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pps9

ILO/SAMATPolicyPaperNo.9

Agriculture,EmploymentandPovertyinMalawi

ThandikaMkandawire

InternationalLabourOrganization

SouthernAfricaMultidisciplinaryAdvisoryTeam（ILO/SAMAT）

Harare,Zimbabwe

1999

CopyrightandISBNpage

ILO/SAMATPolicyPaperSeries

1.LabourStandardsinExportProcessingZones:

ASouthernAfricanPerspective

JoostKooijmans,DavidTajgmanandAurelioParisotto,1996

2.ShapingaLabourMarketBasedTrainingPolicyforLesotho

TorkelAlfthanandTheoSparreboom,1997

3.TheSocialProtectionofMigrantWorkersinSouthAfrica

ElaineFultzandBodhiPieris,1997

4.LabourMigrationtoSouthAfricainthe1990s

ILO/SAMAT,1998

5.IndustrialRelationsinSouthernAfrica:

TheChallengeofChange

TayoFashoyin,1998

6.DefinitionsandLegalProvisionsonChildLabourinSouthernAfrica

JoostKooijmans,1998

7.EmploymentInjurySchemesinSouthernAfrica:

AnOverviewandProposalsforFutureDirections

ElaineFultzandBodhiPieris,1998

8.OccupationalHealthandSafetyinSouthernAfrica:

TrendsandPolicyIssues

ReneLoewenson,1999

9.Agriculture,EmploymentandPovertyinMalawi

ThandikaMkandawire,1999

Preface

IampleasedtopresentthislatestcontributiontotheSAMATPolicyPaperSeriesentitled‘Agriculture,EmploymentandPovertyinMalawi’.ThispaperwaspreparedinthecontextofalargerexercisethatstudiedthechallengesofpromotingproductivejobsinMalawi.

TheobjectiveofthispaperistoreviewtheevolutionofagricultureinMalawiinahistoricalperspectiveandconsiderpolicymeasuresthathaverecentlybeeneffected,oroptionsthatareavailabletopromotegrowthandequityintheruralsector.Theauthoremphasises,inparticular,theneedforlandreform,improvementsinproductivity,diversification,andavarietyofothertypesofreformsaswellasconditionsunderwhichsuchreformsarelikelytoleadtodesiredoutcomes.

SAMATPolicyPapersfocusonpoliciesandstrategiesthatarepursuedanddevelopedinSouthernAfricawhichaffectlabourstandards,employment,andotherlabourissues.TheseriesisintendedtoprovideanILOperspectiveonsuchissues,withaviewtosuggestingideasandalternativesthatcanbetakenintoaccountbypolicymakersinthefieldsoflabouranddevelopment.Inthisway,thePolicyPapersaimtoprovideabasisfortechnicalcooperationbetweentheILOanditsconstituentsinsouthernAfrica.

ThispaperwaspreparedbyDr.ThandikaMkandawire,Director,UnitedNationsResearchInstituteforSocialdevelopment,Geneva,Switzerland.

PeterPeek,

Director,

ILO/SAMAT

Tableofcontents

Prefaceiv

1.Resourcebase1

1.1Humanresources1

1.2Naturalresources1

2.Historicaloverviewofpolicies2

2.1Labourreservesyndrome2

2.2Promotionofestateagriculture4

2.2.1Landpolicy4

2.2.2Commoditymarketsandsurplusextraction6

2.2.3Labourmarkets6

2.2.4Tenancysystem8

2.2.5Finance9

2.2.6Politicalregimentation9

2.2.7Taxregime9

2.3Effects9

2.4Smallholdersector10

3.Economicperformance11

3.1Overallgrowth11

3.2Socialperformanceandhumanresources14

4.NewGovernmentinitiatives14

4.1Eliminationofinstitutionalconstraints14

4.2Productivityenhancement17

4.3Irrigation17

4.4Directedcreditandsubsidies18

4.5Urbanemploymentandtheinformalsector21

5.Recommendations22

5.1Responsivenessofpovertytogrowth23

5.2Landreform24

5.3Improvementinproductivity24

5.4Diversification25

5.5Marketingreforms26

5.6Non-farmactivities27

5.7Urbanizationandurbanemployment28

5.8Humancapital29

5.9Labourmarketsandminimumwages29

5.10Furtherinstitutionalreforms31

5.11Theroleofwomen31

Bibliography33

Listoftables

1.Numberofestatesandhectarage,1970-895

2.Changesinthenatureoflandholding,1967-885

3.Estimatesoflandutilizationonestates5

4.Landuse6

5.Formalsectorwageemployment7

6.Sizedistributionofsmallholdingsandproportionplantedtohybrid12

7.Householdbylandholdingsizeandfertiliseruse12

8.SourcesofagriculturalgrowthinMalawi,1973-9613

9.Agriculturalproductionbyprincipalcrops,1993-9715

10.MalnutritionindicatorsinMalawiandselectedotherAfricancountries15

ListofFigures

1.Realminimumwagesinruralandurbanareas,1970-928

2.Agriculturallabourproductivity,1962-9312

3.SectoralsharesinagriculturalGDP,1973-9213

4.Nutrientsonsmallholdermaize21

5.UrbanizationinAfrica22

AgricultureplaysanimportantroleintheeconomyofMalawi.Eighty-fivepercentoftheeconomicallyactivepopulationisinagriculture,35percentoftheGDPstemsfromthissector,and90percentofforeignexchangeearningsareduetoagriculturalexports.Moresignificantlyforthisstudy,agriculturesupplieslabourtothenon-agriculturalsectorandbasicallydeterminesitsreservationpriceoflabour.Consequently,itisimpossibletodevisesustainableemploymentandwagepoliciesinthenon-agriculturalsectorwithouttakingfullaccountofdevelopmentsinagriculture.

1.Resourcebase

1.1Humanresources

MalawiisoneofthemostdenselypopulatedcountriesinAfricawithanestimateddensityof90personspersquarekilometre.Thisnationalaverageconcealssharpdistrictandregionalvariations.ThepopulationishighlyconcentratedintheSouthernRegion,whichaccountsforaround50percentofthepopulation.TheCentreandtheNorthhave39and11percent,respectively.SomedistrictsintheSouthernandCentralregionsrecorddensitiesofbetween260-460personspersquarekilometre.Ontheotherhand,inNorthRumphithedensityisonly16.Thegrowthrateofthepopulation–estimatedat3.5percentperannum–remainshigh.Some85percentofthepopulationliveinruralareas,makingMalawioneoftheleasturbanizedcountriesinAfrica.

Thelabourforceparticipationrate–theproportionofthepopulationthatiseconomicallyactive–was43percentin1987.Onlyasmallpercentageofthelabourforceisemployedintheformalsectoraswagelabourersortenants.Significantly,andunusuallyforanAfricancountry,theoverwhelmingmajorityofwagelabourersortenantsisinagriculture.

Becauseoftheneglectofprimacyeducationandadultliteracy,Malawihashighlevelsofilliteracy.Forty-threepercentoftheadultpopulationisilliterate.Adultilliteracyamongwomenis,at58percent,evenhigher（UNDP,1997）.

1.2Naturalresources

AlthoughanumberofmineralsareknowntoexistinMalawi,miningconstitutesanegligibleactivity,atleastwhencomparedtomostofherSouthernAfricanneighbours.

Thereisconsiderablecontroversyoverhowmuchlandisarableand,evenmoresharply,overhowmuchofthearablelandisutilizedorunder-utilized.Althoughtherehasbeensignificantdegradationoffertilityovertheyears,thesoilsinMalawiareconsideredfairlygoodandallowforthecultivationofawiderangeofcrops.However,populationdensitiesandfarmingpractices（especiallythecuttingdownofwoodforcuringtobacco）threatenthefertilityofsoilsasdeforestation.

AdefininggeographicalfeatureofMalawiisLakeMalawi.AndyetMalawianagricultureisheavilydependentonrainfall,asourceofvulnerabilitybroughthomebyrecentdroughts.Malawihasanestimated290,000haofpotentiallyirrigableland.Only25,000haofthistotalareirrigated,mostlyintheestatesectorandmainlyforsugar.Thepotentialofirrigationissuggestedbythefactthatthisirrigatedlandalreadyaccountsforcloseto10percentofthecountry’sexports.

Malawiisalandlockedcountry.Thisfactplacesapremiumonhighvaluedcropstocompensatefortherelativelyhightransportationcoststhecountryfacesandalsoontheimportantrolethatregionalmarketscanserve.Ontheimportside,beinglandlockedarguesforimportsubstitutionorself-sufficiencyinlowvalue,bulkyimports.

2.Historicaloverviewofpolicies

2.1Labourreservesyndrome

OneremarkablefeatureofMalawiwasthatatindependenceneitherpeasantorsmallholderagriculturenorlarge-scalecommercialagricultureweredeveloped,atleastwhencomparedtothesmallholder-basedagricultureofmostWestAfricancountriesorthelarge-scalefarmingofKenyaandthethenSouthernRhodesia（nowZimbabwe）.Manyfactorsaccountedforthislackofdevelopment,someofwhichimpingeonthestructureandperformanceoftheagriculturalsectortothisveryday.

Ontheonehand,wasthelabour“reserve”statusassignedtoruralMalawibothwithrespecttoestatefarminginMalawiandtheSouthernAfricanregionalmarkets.Thismeantthatinsteadofbeingasourceofcashcropproduction,ruralMalawiwastreatedasessentiallythe“reserve”fromwhichestateagricultureinMalawiandtheminesandplantationsinSouthAfricaandthethenRhodesiascoulddrawtheirlabour.Havingacceptedthisstatusfortheruralsectorofthecolony,thecolonialgovernmentwasinnoparticularhurrytodeveloppeasantagricultureuntilmuchlaterinthepost-WorldWarIIerawhen“ColonialDevelopmentandWelfare”programmeswereinitiated.Ontheotherhand,colonialpaternalismandthepeculiaritiesofsettleragricultureinMalawistifledtheexpansionofcommercialagriculture.Caughtbetweenmodelsofpeasant-basedagricultureexportandsettleragriculture,thecolonialauthoritiessimplyneverresolvedtheproblem.TheconsequencewasapoorlydevelopedWhitesettlercommercialfarmingandasubsistenceeconomywhosemonetizationwaslargelybasedonremittancesfromworkersinSouthAfricaandtheminesinthetwoRhodesias.

Policypronouncementsbythenationalistswereclearontheneedforstimulatingpeasantagricultureifproblemsofpover