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A comparative value chain analysis of burley tobacco in Malawi - 2003/04 and 2009/10

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  • Prowse, Martin
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    Abstract

    This article conducts a value chain analysis of smallholder burley tobacco production in Malawi for the 2003/04 and 2009/10 agricultural seasons. The comparison suggests in 2003/04 smallholder profits from growing burley were limited by two main factors: first, the practices of leaf merchant companies on the auction floors who operated as a cartel (and governed the burley supply thread); and secondly, by inefficient marketing arrangements. By the 2009/10 season the rents, governance and systemic efficiency within the supply thread had changed considerably: there was greater competition on the auction floors largely due to direct state intervention (which increased growers' net margins in nominal terms), improvements in marketing arrangements, tighter state regulation (including the introduction of minimum prices for grades of burley) and increased systemic efficiency (through a rapid expansion of contract farming). The article concludes by highlighting some of the opportunities and threats that this form of vertical integration poses smallholder growers.

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    Bibliographic Info

    Paper provided by Universiteit Antwerpen, Institute of Development Policy and Management (IOB) in its series IOB Working Papers with number 2011.09.

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    Length: 49 pages
    Date of creation: Nov 2011
    Date of revision:
    Handle: RePEc:iob:wpaper:2011009

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    1. Zeller, Manfred & Diagne, Aliou & Mataya, Charles, 1998. "Market access by smallholder farmers in Malawi: implications for technology adoption, agricultural productivity and crop income," Agricultural Economics, Blackwell, vol. 19(1-2), pages 219-229, September.
    2. Negri, Mariano & Porto, Guido G., 2008. "Burley tobacco clubs in Malawi : nonmarket institutions for exports," Policy Research Working Paper Series 4561, The World Bank.
    3. Diagne, Aliou & Zeller, Manfred, 2001. "Access to credit and its impact on welfare in Malawi:," Research reports 116, International Food Policy Research Institute (IFPRI).
    4. Reardon, Thomas & Barrett, Christopher B. & Berdegué, Julio A. & Swinnen, Johan F.M., 2009. "Agrifood Industry Transformation and Small Farmers in Developing Countries," World Development, Elsevier, vol. 37(11), pages 1717-1727, November.
    5. Barrientos, Stephanie & Dolan, Catherine & Tallontire, Anne, 2003. "A Gendered Value Chain Approach to Codes of Conduct in African Horticulture," World Development, Elsevier, vol. 31(9), pages 1511-1526, September.
    6. S. Illeris & G. Akehurst, 2001. "Introduction," The Service Industries Journal, Taylor & Francis Journals, vol. 21(1), pages 1-4, January.
    7. Giovannucci, Daniele & Purcell, Timothy, 2008. "Standards and Agricultural Trade in Asia," MPRA Paper 13550, University Library of Munich, Germany.
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