes. Market liberalization approaches favored by donors actually accelerated the processes of rural economic differentiation and threatened the food security of the poor due to higher food prices. The safety nets approach utilized by NGOs and UN only treated the symptoms of food and livelihood insecurity. Programs investing in human capital were minimal, such as training for skill enhancement and off-farm employment. Positively, programs such as the Malawi Social Action Fund (MASAF) provided public works-based FFW programs, although participation by women and some vulnerable groups was limited.
1998- 2000: Chronic Poverty and Food Insecurity
In 1998, the Malawian government laid out a decentralization plan in the Local Government Act of 1998. Some observers felt that these decentralization processes were likely to make matters worse on the poor through increased formal and informal taxes and levies and various other hidden payments and restrictions due to institutional blockage.
The devaluation of the Kwacha by 62% in August 1998 caused a significant shock for Malawians and forced the prices of most basic commodities to double. This devaluation imposed heavy pressure on informal safety nets, with more people requesting assistance (e.g. cash, loans and food) and less people able to meet these requests. The government tried to intervene by compensating for the devaluation of the Kwacha through limiting maize price rises. Fiscal policy in Malawi has been a continuing problem in the late 1990s.
In a study that was carried out in 1998, 65% of Malawians lived below the poverty line and were considered chronically food insecure, with the majority of these poor living in the Southern and Central Regions of the country. Based on a participatory livelihood assessment that was carried out by CARE in the Central Region in 1998, the poorest households earned less that 1,000 kwacha per year, could not afford inputs, were not educated, had trouble getting access to seed, had no animals, had no dimba gardens, either were landless or functionally landless (had 0.5 to 1.0 acres of land) and relied upon ganyu labor and firewood sales.
Urbanization was increasing dramatically during the 1990s. The Malawi Population and Housing Census conducted in 1998 found that urbanization increased from 850,000 in 1987 to 1.4 million in 1998, an increase of 68%. A number of individuals are moving into urban centers because of the difficulty of securing livelihoods in rural areas.
In 1999, the National Food Reserve Agency (NFRA) was created and was charged with managing the strategic grain reserve previously managed by ADMARC. In July 2000, the IMF advised the NFRA to sell of some of the grain reserve to pay off debt.
In July 2000, there were signs that corruption was increasing. A report was produced by the Public Account Committee on the extent of government corruption and fraud. The report led to a souring of donor relationships with the government.
Starter Packs (consisting of hybrid seed and fertilizer) were initiated in 1998 by the Government of Malawi with support from DFID to compensate for higher input prices, targeting 2.5 million households in 1998-99 and 1999-2000 and were provided fertilizer and hybrid maize seed. The program was scaled back to one million beneficiaries in 2001 with the TIPS program (Targeted Inputs Program). The main problem with this scaled back program was with targeting. Many of the poorest households were excluded.
2001- Present: The Current Food Crisis
The increasing vulnerability to food shortages in Malawi that occurred throughout the 1990s left people extremely susceptible to future shocks. Two sets of factors came together in producing the food crisis of 2002: livelihood vulnerability and weak government institutions.
The shocks that hit Malawi from 2001 to the present were a combination of weather-induced shocks and socio-political shocks. Chronic poverty due to falling terms of trade, the lack of off-farm employment opportunities, diminished access to land, declining soil fertility and falling applications of agricultural inputs all created food access problems. In addition, the HIV/AIDS pandemic was decimating the labor force and raising household dependency rations. These poverty processes were combined with government policies that did not favor smallholder agriculture. These factors that influenced people's access to food, coupled with low availability of maize in the market, pushed Malawi over the edge.
The Government of Malawi had inadequate grain reserves to respond to the growing crisis because they had sold off a large portion of the reserve in 2001. Much of this stock was purchased by private traders who profiteered from the sale of the grain reserve by buying the maize cheaply and then hoarding it until the prices rose and resold it back to ADMARC. The magnitude of this food short-fall was further exacerbated by the underestimation of roots and tuber production, which the government and donors first believed would cover household maize deficits.
In October 2002, people with livestock began selling them to purchase food. In a study that was carried out by CARE and SCF-US in four districts in the Central Region of Malawi in May 2002, two-thirds of all households indicated a decline in income. Terms of trade fell to one-third of their value. Asset sales decreased dramatically, school drop out rates increased by 25%, people started to migrate and informal safety nets began to collapse.
Donors were slow to respond to the food shortage for a number of reasons. First, the donor/government relationship was strained due to questions regarding corruptions and mismanagement at exactly at the same time when resources were needed. Second, donors assumed that the initial reports were correct that there would be enough available food and that they did not need to respond with emergency resources. It was only after the media started to report food shortages and deaths that donors reversed their hard line and offered food unconditionally.
Although a number of safety nets have been implemented by the government, donors, UN agencies and NGOs, such interventions still primarily focus on addressing the symptoms of food insecurity through food aid and free or subsidized inputs for agricultural production. Safety net programs have not been designed to address long-term food insecurity, such as investment in human capital to generate off-farm employment opportunities. The crisis presents an opportunity for donors and the government alike, to break the cycle of chronic poverty through such human capital investments.
Cross-Cutting Themes
HIV/AIDS
In 2001, CARE Malawi conducted a study in fifteen villages across the three districts of central Malawi - Lilongwe, Dowa and Dedza on the impact of HIV/AIDS on agricultural production and livelihoods in central Malawi. The study found more than 22% of households in the villages studied are affected by HIV/AIDS morbidity and mortality with the most direct impact being loss of labor. Three of the villages in the study had half or more of their households affected by chronic sicknesses in the past five years (two in Lilongwe district and one in Dowa district). In instances where landholdings are transferred to relatives temporarily, the ability to regain control of the land may be difficult and result in conflict between family members. Families will often times rely upon ganyu labor in order to meet short-term cash needs.
Forty-percent of surveyed households affected by chronic illness sold a portion of their assets in order to buy food or to pay medical or funeral expenses. Some farmers used standing crops (such as tobacco) as collateral for cash loans in order to meet immediate needs of the household. Families have also experienced decreased access to credit due to HIV/AIDS: Community-based credit groups will sometimes exclude families because they may perceive these households as high risk.
Women are especially burdened by HIV/AIDS since they often are the ones who care for sick household members. They represent 55% of all current infections, the result of increased susceptibility due to physiological factors, as well as cultural practices such as early marriage, and economic conditions that force women to engage in sexual activity in exchange for food or other essential items.
Assistance by extended family networks is a crucial source of support for households and has been instrumental in helping families cope with the impact of HIV/AIDS. However these networks are under a great deal of strain due to the number of individuals needing assistance.
Gender
Thirty percent of smallholder households in Malawi are female-headed. Forty-one percent of rural households are food insecure and 40% of these are female-headed. Female-headed households are particularly labor constrained and unable to take advantage of off-farm employment. Some of the general findings regarding women in Malawi are the following:
- Fewer female-headed households report any improvement in economic conditions compared to male-headed households.
- About 70% of all full time farm workers in the smallholder sub-sector are women.
- Gender differences in decision-making, asset ownership, and inheritance depend upon the systems of social organization of specific ethnic groups; matrilineal mainly in the central and southern portion of the country, and patrilineal in the northern and southern portion of the country. However due to increased chronic food insecurity among the poorest households and the impact of HIV/AIDS, these systems of social organization are beginning to change.
Right to Food
The current crisis in Malawi is due to the intersection between vulnerable livelihoods and weak institutions. It is apparent from the review that a number of steps have been taken by the government that favored national food security over poor people's household food security. In the more recent past, several actions were taken that had negative consequences for the chronically poor. Government mismanagement of information regarding maize marketing allowed private traders to manipulate the market such that major price increases disproportionately penalized the poor. The market short-fall created by hoarding by traders led to price increases. Maize prices were so high that many poor people were unable to afford purchasing maize. This is clearly a violation to the right to food for the majority of Malawians.
Hypothesis and Recommendations for Future Research
Over the past thirty years, households in Malawi have been exposed to a large number of shocks that have led to an ongoing decline of rural livelihoods. Based on this review, a number of hypotheses have been generated that explain why food insecurity has continued through time in Malawi. The following hypotheses are listed below:
- Market liberalization had a differential impact on smallholders, with the poorest households becoming poorer and better off households being able to capture market benefits. Rural stratification became more severe in the 1980s and has accelerated since 1994. Women have become disproportionately worse off.
- Government policy and implementation, particularly over the last decade, has increased rather than ameliorated differentiation, both because policy has tended to favors better off farmers, and because of the weak capacities and corruption entailed in the implementation of policy. Decentralization will only exacerbate these trends.
- The 1992/93 drought led to major loan defaulting, limiting credit options for many smallholders from this date forward. This led to limited access to inputs and therefore significant reductions in maize yields. Drought increased the future vulnerability of rural populations.
- Beginning in 1998, the transition from parastatal marketing structures to liberalized markets left a vacuum in terms of institutions responsible for maintaining safety nets. The capacity of institutions replacing ADMARC (the National Food Reserve Agency) was limited. The crisis that began in 2001/02 was an institutional shock combined with livelihood vulnerability (exacerbated livelihood insecurity), rather than a weather induced shock.
- Informal safety nets are becoming weaker, under the stress of increased asset decline, and the additional pressures of the impact of HIV/AIDS. Formal safety net strategies that are more than just hand out mechanisms, have yet to be developed.
- Rural households have resorted increasingly to off-farm income sources, including ganyu, as well as to rural-urban migration for survival. Public sector investments in non-farm activities and infrastructure will benefit smallholders more than investments in agriculture. Certain regions may be more amenable to quick returns to non-farm investment.
Based on this analysis, there are still a number of issues that need to be clarified in follow-up research. These information gaps are listed below:
- What is the relationship between rural traders, prices and differentiation of rural market infrastructure?
- What role has cross-border trade and linkages with Mozambique had in allowing for border communities to adapt to the current crisis?
- What has been the impact on ganyu labor prices, given that such a large number of people (both the poor and the middle level households) are seeking such employment?
- What are examples of successful skill-building programs that have enabled households to find non-farm employment. Can these serve as a model that can be scaled-up for the country?
- What is the impact of HIV/AIDS on the structure of labor for smallholder households?
- Does ADMARC have a role to play as a food security institution, given the weak capacity of the National Grain Reserve Agency?
- Are informal safety nets getting weaker, or are there variations of this in different parts of the country?
- How significant has urbanization become as a response to the crises?
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