Socioeconomic Assessment of Pigeonpea and Groundnut Production Conditions – Farmer Technology Choice, Market Linkages, Institutions and Poverty in Rural Malawi. Market Institution and Policy Research Report no.6

The Food and Agriculture Organization (FAO) of the United Nations (2008) reports that about 850 million people worldwide went hungry each year from the years 2002 to 2007. Furthermore, the United Nations (2008) reports, as the international financial crisis deepens, for the first time in history, one billion people were expected to go hungry in 2009. Agricultural growth is said to be the most effective means of addressing poverty. Consistent with this notion, the Department for International Development (2003) estimated that a 1% increase in agricultural productivity could reduce the percentage of poor people living on less than 1 dollar a day by between 0.6 and 2 percent. No other economic activity generates the same benefit for the poor. \nIn Malawi, agriculture remains an important component of the economy; employing 85 percent of the labor force, accounting for about 39% of the Gross Domestic Product (GDP) and 83% of Malawi’s foreign exchange earnings (Chirwa 2007). The agricultural sector is subdivided into sub-sectors; estates and smallholder farmers. The latter accounts for 78% of the cultivated land and generates about 75% of Malawi’s total agricultural output, suggesting that Malawi’s agriculture is largely smallholder agriculture. \nMore than 72% of the smallholder farms are less than one hectare, a size too small to achieve food self sufficiency at the household level with the current rudimentary farming methods. This notion is consistent with the Benin et al.(2008) report, that Malawi is the third most densely populated country in mainland sub-Saharan Africa (at 2.3 rural people per hectare of agricultural land) after Rwanda (3.8 people per hectare) and Burundi (2.7 people per hectare). Such small land holdings are a serious challenge to the transformation of Malawi’s agriculture. \nThe principal crops grown in Malawi are maize, tea, sugarcane, groundnut, cotton...........