Failed Magic or Social Context?Market Liberalization and the Rural Poor in Malawi

Pauline E. Peters

Abstract

One of the key questions in the debates swirling around structural adjustment programs in Africais their effects on the poor. Have these programs "benefited ... the rural poor disproportionately",

as concluded in Adjustment in Africa (World Bank 1994)? The answer for rural families studiedover a period of years in Malawi is no. Market liberalization has provided new income opportunities

(through tobacco and maize sales) that have disproportionately benefited the better-off households,while the poorest twenty-five percent have experienced a relative worsening in income and food

security despite increasing the proportion of maize harvest retained and the share of cash budget

spent on purchasing maize. Rather than being due to markets failing "to work their magic" (Mosleyand Weeks, 1993), the outcome is interpreted as the effect of economic policies being mediatedthrough socio-cultural and political relations.

Pauline E. Peters is an associate at HIID and teaches in the department of anthropology at Harvard.She is a social anthropologist who has done extensive research in central-southern Africa,particularly Malawi and Botswana. Recent publications include Dividing the Commons: Politics,Policy and Culture in Botswana (University of Virginia Press, 1994); The Uses and Abuses of theConcept of Female-headed Household, in D. Bryceson (ed.). Women Wielding the Hoe: Lessonsfrom Rural Africa for Feminist Theory and Development Practice (Berg, 1995); "The Erosion ofCommons and the Emergence of Property: Problems for Social Analysis", in R.C. Hunt and A.Gilman (ed.) Property in the Economy (forthcoming). She is currently conducting longitudinalresearch in Malawi on the process of agricultural commercialization.

1FAILED MAGIC OR SOCIAL CONTEXT? MARKET LIBERALIZATION

AND THE RURAL POOR IN MALAWI

Indeed, the faith that "adjustment helps raise living standards overall and especially for the

poor" [as stated in the World Bank-UNDP 1989 report, Africa's Adjustment and Growth]

would seem one of those piously ideological wishes derived from the view that little, if

anything, can ever go wrong if markets are left to work their magic (Mosley and Weeks,

1993:1595).

1. INTRODUCTION

The debates in recent years around structural adjustment and market liberalization in Africa

are the most contentious and polarizing since those of the 1960s and 1970s on development versus

underdevelopment in Latin America. In both instances, the polarization occurs in large measure

because the descriptive labels are too broad, too under-specified, and too ideologically freighted to

pinpoint the precise processes and conditions authors address. The concepts of development, under-

development, and structural adjustment are as much politically phrased as technical, tending to

conflate the normative and prescriptive with the descriptive and analytical, and referring

simultaneously to an end state and a process. In consequence, the definitional criteria and the

measures of under/development and structural adjustment are difficult, multiple, and contested.

In some ways, the current debates swirling around structural adjustment replay the

discussions of the seventies on what "development" does or should mean. Debates about

development have been over the appropriateness of equating it with economic growth as opposed

to growth and or through redistribution. How are economic growth and the reduction of poverty to

be connected? -- are they alternatives? or linked hierarchically such that growth has to come first?

2or achievable in tandem? The debates around structural adjustment and liberalization have been very

similar, producing questions about their distributional effects, and leading to programs on the "social

dimensions of adjustment".

Underlying these apparently pragmatic policy questions raised by "development" and by

"structural adjustment and liberalization" is an implied separability of economy and society. This

apparently simple distinction has a complex intellectual history connected with the emergence of

neo-classical economics (see, for example, Deane 1978, Kahn 1990, Preston 1992, Rothenberg

1992). My simpler point here is that the analytical separation of economy and society has costs, and

that these become dangerous costs if the analytical separation is transmuted into one supposed to

exist in reality, ie. that one can attend to the economy without paying attention to the society. Many

of the disputes over structural adjustment policies and their effects in the world turn on a failure to

recognise that all economic policy actions are necessarily mediated through pre-existing social,

political, and cultural structures. Perhaps the most disabling opposition in disputes about structural

adjustment and liberalization is setting "the market" against an amorphous rest of the society,

typified sometimes as "government", sometimes as "civil society". But "the market" is an analytical

construct used to describe multiple relations among a vast range of actors (producers, consumers,

buyers, sellers, transporters, traders, business corporations, and so on). What a market "does" is, in

fact, an outcome of these multiple relationships. Hence, the question we face in African countries

today, where rapid policy change is taking place through programs of structural adjustment and

liberalization, is not whether or not "markets are doing their magic" but the more prosaic and less

glamorous task of trying to understand the way that socio-cultural and political structures mediate

economic policies. Given the political change underway in most of the African continent, not to

speak of the considerable volatility, unrest, and civil strife in many places, this task is even more

pressing.

3Current discussions about structural adjustment and liberalization programs have recognized

the enormous difficulties in separating the "effects" of these programs from the interaction of the

latter with pre-existing conditions (Gibbon 1992, 1993, Killick 1993, Mosley and Weeks 1993,

Nelson 1990). In addition, national and sectoral policies are necessarily "broad brush" in their

formulation and practice. Designed for an entire country or sector, it is not surprising that such

policies have differential effects on different categories of the population. But we need to know what

kinds of differential effects, and how and why they occur. One of the most pressing debates has been

precisely about the consequences of the policy reforms for different groups, particularly the poor.

In this paper, I seek to throw some light on this question with special reference to Malawi and on

the basis of a longitudinal study of rural households, which were the subject of a field study in

1986/7 and again in 1990/1.

2. CONTEXT TO THE STRUCTURAL ADJUSTMENT PROGRAMS IN MALAWI

During the 1970s, Malawi's enviable economic growth rates of up to five percent per annum

were attributed to its "market-oriented" policies (Acharya 1981). Its portrayal as a free-market

miracle had to be rejected when research published in the early 1980s showed that much of the

production increase was "achieved by directing the investment resources of the commercial banks

and ... ADMARC [the crop marketing board] ... into private tobacco estates" (Kydd 1988:31). The

market miracle was, in fact, a state-structured dual economy effected through political rather than

market means -- "magical" or not. The combined effects of the oil shocks, declining terms of trade1

for exports and poor management in the (newer) estates precipitated a financial crisis in 1979-80

(Kydd 1988:31). An IMF Standby loan was arranged in 1980, followed by negotiations with the

World Bank for a series of structural adjustment loans from 1981 through to the present.

4The first signs of "economic recovery" between 1982-5 then stalled, with the per capita GDP

in 1986 being 11% lower than the peak in 1979 (Kydd 1988:33). Given the centrality of agricultural

production for both export crops and national food security, the adjustment put strong emphasis on

improving producer prices for smallholders. The maize price was increased by 68% in the 1981-2

season, leading to a large increase in maize purchases by ADMARC (Kaluwa 1992:29). However,

subsequent analysis showed that this was less an increase in total production than a shift among

crops. The increase in maize sales was associated with a sharp decrease in the sales of tobacco,

cotton and groundnuts. Subsequent price hikes for the latter crops led, in turn, to a decrease in maize

sales. The price shifts and a decline in the use of higher-yielding maize varieties appear to have led

to the situation described for 1986-7: "maize production was at the lowest level recorded [for the

'eighties and] equal to the preadjustment level of 1980/1" (Sahn et al. 1990:93). The crop data

revealed the limited effect price changes had on total agricultural output, which was more

determined by "structural constraints" such as access to sufficient land and labor and to inputs of

fertilizer, seeds and credit (Lele 1987, 1989; Sahn et al. 1990).

These structural conditions also underlie the conclusion reached by a report on Food Security

that, despite Malawi's "large marketed surpluses" of maize which "achiev[e] the appearance of

national food security ... the per capita availability of food as measured in caloric value has

displayed a significant downward trend since 1972" (World Bank, 1990: 9-10). The overall

assessment of structural adjustment programs to date appears to be that there has been a somewhat

more positive effect on the "macroeconomic balance" (Kaluwa 1992) than on the living standards

of the poor. The decline in the real value of the minimum wage had been documented in Sahn et2

al.(1990) and in the annual reports on food security by the Office of the President and Cabinet since

1989. In seeking to account for this situation, most of the commentators stress that one has to look

beyond the "process of policy reform" itself to "the structural characteristics of the economy prior

5to adjustment" (Sahn et al., p.217; cf. Chilowa 1991; Kaluwa 1992; Lele 1987; Mapondo n.d.; Roe

1990). In this paper, some flesh is put on the bones of the "structural constraints" by means of a

study undertaken among rural households in southern Malawi.

In brief summary, Malawi is one of the most densely populated countries in Africa, with

densities of 125 and more per square kilometre in the crowded southern region. Currently, the

national average family landholding is one hectare and, with a population growth rate of over three

percent, can only drop. Although rural families, who make up over eighty percent of the population,

depend on their own maize production for the bulk of their staple food supply, 70-80% run out of

their stored maize before the next harvest in an average year, and are dependent on purchases or

other means (gifts or compensation for work) for obtaining foodstuffs. Food shortages combine with

endemic disease (especially malaria, parasites, measles, respiratory illness) to produce the high rates

of infant and child mortality and chronic undernutrition that have been documented in national

surveys and local studies. 3

3. A RURAL CASE STUDY, 1986/7 to 1990/1

Since 1986/7, I have been conducting a longitudinal study of some two hundred households

in a district in the Shire Highlands of southern Malawi. Here, I discuss some of the findings from

the first tranche, 1986/7 to 1990/1. The first round of research took place over the agricultural

season of 1986/7. Since the program for liberalizing crop marketing was initiated in the latter part

of 1987, the restudy of the same households during 1990/1 provides a basis for comparison with the

pre-liberalization year. In addition, during 1990/1, the government of Malawi authorized a pilot

project in the liberalization of burley tobacco production, by allowing a small proportion of rural

families to grow this crop which, formerly, had been restricted to estates. The area of our research4

happened to be one of those chosen for the pilot project.

6Both rounds of research employed multiple methods of enquiry. Repeated socio-economic

surveys of households were conducted of income, expenditure, food stores, child morbidity (all

monthly); single surveys for measuring fields, cropping patterns, harvests; and seasonal surveys for

labor use, wage rates, and for anthropometry. In addition, ethnographic (anthropological) and oral

historical research was carried out on relevant topics. The initial sample of households selected in5

1986 was based on a random selection of villages in an area known to be densely populated and to

include tobacco growers (mostly dark-fired tobacco plus some "illegal" burley). Given the purpose

of the research to investigate the interaction of cash cropping and food security, within the villages,

we purposively selected families so that approximately one third should be growing tobacco, and

the remainder from a range of land-holding size (from "large" to "small"). All grew maize and other6

food crops. In 1990/1, the same methods of data collection were used. Some ten percent of the

households had left or dispersed because of death, divorce, or movement for other reasons. Although

circumstances had allowed only ten months of data to be collected in 1986/7, twelve months of data

were collected in 1990/1. The data were adjusted for comparative analysis.7

Unsurprisingly for one of the most densely populated areas of a small, agricultural country,

landholding size is positively correlated with income. The average household landholding in both

years was 1.5 ha. This is above the average for the district and the southern region as a whole

because, in purposively selecting one third of the sample to be tobacco growers, we had willy-nilly

over-selected those with more land. While the sample includes families with very small amounts8

of land (under half a hectare) and very poor families, and thus allows study of these social

categories, the sample means nevertheless over-represent the better-off. Farming provides the bulk

of income, both in kind (food) and cash, but about a third of total income was earned, on average,

in both years from off-farm sources (self-employment, wage labor, and transfers, mainly from other

family members). Between the two years, and as a consequence of the market liberalization

7measures, households in the top fifty percent of income decreased the proportion of their income

from off-farm and increased that from agricultural sales, as is discussed below.

Most landholdings are divided into an average of four fields that are separated from each

other, and all cultivation is by hand-held hoe. The vast majority of land (c.80%) is under maize, the

staple food of the region, though virtually all the maize is intercropped with legumes and other

vegetables. Maize is the queen of the fields because, in the local idiom, "maize is [our] life"

("chimanga ndi moyo"). The maize harvests provide households with the bulk of their food supply,

70% in 1986/7 and 86% in 1990/1. Maize is also a cash crop, with over half of households selling

some (53% in 1986/7 and 60% in 1990/1). Most sales are of very small quantities so that, of the

total amount of maize produced by households, only 9% was sold in 1990/1, slightly less than in

1986/7. Most of the small sales of maize are transacted through the local markets, but in both years

the bulk of all maize sold was sold to ADMARC, the crop marketing board. This reflects the skewed

distribution of sales -- many small sales by a large number of farmers and a few farmers selling

large quantities. The liberalization of the grain market in 1987 resulted in more private traders

operating during the harvest season of 1991 but only 25% was sold to traders in that year by sample

households. While about half of the households did not sell maize, virtually all purchased maize

(95% in 1990/1), reflecting the fact that the majority of rural households are net purchasers.

(a) Documented changes in household data, 1986/7 to 1990/1

(i) Levels and sources of income

The overall average household income of the sample increased between 1986 and 1990. But9

the increase proved to be heavily concentrated in the top fifty percent of households so that the

income differential between the top and bottom income quartiles actually widened. Assessing

income changes in money terms in a period of high inflation is difficult, especially for a group who

8derive so much of their livelihood from own production. Since there is no Consumer Price Index

(CPI) for rural areas, I use the low-income CPI for Zomba town. This changed from 160.6 in 1987

to 300 in 1991 (on a base of 100 for 1984) and provides a deflator of 0.5353. As seen in Table 1,

the resulting calculation suggests that there was an overall increase in the sample average income

of 26%. However, this masks unequal gains: the breakdown of the sample by income quartiles

shows gains of 56% for the richest group and a loss of 16% for the bottom quartile. Because the CPI

is constructed for urban groups, it is at best a rough measure for a rural population, but its use as a

deflator may indicate a relative decline in the incomes of the poorer households over the four years

between 1986-7 and 1990-1. Thus, the poor have lost ground relatively rather than gaining

disproportionately over the period of liberalization.

The findings on shifts in income sources and in food expenditures for different income

groups support the picture of a gain for the better-off and a loss for the poor. The overall pattern of

diversification followed by sample households, combining crop production for food and for sale

with various off-farm activities and sources of income, was clear in both years (and continues to be

so). However, between 1986 and 1990, the poorest twenty-five percent of families decreased their

income from crop sales and increased that from casual wage labor. These households have

experienced a large decline in their agricultural cash income, and were, for example, the only

income quartile to have decreased their share of income from maize sales. This is particularly

noteworthy, since in 1986-7, the proportion of maize harvest sold by this poorest quartile was twice

the sample average (22% cf 11%). The reverse holds for the better-off families, who proportionately

reduced their income from off-farm sources and increased that from agricultural sales (see Table

2). This was particularly marked for the richest twenty-five percent of households, who increased

the share of their total income from tobacco substantially (from 9% to 29%), and also increased the

share from maize sales (from 2.4% to 8%).

9(ii) Harvests, food supplies and expenditures

Sample households reaped larger maize harvests in 1990/1 than in 1986/7, with even the

poorest twenty-five percent (who also have, on average, smaller landholdings) making some gains.

Since there was no significant change in the amount of land cultivated, nor in the weather patterns,

the improvement in harvests appears to be attributable to the large increase in the number of

households growing high-yielding varieties of hybrid maize (from 2% in 1986/7 to 52% in 1990/1),

and an increase in the average amounts of fertilizer used. This outcome, in turn, is attributable to

special efforts by government, following the dramatic decline of hybrid maize production up to

1986-7, to promote and encourage its production. This was achieved by institutional changes in

extension services that increased the access to credit for smallholder maize (and fertilizer), including

the formation of women's credit clubs, and by improvements in service delivery of hybrid seeds.

Although not presented here, the sample data reflect these efforts and are supported by national data

and field surveys in all regions showing the same increase in hybrid maize production (Smale et al

1991).10

The larger harvests, combined with attractive producer prices and an increase in the number

of private traders, led the majority of households to increase their maize sales (Table 3). In clear

contrast, households in the lowest income quartile reduced their maize sales. Across the sample,

households increased the proportion of their total maize supply provided by their own stored maize.

As far as maize purchases were concerned (virtually all in the deficit or pre-harvest season), the

average amounts decreased for all income groups. However, a major difference emerges when one

considers the share of household cash budget spent on purchasing maize. While the top income

quartile households actually reduced their budget share, and the middle fifty percent spent about the

same proportion, the poorest twenty-five percent of households increased the budget share even

though they obtained a smaller quantity of maize. When the total supply of maize is considered,

10

households in the third income quartile significantly increased their per capita supply, households

in the second income quartile had a marginally significant increase, but the bottom income quartile

achieved no significant increase. (The lack of significance in the figure for the top quartile is

probably explained by the high standard deviation of 244.9 for the 1990 figure).

In sum, the strategy followed by the poorest quartile of households (reducing maize sales

to increase retained stores, increasing wage labor to replace forgone cash revenues, and increasing

the budget share of purchased maize) did not prove sufficient to significantly improve their food

situation. This finding together with that on an intensified skewness in income distribution suggest

no improvement and, possibly, a worsening in the welfare and food security of the poorest twenty-

five percent.

(b) Interpretation of changes

The program of liberalizing crop marketing involved several changes: increases in the

producer price for maize (and, over the years, in other food crops relative to maize); efforts to

encourage private marketing of crops; and allowing (some) smallholders to grow burley tobacco.

The reasons these changes resulted in greater benefit for the richer households and a possible

worsening for the poorest lie in the pre-existing distribution of resources and the structure of social

relationships mediating access to resources of land, labor, capital, credit and information.

Because all smallholder households give first priority in cultivation to the production of

maize as the staple food, tobacco and similar non-food crops have been grown disproportionately

by those with larger amounts of land. In addition, growing and processing tobacco requires a high

input of labor, which also favors those who have more than adequate family labor and who are able

to hire workers. The large bulk of labor hiring in the villages is done by the richest ten to twenty

percent of households because these are able to obtain sufficient cash (either through crop and

11

livestock sales, transfers from employed children, or other business activities) to pay workers, and/or

have sufficient surplus maize to compensate workers "in-kind". In addition, it was precisely these

better-endowed farmers who were disproportionately represented in the credit clubs organized by

agricultural extension staff. They also provide most of the store-keepers, traders, and the leaders in

the political, religious, and community organizations. Hence, when the legalization of burley

growing took place, the majority of applicants for the pilot projects were these farmers with more

land, with maize surpluses and access to cash, and who were already closely connected with the

extension service. When, in 1991, new organizations (so-called "clubs") were formed to enable

burley growers to sell their tobacco directly on the auction floors (at world price), again the

membership was drawn disproportionately from the top third to a quarter of farming households.11

It is not surprising then, with hindsight, to see the richest twenty-five percent of households

benefiting so much more from the liberalization of burley production. This does not mean that the

bottom thirty percent of households have derived no benefit from the liberalization. Some do grow

small amounts of burley tobacco and this trend has increased somewhat since 1990. Moreover, the

large injections of cash income from burley tobacco into the community circuits of exchange can

be seen to have some beneficial spinoffs for families other than those who are direct recipients of

burley money. For example, the burley money has been put into new and improved housing,

furniture, clothes, household artefacts, and bicycles. These expenditures, in turn, translate into more

jobs (making bricks, carpentry, bicycle repairs) for others. Similarly, the increased expenditures on

certain foodstuffs, such as small cakes or fish, or on beer and local gin (kachasu) translate into

benefits for the local producers of these goods. These trends have been confounded by the repeated

droughts from 1991 but, in good rainfall years, seem to reemerge.

The ability of the richer twenty-five to thirty percent of households to benefit from the

liberalization of burley production between 1986/7 and 1990/1 was seen, too, in their taking up the

12

opportunity for increasing maize sales. An increase in the producer price for maize is attractive

mainly to the surplus producers who are precisely drawn from the category already described --

better endowed with land, labor, and both financial and social capital. It is important to stress that

all households, including the richest, aspire to produce all the maize they need. Only a small

minority (perhaps ten to fifteen percent) manage to do so consistently. Hence, the producer price

is most important to these. For the larger number of households who sell only small quantities of

maize, which often do not represent an absolute surplus but a way of obtaining cash for other

purposes, and for the people who sell no maize, the critical price is the consumer price, the price that

holds in the deficit months before the harvest.

People in the sample area know very well that an increase in the producer price almost

always translates into an increase in the consumer price. Each time the maize prices have been raised

significantly in recent years, even those people who have made an immediate gain through their

small post-harvest sales of maize inevitably expressed anxiety that "it [the price hike] means maize

will be more expensive in January". We saw above that the households in the bottom income

quartile, who are also among the most deficit in own food supplies, reduced the amount of maize

sales between 1986/7 and 1990/1. We also saw that, despite doing so, and despite spending a larger

proportion of their cash budget on purchasing maize, they ended up with no significant increase in

their total supply. This pattern suggests an increase in the cost of maize relative to their earnings.

Let us consider this a little more. First, people explained to us that they reduced their maize

sales in the hope of reducing their dependence on food purchases since they saw the price of

purchased maize rise, and also felt that the uncertainty in supplies of food for purchase was

increasing. In trying to identify the source of these perceptions, I found that, in the deficit months

immediately following liberalization (September 1987 to February 1988), there had been an

unusually sharp increase in the prices for maize in the Blantyre urban markets. This became well

13

known in the sample villages, the information flowing through family members who work in or

travel to town and through traders moving between the villages and town. For families with

members living and working in town it had more immediate effect in influencing their income and

expenditures. Subsequently, analysts in Malawi decided that the main influence on the

unprecedented rise in prices was less an effect of the liberalization measures as the sudden influx

of aid monies to buy maize for the Mozambican refugees flooding into camps. The pressure to buy

maize pushed prices way above the usual seasonal increase. From the point of view of village

consumers, however, the much sharper rise in prices for food in the deficit season signalled that they

should try to increase their own stored supplies.

In addition, people in the study villages reported increased instability in the prices and

movements of maize in the immediate rural area, pointing to the increase in numbers of people

buying and selling maize immediately after harvest. People thus expressed anxiety not only about

the sharp seasonal price rise in the neighboring towns but also about the possibility of more maize

leaving the area than normally. Both circumstances led to fears of higher prices in the deficit, pre-

harvest months when so many of them had to purchase maize. Such an interpretation has to be

understood against the well-established seasonal shift in prices, the higher deficit season prices in

the local markets than in ADMARC centers, and the periodic shortfalls in ADMARC supplies.

ADMARC has long played an essential role in supplying the majority of deficit households with

maize. However, people have also long learned that ADMARC centers often run out of maize in

January or February, throwing people onto the small supplies still available in local markets or

villagers' granaries. In both 1986/7 and 1990/1, there were a couple of such shortages in local

ADMARC centers during January and February in the research area which caused distress and

extreme anxiety for the many who can only scrape enough cash together to purchase maize every

few days. In years of national shortage, these localized cuts in supplies are more common. The

14

overall effect is to provide a further incentive to people to provide as much of their own food as

possible. People's perceptions of increased instability in prices and supplies in the years following

liberalization and high inflation have reinforced such a response. Hence, the survey showed an

overall increase across the sample in the proportion of maize harvest stored for future use.

Analysis of maize prices in the local markets suggests an additional reason for poor

households to reduce their post-harvest maize sales in an effort to reduce purchases later in the year.

The particular squeeze felt by poorer households may have derived from the fact that their sales and

purchases of maize are disproportionately through local markets compared with the better-off

households. Most purchasers of maize in the deficit season prefer to purchase from ADMARC since

the government-regulated price there is lower than prices for maize in the local markets (or those

asked by local farmers with surplus stores or by local storekeepers). However, shortages of cash,

time, and other constraints lead to many of the poor buying in small quantities and at a high

premium (over ADMARC's price) in local markets or from other villagers or, at a high implicit

price, in exchange for labor.

Table 4 gives the change in prices for maize in ADMARC and local markets between 1986/7

and 1990/1 in nominal and real (deflated) terms. The figures indicate a slight increase in12

ADMARC prices, moreso for producer than consumer prices. The consumer price in local markets

increased much more (by about 19% over the 1986/7 level). Since, as noted, the poorer families

more often buy in local markets, this is one likely explanation for the greater pressure on their food

budget. Moreover, while government mandated an increase in producer prices at ADMARC, those

in local markets fell by just over 25% by comparison with the pre-liberalization year of 1986. Since

smaller producers also tend to sell whatever maize they sell in local markets, then the lower

producer price combined with the higher consumer price represented an overall increase of 44% in

the actual cost of their maize.

15

Finally, if the poorest twenty-five percent purchased less maize, despite increasing the share

of their cash budget spent on it, this suggests that, despite shifting more into casual wage labor, their

rates of compensation fell behind the rising costs of maize. This would fit with the decline in the

real minimum wage documented by those working with national data (Sahn et al. 1990, Food

Security and Nutrition Bulletins of the Malawi Government). Here, it is important to point out the

way that casual wage labor is organized in rural areas. The official minimum (day's) wage is

virtually never given to hired workers by the smallholder farmers who hire the bulk of casual labor.

(Some, but by no means all, of the privately owned, small estates use the minimum wage.)

Moreover, a very large amount of the work done is by the task rather than by the day or month. For

example, clearing and ridging is usually done by the field (which vary greatly in size), weeding by

a certain number of ridges or planting stations, water carrying by the bucket, etc. The particular rates

also vary, though generally within a certain range with, for example, relatives and neighbors

normally at the higher end compared with incoming workers (from even more land-short areas).

Among local people, the most vulnerable in labor-hiring arrangements are the chronically

poor. These work disproportionately more often in the deficit, pre-harvest months for compensation

in food (maize, cassava, sweet potatoes, etc.). Because they are known to have few or no reserves,

their bargaining position is poor. Hence, in years of harvest shortfall or in periods of poor supply

of maize for purchase, they find themselves having to work at even more disadvantageous rates than

in more "normal" years or periods. In recalling for me the year of the serious drought, 1991/2, one

of the poorest women in my sample said she had to work much harder than usual -- further

conversation revealed that this translated into more work demanded for a particular amount of maize

or cassava. In contrast, after the food relief distribution during the drought of 1993, some of the

bigger farmers in our sample were unable to recruit as many laborers as they wanted to (at the rates

they offered) precisely because "people were satisfied with the free food". In other words, the food

16

distributed to the poor significantly reduced their need to work at rates of compensation which they

considered low but, usually, had no ability to refuse.

In the period considered in this paper, 1986/7 to 1990/1, the rates of compensation for casual

labor appear not to have kept pace with the rising cost of living, particularly maize. Since the

increase in burley tobacco production entails an increased demand for labor, one would expect that

it might translate into rising levels of wages. In the period considered, this appears not to have

happened. Since then, the periodic droughts have confounded any trends at all. It remains to be seen

whether a further spread of burley growing will push up local wages.

4. THE MALAWI CASE AND STRUCTURAL ADJUSTMENT IN AFRICA

Over the past decade, many critiques have been published arguing that structural adjustment

has had negative effects, especially on the poorer and more vulnerable groups. In contrast (and

partially as a reponse) the recent report on Adjustment in Africa by the World Bank (1994)

concluded that, in those countries with "more successful adjustment reforms" and a rise in GDP per

capita, not only has "faster growth in all likelihood reduced the deterioration in the conditions of the

poor" but "the gains from growth may well have benefited the poor, and especially the rural poor,

disproportionately ... [because of] the reductions in disincentives to the production of tradable

goods, as well as other agricultural reforms such as liberalizing marketing" (p.165).

The assumptions behind this conclusion include that higher producer prices will induce

farmers, including the rural poor, to sell more, thus benefiting from the price increase; that rural

households are net producers; and that, once "adjustment reforms" are in place, the obstacles to

households shifting into more profitable tradable goods are removed. However, if these assumptions

do not hold, then the rural poor are likely to experience either stagnant or declining levels of income

and food security. This is what I have argued for Malawi in this paper, pointing out that rural

17

households have to be set within their specific social contexts to understand why the assumptions

(made in the World Bank report, but more generally held) are incorrect, and, hence, why the

conclusions do not follow.

First, the contention that an overall increase in per capita income "reduced the deterioration

in the conditions of the poor" is not supported by the Malawi case. An increase in income for the

total sample proved to be heavily concentrated in the top fifty percent of households so that the

income differential between the top and bottom income quartiles actually widened. Moreover, the

lack of a significant rise in total maize available (retained and purchased) for the poorest twenty-five

percent of households, despite an increase in the percentage of maize harvest retained for own

consumption and despite an increase in the proportion of their cash budget spent on maize, together

suggest more, not less, stress on their food security.

Second, the proposition that "the reductions in disincentives to the production of tradable

goods, as well as other agricultural reforms such as liberalizing marketing" led to a disproportionate

benefit for the rural poor also fails to hold for Malawi. Certainly, the overall effect of the Malawi

government's actions in rescinding the ban on smallholder farmers from producing burley tobacco

has been to increase the agricultural income of growers. However, the beneficiaries of the new

burley program are disproportionately drawn from the better-off families. In years of good rainfall

and harvests, some of the burley income does appear to flow into other people's pockets through the

increased demand by burley growers for locally-produced goods and services, although upward

pressure on wages for the poorest quartile is not evident.

Third, the Malawi case shows that, when the majority of farmers are net consumers, it is not

appropriate to assume that improved producer prices will induce farmers, including the poor, to sell

more of their produce, including food crops. The 1994 World Bank report does recognize that the

rural poor produce much of their own food and are therefore "somewhat buffer[ed] from market

18

forces". But the report appears to set aside the implications of this recognition when it continues:

"they still rely on selling their produce for a significant part of their income. So, changes in market

[producer] prices matter" (p. 167). Increases in prices received for crops sold are beneficial but their

overall effect has to be set against the sellers' "costs". Because the poor are net consumers of maize,

the rise in producer prices for maize caused them to reduce the amount they sold from their maize

harvest in an attempt to cope with the expected rise in consumer prices. The net effect of a price rise

in maize was negative for them -- therefore, they made a relative withdrawal from marketing. Those

who benefitted most from the increase in producer prices were the true surplus producer-sellers.

These three corrections to the World Bank's conclusion made on the basis of household data

from Malawi turn on two critical points. First, the need for land, labor and capital entailed in

entering or intensifying tobacco production and maize sales meant that the better-off were able to

take up opportunities consequent on market reforms that are not feasible for the poor. Second, that

chronic poverty, including chronic food deficits, resulted in the poorer losing when producer prices

for foods were increased, because they had to purchase at the higher consumer prices.

A final point on the importance of setting policy reforms, including market reforms, into

their social and institutional context shifts from household strategies to regional distributional

systems of food.

Clearly, one major part of households' food security strategies emerging from the study was

the failure of the private traders, at least up to 1990/1, to provide a stable source of affordable maize

for purchase in the deficit pre-harvest season. The rationale for the liberalization of grain marketing

was to increase the efficiency of ADMARC, and, by encouraging private traders to enter the market,

to increase the efficiency of the food market in adjusting to changes in supply and demand.

Subsequent research has shown that the latter has not happened, at least insofar as the dependence

on ADMARC is concerned. While fairly large numbers of traders have registered as licensed traders

19

and a much larger number of small unlicensed traders (mostly farmers) opportunistically trade a few

bags of maize or pigeon peas to make a little extra cash, the traders are heavily concentrated in areas

not far from the main urban centers of high demand for maize and other food crops. The research

area reported on here, for example, is within reach of Zomba, a local market town with a substantial

urban population, as well as Blantyre-Limbe, the largest commercial center in the southern region,

where maize is purchased by a very large urban population as well as by industries (breweries, grain

millers) and large institutional customers (hospitals, schools, Police). A study of maize trading by

the Food Studies Group of Oxford University also found that traders were highly concentrated in

urban centers, in centers located near the borders with Mozambique, from which come apparently

significant flows of maize, and within reach of key ADMARC buying centers to which many traders

on-sell (1992:10).

Areas distant from such centers and from main transport routes are not well served. As part

of the restructuring of ADMARC, several of its centers were closed but traders failed to move into

these areas, leaving large gaps in the trading network (Cromwell 1992:124). This caused such

hardship for villagers wanting to sell maize after harvest and needing to purchase maize in the

deficit season, that a number of the centers had to be reopened (Kaluwa 1992). The reasons for the

concentration and the gaps in trading networks are reportedly the lack of capital and expertise for

large-scale storage of maize from the harvest to deficit seasons, the scarcity and cost of transport,

and the wish, among many traders, for a quick turnover of cash.

Another critical aspect of this situation is that the traders are active immediately after the

main harvest but disappear from the rural areas in the deficit season. In 1990/1, for example, in the

research area discussed here, there was only one fairly large-scale trader who ran a store selling

maize in the deficit season. 13

20

What are the implications of the changes in crop marketing for the income and food security

of rural households? I divide the answer into consideration of production and consumption of maize.

Farmers in the areas where traders are most active are provided with extra options for farmers to sell

their maize. Farmers note that they particularly appreciate the fact that some traders arrange to pick

up the crops to be purchased at the seller's compound (despite the regulation that traders are

supposed to operate only from recognized markets). Obviously, this is an advantage for the few

large-scale sellers in the villages. Another rule on the books is that traders are not supposed to

operate before the offical opening of ADMARC buying centers. This is also disregarded. However,

farmers who sell early usually need to do so for urgent cash needs and do so at a lower price than

the announced official price. Although traders have a bad name in such circumstances, our data

indicate that similar reductions in price have been and continue to be made by the larger producers

of the area who also buy and sell from and to fellow villagers. Hence, the critical determinants

appear to be the seasonal changes and the prevailing regulations rather than trader vs ADMARC.

However, the concentration of traders in areas reasonably close to ADMARC and urban centers

means that farmers in the poorly served areas wishing to sell maize in quantity continue to rely on

ADMARC as buyer.

As far as maize consumption is concerned, I pointed out that traders have had virtually no

effect on the availability of maize in rural areas in the deficit season. Our monthly surveys of the

source of maize consumed show that in January (1991) 63% of maize used in meals was purchased

from ADMARC compared with only 3% from traders, the rest coming from own stores, local

markets, gifts and compensation for work. A study of trading in the three regions of Malawi found

the same situation and concluded that traders do not play a major role in supplying maize to rural

"deficit households" (Food Studies Group, 1992:10, 22). ADMARC continues to be the critically

important source of staple food for rural families. The main reasons for the failure of traders to have

21

made serious inroads in ADMARC's role as seller of maize in the pre-harvest season derive from

the small-scale nature of operations of most traders and their lack of capital and organization. They

store for very short periods before onselling to ADMARC, larger traders or urban buyers (cf.

Kaluwa 1992; Christiansen and Stackhouse 1989).

There seems to be consensus in the available research on the inability of private traders, so

far, to replace the role of ADMARC as main supplier of food to Malawi's rural households. An issue

on which there is no information, as far as I'm aware, is the effect of increased maize sales post-

harvest on local supplies in the deficit season. Might there be a decline in locally available supplies

of maize in the deficit season caused by the few surplus producers selling more maize post-harvest?

Although ADMARC is by far the biggest supplier of maize in the deficit season, the bigger rural

producers are also a source of maize whether directly through sales or through employment for food.

Our research indicates a substantial increase in the sales of maize by the bigger producers since

liberalization. The corollary of this is that these producers may reduce the amount of maize they

retain for later sale. Against such a possibility is their need for labor in the cultivation season. While

there are large numbers of poor people without maize in the area, the advantage to big producers

of holding reserves of maize to acquire labor and/or sell at high deficit season prices is likely to

counteract the attractiveness of cash from post-harvest sales. 14

A related question is whether the potentially high returns to burley production will lure the

bigger producers away from maize surpluses. In conversation, a few farmers imply this may happen,

largely because of the heavy demands on labor and management made by combining tobacco

production with surplus maize production. (Note that this does not imply a decline in maize grown

for own consumption; the richest farmers, along with the poorer, increased the proportion of

retained maize between 1986-7 to 1990-1) . In either case, the local supplies of maize in the deficit15

season would decline, throwing even more reliance on ADMARC sources than ever.

22

In short, the process of liberalizing grain and food marketing has proven to be more complex

than merely encouraging private traders to enter rural marketing. It will take time for a cadre of

entrepreneurs with the requisite capital, skill and organizational capacities to develop. Since

ADMARC continues to be the major player in the sale of maize in food-deficit months (as well as

a major player in the purchasing of crops after harvest), the process of restructuring food crop

marketing will need very careful monitoring over a number of years.

5. CONCLUSION

The optimistic conclusion cited earlier from the 1994 World Bank Report on adjustment and

liberalization measures disproportionately benefiting the poor has been questioned in this paper on

Malawi. However, that conclusion was qualified by other statements that stress the need "to protect

--and, where necessary, to strengthen-- public expenditure programs benefiting the poor, particularly

those for the delivery of basic services" (209). The latter was a conclusion also reached by Mosley

and Weeks (1993) on the basis of comparisons across African countries. They state: "it seems

reasonably clear that ... adjustment programs do not automatically help the poor" (p.1595). Not only

have the programs "diverted public expenditure away from the health and education sectors" but also

"agricultural liberalization appears only to assist food production if ... public sector development

expenditure ... supports it" (p.1593). Perhaps the most realistic conclusion in the World Bank 1994

Report is that "[a]djustment alone will not put countries on a sustained, poverty-reducing growth

path" (p.2).

As many commentators on Malawi have stressed, at issue in this challenge is "the structural

constraints" or what an anthropologist would refer to as social and political organization, including

socio-economic differentiation. Like any policy, structural adjustment and liberalization are

necessarily mediated through existing structures -- social relations of production and exchange that

23

include family and community, government, private organizations, political structures, distribution

networks, and so on. The formulation of adjustment and liberalization programs all too often does

not take sufficient account of the particular sets of structures and contingent conditions in a country.

Only analysis that takes account of these mediating structures can begin to respond to the need to

consider "the distributional consequences ... of reform programs" (Duncan and Howell 1992:5).

What might be some of the implications of the above analysis for Malawi? A long

recognized problem for the poorer rural households is that they are forced to look for temporary

work in the deficit (rainy) season, usually working on the fields of neighbors or local estates, so

failing to work as much on their own fields as they should. How might policy help break this classic

vicious cycle of the poor? One way is to find means of increasing the income (and purchasing

power) of the poor. Our research found that the injection of income in the form of cash wages from

dry season work on rural roads enabled some of the poorer families to purchase needed food

supplies when maize prices were at their lowest. The problems of transport and communications in

the rainy season as well as the tendency for bulk goods to be vulnerable to diversion by the

privileged and the politically well-connected suggest it is better to favor cash flows, that is, as wages

for work, in preference to food/seeds/fertilizer for work. However, several of the latter type

programs have been initiated in Malawi and assessments of their relative efficacy will become

available soon enough. One indication of their potentially positive effect was seen in the example

given above where food aid had the (unintended) effect of increasing the bargaining position of the

poorer families relative to the better-off families who do the bulk of the hiring locally.

Other "structural constraints" pose even more difficult problems for policy. As far as land

shortage is concerned, a moratorium has been placed in recent years on the diversion of land from

"customary" tenure to leaseholds, a welcome move though difficult to impose, especially given the

huge backlog of lease applications (see Mkandawire et al. 1990). Another suggestion has been to

24

transfer currently "unused" land from estates to smallholders, an even more difficult proposition

politically and legally, as well as technically (in light of the official call for increasing estate land

to be put into forestry). Even if some more land is made available to smallholders in this way, that

would only be a stop-gap in the face of the present rate of increase in person/land density. The

longer term solutions to low levels of food intake and the other dimensions of poverty are

considered by most commentators to lie in, one, increasing the land's productivity; two, increasing

smallholder access to higher value crops; and three, encouraging the development and expansion

of non-agricultural activities in the rural areas. In addition, given the synergy between food shortage

and sickness seen in our study (but not discussed here), improvements in access to education and

health care are needed.16

At present, tobacco is the highest value crop available for farmers. Its very high labor

demand is a problem for small families, especially those without resident adult men (so-called

"female-headed households") and with insufficient cash income from other sources to be able to hire

labor. In the longer term, moreover, the prospects for tobacco exports are likely to decline in face

of decreasing levels of smoking in some parts of the world. Sadly, the legitimate concerns about the

negative effects of smoking on health cannot gainsay the fact that, for Malawi, tobacco continues

to provide one of the very few crops able to bring it revenue, and to put money into the farmers'

pockets. As noted, the opening of burley production to smallholders is a revolution even though only

a minority of rural households can be included. In light of the difficulties associated with tobacco,

especially burley, however, other crops are also needed to provide a source of income. In our

research area, these include chili peppers (mainly for export), sunflower, and numerous vegetables

(to serve the increasing demand from nearby towns). Since the demand for these is unstable (both

in local markets and as export crops), it is unsurprising that most farmers prefer to be highly

25

diversified, switching in and out of crops as conditions change. The call to identify other high value

crops than tobacco has been frequently made in recent years but is proving difficult to realize.

If improvements in the lives of rural families are to depend, for some time, on increasing the

production and productivity of agriculture, then one has also to point to the implications for

increasing use of and competition over resources (for example, over streambed gardens which are

in increasing demand for both tobacco nurseries and for dry-season cultivation of vegetables). Major

topics for future research are the effects of intensified agricultural production on use of and claims

over resources; and, in turn, the implications for sustainable agriculture and for improvements in

standards of living of rural families. Finally, given the extensive and, to judge from our research,

apparently intensifying transfers between rural and urban populations, the policy strategies to tackle

poverty should not be conceived on a simple sectoral basis, while research needs to encompass both

rural and urban groups more often than is usual.

26

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Chilowa, W. 1991 Structural Adjustment and Poverty in Malawi. DERAP Working Paper D 1991:3.Norway: Chr. Michelsen Institute, Dept. of Social Science and Development.

Christiansen, R.E. and Stackhouse, L.E. 1989 The Privatization of Agricultural Trading in Malawi.World Development 17: 729-40.

Deane, P. 1978 The Evolution of Economic Ideas. Cambridge: Cambridge University Press.

Duncan, Alex and John Howell 1992 ed. Structural Adjustment and the African Farmer. London:ODI with James Currey and Heinemann.

Food Studies Group 1992 Study of the Impact of the Liberalization of Smallholder AgriculturalProduce Marketing in Malawi. Main Report, April, Oxford.

Gibbon, Peter, Yusuf Bangura, Arve Ofstad 1992 ed. Authoritarianism, Democracy, andAdjustment. The Politics of Economic Reform in Africa. Uppsala: Nordiska Afrikainstitutet.

Gibbon, Peter 1993 ed. Social Change and Economic Reform in Africa. Uppsala: NordiskaAfrikainstitutet.

Kahn, Joel S. 1990 Towards a History of the Critique of Economism: The Nineteenth-CenturyGerman Origins of the Ethnographer's Dilemma. Man(N.S) 25,2:230-49.

Kaluwa, B.M. 1992 ed. The Structural Adjustment Programme in Malawi: A Case of SuccessfulAdjustment? Harare: SAPES Books.

Killick, Tony 1993 The Adaptive Economy: Adjustment Policies in Low-Income Countries. (EDIDevelopment Studies). Washington, D.C: The World Bank.

Kydd, J.G. 1985 Malawi in the 1970s: development policies and economic change. IN Malawi: AnAlternative Pattern of Development. Edinburgh: Centre of African Studies.

Kydd, J. 1988 Policy Reform and Adjustment in an Economy under Siege: Malawi 1980-87. IDSBulletin 1: 31-41.

Kydd, J. and Christiansen, R. 1982 Structural Change in Malawi since Independence: Consequencesof a Development Strategy Based on Large-scale Agriculture. World Development 10: 355-75.

Lele, U. 1987 Structural Adjustment, Agricultural Development and the Poor: Some Observationson Malawi. Draft paper, December 14, 1987, The World Bank, Washington, D.C.

27

Lele, U. 1989 Structural Adjustment, Agricultural Development and the Poor: Lessons from theMalawian Experience. MADIA Discussion Paper 9, The World Bank, Washington, D.C.

Mapondo, H. n.d. Economic Adjustment Programs: Lessons from the Malawian Experience.Malawi: Reserve Bank of Malawi.

McCracken, J. 1983 Planters, Peasants and the Colonial State: the Impact of the Native TobaccoBoard in the Central Province of Malawi. Journal of Southern African Studies 9,2:172-192.

Mkandawire, R., Jaffee, S., and Bertoli, S. 1990 Beyond "Dualism": The Changing Face of theLeasehold Estate Subsector of Malawi. Binghamton, N.Y.: Institute for Development ofAnthropology.

Mosley, P. and J. Weeks 1993 Has Recovery Begun? "Africa's Adjustment in the 1980s" Revisited.World Development 21,10: 1583-1606.

Nelson, J. M. ed. 1990 Economic Crisis and Policy Choice: The Politics of Adjustment in the ThirdWorld. Princeton: Princeton University Press.

OPC (Office of the President and Cabinet) 1989 Food Security and Nutrition Bulletin, October,1989, Volume 1, No.2, Lilongwe.

Preston, Peter 1992 Modes of Economic-Theoretical Engagement. IN Contesting Markets: Analysesof Ideology, Discourse and Practice ed. Roy Dilley, pp.57-78. Edinburgh University Press.

Roe, G. 1990 ed. Report of the Workshop on The Effects the of Structural AdjustmentProgrammeme in Malawi. Centre for Social Research, University of Malawi, Zomba.

Rothenberg, Winifred B. 1992 From Market-Places to a Market Economy. Chigago U.Press.

Sahn, D.E., Arulpragasam, J. and Merid, L. 1990 Policy Reform and Poverty in Malawi: a surveyof a decade of experience. Ithaca, New York: Cornell Food and Nutrition Policy ProgramMonograph 7.

Smale, M. with Kaunda, Z.H.W., Makina, H.L., Mkandawire, M.M.M.K., Msowoya, M.N.S.,Mwale, D.J.E.K., and Heisey, P.W. 1991 Chimanga cha makolo, Hybrids, and Composites: anAnalysis of Farmers' Adoption of Maize Technology in Malawi, 1989-91. CIMMYT, Mexico.

Timmer, C. Peter, Walter P. Falcon, Scott R. Pearson 1983 Food Policy Analysis. Baltimore: JohnsHopkins University Press for the World Bank.

World Bank 1990 Malawi Food Security Report. Washington, D.C.

.......... 1994 Adjustment in Africa: Reforms, Results, and the Road Ahead. Washington, D.C.

.......... 1996 Malawi: Human Resources and Poverty. Profile and Priorities for Action. Washington,D.C.

28

TABLE 1 SAMPLE HOUSEHOLD (PER CAP) INCOME: 1986-7 AND 1990-1, NOMINAL AND ADJUSTED FOR INFLATION

1986-7* 1990-1 90-1 Deflated** % Difference

Total Sample 93.36 219.78 117.65 +26%

Btm. Income Quartile 1 37.49 58.63 31.39 -16%

Income Quartile 2 64.49 107.90 57.76 -10%

Income Quartile 3 87.66 174.81 93.78 +7%

Top Income Quartile 4 184.56 538.75 288.39 +56%

* The 1986-7 data were for a 10 month period; these have been converted to a 12 month figureto make them comparable to the 1990 data for the purposes of this table.

** A deflator of .5353 is based on the change in Zomba C.P.I. from 160.6 in 1987 (on a baseof 100 in 1984) to 300 in 1991.

29

TABLE 2 INCOME SOURCES AS % OF TOTAL HOUSEHOLD INCOME FOR INCOME QUARTILES, 1986-7 TO 1990-1

Total Sample 1st Quartile 2nd Quartile 3rd Quartile 4th Quartile

Sources 90-1 86-7 90-1 86-7 90-1 86-7 90-1 86-7 90-1 86-7

All Food Crops 16.2 17.1 12.6 19.1 17.3 16.6 18.1 18.2 16.5 14.4

maize 6.6 3.3 4.6 5.3 8.2 2.3 5.5 3.1 8.0 2.4

roots 0.6 0.7 0.5 0.3 0.1 1.0 0.9 0.9 0.9 0.6

pulses 1.6 4.6 0.7 4.5 1.8 5.0 2.8 4.7 1.0 4.0

vegetables 5.5 5.5 5.0 5.9 5.0 5.1 7.6 7.0 4.4 4.1

other 1.9 3.1 1.8 3.1 2.1 3.2 1.4 2.6 2.2 3.2

Tobacco 11.0 4.7 1.4 2.0 5.1 3.4 8.4 4.3 29.0 9.2

Non-Crop Agric. 8.0 8.1 7.4 9.2 7.5 8.1 10.4 7.5 6.8 7.5a

Self Employment 5.5 7.6 3.4 6.4 7.3 6.1 4.6 9.6 6.8 8.3

Agric. Wages 5.8 7.5 10.7 6.9 6.8 11.0 4.0 6.8 1.6 5.3

Non-Agric. Wages 4.7 3.7 3.8 2.2 5.6 4.6 6.0 4.5 3.5 3.5

Gifts 10.2 10.0 12.7 11.1 10.6 8.5 10.3 10.8 7.3 9.8b

Loan/Repayment 3.0 3.7 1.7 2.4 3.1 3.8 3.4 3.6 3.9 4.8

Remittances 3.5 5.1 6.5 6.1 2.2 5.3 4.7 2.3 0.4 6.7c

Rent, Pension, etc. 0.9 0.4 0.2 0 0.8 0 0.2 0 2.4 1.7

Sale of Hhd. Assets 0.3 -- 0.7 -- 0.4 -- 0.1 -- 0.1 --

Home Consumption 30.8 32.1 38.3 34.6 33.6 32.6 29.8 32.4 21.8 28.8d

Notes: Includes livestock, poultry, beers, processed foods. Most from adult children employed elsewherea b

Most from husbands working elsewhere The value of maize retained for own consumption.c d

30

TABLE 3 COMPARISON OF MAIZE HARVEST, SALES, PURCHASES AND TOTAL HOUSEHOLDSUPPLY (KG PER CAPITA) AND PERCENT OF BUDGET EXPENDED ON MAIZE BYINCOME QUARTILES

IQ1=btm IQ2 IQ3 IQ4

Mz Harvest 1986/7 73.2 110.9 146.1 258.9

1990/1 86.8 152.9 228.6 408.3

Mz Sales 1886/7 8.5 3.6 8.5 17.2

1990/1 4.7 17.4 28.4 89.9

Mz Purchases 1986/7 22.8 32.4 34.6 36.8

1990/1 16.9 26.1 29.6 24.7

Total Mz 1986/7 87.4 139.6 172.3 278.4

1990/1 99.0 161.5 229.8 343.1

Signif. (T Test) 0.1815 0.0784 0.0012* 0.1386

% Cash Budget 1986/7 25 23 19 13

Spent on Maize 1990/1 36 24 19 9

31

TABLE 4 MAIZE PRICES, NOMINAL AND REAL (TAMBALA PER KG)

ADMARC LOCAL MARKETS

Consumer Producer Consumer Producer

1986 20 12.2 20 16

1990 Nominal 36 27 47 22

Real* 19 14.5 26.2 11

* Deflator of 0.5353 based on CPI (see text and Table 1)

32

1. It was also a replication of an earlier pattern. The colonial economy was very much structured

as a dual economy with the marketing boards, forerunners of ADMARC, operating largely in the

interests of the estates to the disadvantage of the "native" sector (see, for example, McCracken

1983 on the Native Tobacco Board).

2. Kaluwa points out that the gains are2. modest and warns particularly on the implications of the

large debt burden carried by the country and the need for continued "massive financial inflows"

(p.2).

3. The infant mortality rate was 136.4 in the period 1978-1982 and 134.3 1988-1992 (World

Bank, 1996). Data from the national survey (NSSA) for 1980/1 showed 56% of children under six

years old were stunted, a proportion also found in several detailed local surveys, including the one

reported on in this paper. The most recent figure for stunting, based on 1992 national data, is

49% (World Bank 1996).

4. In order to apply for a tobacco quota, one had to have title to leasehold (or freehold) land.

This regulation thus essentially restricted burley production to estates.

5. Interviewers lived in each of the six village clusters in the area (approximately 15 by 12 miles

total), and were visited every one to two days by a graduate student assistant and periodically by

myself. I carried out the ethnographic and oral historical research with an assistant and lived in

one of the study villages.

NOTES

33

6. The terms "small" and "large" were used in the selection process with villagers in an effort to

select the sample before measuring the fields. Subsequently, the fields were measured and we

found that people's own representations of the size of landholdings are mostly inaccurate as to

precise measurement but usually adequate for assessing relative size. The field measurement

showed that the resulting sample includes families from a wide range of landholdings, from under

half a hectare to over three.

7. The two "missing" months in the first round were August and September. Because these were

after the main harvests and before the next planting season, their loss was less problematic than

other months (though obviously not optimal). The 1986/7 study was funded with a grant from

AID/PPC/PDPR, Washington, and conducted in collaboration with Guillermo Herrera of the

Harvard School of Public Health and with the assistance of Thomas Randolph, then doing

graduate work in Cornell. The 1990/1 study was funded with a grant from AID/Malawi,

supplemented by the World Bank, and conducted with the assistance of Peter Walker, then at

Harvard and currently a graduate student at Berkeley. The author of the paper bears full

responsibility for the analysis and the conclusions do not necessarily reflect those of the funding

agencies, home institution, or collaborators.

8. The overall distribution in both years was 13% had less than 0.7 ha, 52% between 0.7 and 1.5

ha, and 35% more than 1.5 ha. This compares with figures given in the Government of Malawi's

"Statement of Development Policies, 1987--1996" of 35%, 40% and 25% for the respective land

categories.

34

9. Information on both income and expenditures was collected from all the adults who were

responsible for managing a household. The quality of the data is very high, due to the monthly

collection method, coverage of all adult earners, and the fact that the interviewers resided in the

villages and, hence, became very knowledgeable about what people were doing. As a result, we

do not use expenditures as a proxy for income but use each independently.

10. The Zomba data also show the same skewed distribution as the sites in other regions

surveyed by Smale et al., with a positive association between hybrid maize production (as well as

membership of a credit club) and landholding size, income, and the presence of a male "head of

household".

11. This same pattern was been found subsequently in visits during 1993 and 1994. This year

(1995), for the first time, the pattern appears to be changing, but analysis remains for a future

paper.

12. The local market prices were collected monthly during both periods of research in the three

main local markets in the research area. There are no other sources of local prices and I therefore

have no data for the years between 1987 and 1990. It is only in the past year that efforts are being

made by government offices to collect local market prices for key foodstuffs.

13. There were few changes in the following seasons. A recent visit (in 1995) showed more

stores were selling maize in the deficit months, though still in far smaller quantities than the local

35

demand for maize, and than the sales by ADMARC. This is under current study.

14. A critical part of this strategy is the different storage quality of maize varieties: the surplus

farmers sell most of their hybrid maize soon after harvest but store "local" varieties for the deficit

months for food, sale, and for compensating workers. This cannot be discussed further here.

15. The 1990-1 average was 86% of available maize, compared with 70% in 1986-7.

16. There was no significant improvement or deterioration in the mean nutritional status of

children as measured by anthropometry between the two rounds. In both years, approximately

56% of children under six years of age were moderately stunted.