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Abstract
After four decades of agricultural-led development strategies in the postindependent Malawi, economic growth has been erratic and a large proportion of the population live below the poverty line and studies suggests that the poverty situation has worsened. Agricultural policies favoured large-scale (estate) production at the expense of smallholder farmers who account for more than 80 percent of households. Smallholder farmers face several constraints including landlessness and small land holdings and declining agricultural productivity. This study argues that past agricultural strategies have been less successful because they ignored the land question among smallholder farmers. We show that access to land via agricultural production is one of the important factors that can translate growth to poverty reduction. Hence, for agricultural based strategies to be pro-poor in Malawi, land redistribution or resettlement programme for the landless or near landless should be central and a pre-condition for the effectiveness of pro-poor growth strategies in agriculture.
Introduction
Malawi has pursued an agricultural-led development strategy since its independence in 1964.
This agricultural-led development strategy was based on the promotion of a dual agricultural system comprising estate (large-scale) production mainly for cash (export) crops and smallholder agricultural production mainly to support the food security needs of the population. In the post-independence era the objectives of an agricultural strategy were four fold: to raise agricultural productivity and accelerate growth and export performance; to diversify the export base from the dominance of tea exports; indigenise estate (large-scale) agriculture and to encourage production by smallholder farmers (Kaluwa et al., 1992). In the early years of independence, government policy was biased towards estate-led agricultural development.3 Nonetheless, smallholder agriculture remains an important source of livelihoods for a majority of the rural population and approximately 84 percent of agriculture value-added comes from 1.8 to 2 million smallholder farmers who on average own only 1 hectare of land (World Bank, 2003).
Various policies in the 1960s and 1970s were implemented to support smallholder agricultural development including guaranteed produce prices through the state marketing agency, government administered agricultural input credit, promotion of technologies and subsidies on key agricultural inputs. Although, the policy emphasis has been on the agricultural sector over the past four decades, the economic situation has not changed substantially and recent studies show that poverty is increasing. In 1998 the integrated household survey revealed that 65.3 percent of the population were poor with consumption of basic needs below the minimum level of MK10.47 (US$0.34) per day (GOM, 2000). Thus, although Malawi had almost completed economic policy reforms towards a market economy, the qualitative poverty monitoring study conducted in 2000, however, revealed that the poverty situation was worsening due to several factors some of which were a result of economic liberalisation (GOM, 2002a).
Like many other developing countries, poverty has become the central problem confronting Malawi in the new millennium. It is therefore not surprising that the first Millennium Development Goal requires member countries of the United Nations to reduce the incidence of extreme poverty (per capita expenditure or income of less than one dollar per day) by half by 2015 (Ferreira and Leite, 2003). While many developing countries have undertaken wide ranging economic reforms, some under the auspices of the World Bank and International Monetary Fund through Structural Adjustment Programmes, such reforms have fallen very short of expectations in delivering the prosperity benefits to large masses of the population. Thus, despite decades of economic policy reforms and increased globalisation of developing countries, poverty remains a major challenge today. In many countries, some of the structural adjustment reforms have led to inconsistent policies in promoting economic growth through poor sequencing and lack of understanding of the underlying structural issues specific to individual developing countries. Poverty reduction performance, despite substantial economic reforms in developing countries, has been disappointing (Booth, 2001).
More recently the new instruments, such as the Poverty Reduction Strategy Paper (PRSP), the Poverty Reduction and Growth Facilities (PRGF) of the International Monetary Fund and the Poverty Reduction Support Credit (PRSC) of the World Bank, for integrating poverty into the macroeconomic policy framework have been embraced in developing countries advocating greater participation and ownership of economic policies by developing countries (Bevan and Adam, 2001; Booth, 2001). In Malawi, the PRSP process was embraced as an instrument for participatory policy-making and integrating poverty issues into national development plans. The PRSP process started in 2000 and the Malawi Poverty Reduction Strategy Paper (MPRSP) was published in 2002 (Jenkins and Tsoka, 2003).
The agricultural sector has been singled out as the most important sector that can deliver pro-poor growth in the MPRSP. Several questions, however, arise in the context of Malawi. After four decades of an agricultural-led development strategy, what will enable Malawi to achieve the millennium goal of reducing poverty? What did the authorities not do in the past 40 years that will bring economic growth and poverty reduction? Is equitable distribution of land a success factor for growth in agricultural production to translate into poverty reduction? This study attempts reviews previous agricultural development in Malawi and demonstrates the importance of land reforms in achieving pro-poor growth in the agricultural sector. The paper is organised as follows. The next section reviews the agricultural development strategies in the post-independence era in Malawi and the link between access to land and
poverty reduction. Section 3 presents the methodology and model specification for investigating the relationship between changes in poverty and land. Section 4 presents empirical results on the land-poverty linkages via growth in agricultural development. Section 5 assesses the feasibility of land redistribution or resettlement policy and the salient issues that must be addressed in implementing such a policy. Section 6 provides concluding remarks.
Footnotes:
- This paper is based on a research project titled ‘Macroeconomic Policy Choices for Growth and Poverty Reduction’ funded by the North-South Institute (NSI), Canada. The financial assistance provided by NSI is gratefully acknowledged. I am also grateful to Tom Crowards, Rodney Schmidt and participants at the Wilton Park Conference for their comments and suggestions on an earlier draft of the paper. The usual disclaimer applies.
- Associate Professor of Economics, Department of Economics, University of Malawi, Chancellor College, PO Box 280, Zomba.Email:echirwa@yahoo.com
- Smale (1995) notes that estate agriculture was vital for exports since smallholder export production were deemed unreliable because of considerable annual fluctuations. In addition, estate agriculture was also easier to coordinate and made it easier to finance research and development.
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