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Agricultural growth and investment options for poverty reduction in Malawi:

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Author Info

  • Benin, Samuel
  • Thurlow, James
  • Diao, Xinshen
  • McCool, Christen
  • Simtowe, Franklin

Abstract

"Malawi has experienced modest economic growth over the last decade and a half. However, agricultural growth has been particularly erratic, and while the incidence of poverty has declined, it still remains high. The Malawian government, within the framework of the Agricultural Development Plan (ADP), is in the process of implementing the Comprehensive Africa Agriculture Development Programme (CAADP), which provides an integrated framework of development priorities aimed at restoring agricultural growth, rural development and food security. This paper analyzes agricultural growth and investment options that can support the development of a comprehensive agricultural development strategy consistent with the principles and objectives of the CAADP, which include achieving six percent agricultural growth and allocating at least ten percent of budgetary resources to the sector. Economic modeling results indicate that it is possible for Malawi to reach the CAADP target of six percent agricultural growth. However, achievement of these goals will require additional growth in most crops and agricultural sub-sectors, meaning that Malawi cannot rely solely on growth in maize or tobacco to reach this growth target. Broader-based agricultural growth, including growth in pulses and horticultural crops, will be important if this target is to be achieved. So, too, is meeting the Maputo declaration of spending at least ten percent of the government's total budget on agriculture. In fact, even under a more optimistic and efficient spending scenario, the Government of Malawi must increase its spending on agriculture in real value terms by about 20 percent per year between 2006 and 2015, and account for at least 24 percent of its total expenditure by 2015 if the CAADP goals are to be met. Although agriculture has strong linkages to the rest of the economy, with agricultural growth typically resulting in substantial overall growth in the economy and rising incomes in rural and urban areas, simply achieving the CAADP target of six percent will not be sufficient to halve poverty by 2015, i.e. achieving the first Millennium Development Goal (MDG1). To achieve this more ambitious target, agriculture and non-agriculture would need an average annual growth rate above seven percent. This growth requirement is substantial, as is the associated resource requirements, indicating that the MDG1 target may be beyond reach. However, achieving the CAADP target should remain a priority, as this goal has more reasonable growth and expenditure requirements, and will substantially reduce the number of people living below the poverty line by 2015 and significantly improve the well-being of both rural and urban households." from authors' abstract

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Bibliographic Info

Paper provided by International Food Policy Research Institute (IFPRI) in its series IFPRI discussion papers with number 794.

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Date of creation: 2008
Date of revision:
Handle: RePEc:fpr:ifprid:794

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Related research

Keywords: Agriculture; GDP; Poverty; Public investment; MDGs; Development strategies;

This paper has been announced in the following NEP Reports:

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Citations

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Cited by:
  1. Omilola, Babatunde & Lambert, Melissa, 2010. "Weathering the storm," IFPRI discussion papers 965, International Food Policy Research Institute (IFPRI).
  2. Renkow, Mitch, 2010. "Impacts of IFPRI's "priorities for pro-poor public investment" global research program:," Impact assessments 31, International Food Policy Research Institute (IFPRI).
  3. Pauw, Karl & Thurlow, James & van Seventer, Dirk, 2010. "Droughts and floods in Malawi," IFPRI discussion papers 962, International Food Policy Research Institute (IFPRI).
  4. Mathilde Douillet & Antoine Bouët, 2012. "Trade policies and agriculture in Sub-Saharan Africa: Comparative analysis in a Computable General Equilibrium framework," Sciences Po publications info:hdl:2441/45eb019724s, Sciences Po.
  5. Droppelmann, Klaus & Makuwira, Jonathan & Kumwenda, Ian, 2012. "All eggs in one basket : A reflection on Malawi’s dependence on agricultural growth strategy," IFPRI discussion papers 1177, International Food Policy Research Institute (IFPRI).
  6. Douillet, Mathilde, 2012. "Trade and agricultural policies in Malawi: Not all policy reform is equally good for the poor," MPRA Paper 40948, University Library of Munich, Germany.

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