Production and Marketing of Smallholder Tobacco: Effect on Household Food Security, Nutritional Status and Intra-household

Abstract

The underlying analysis in this paper is based on the data that were collected through the International Food Policy Research Institute (IFPRI) University of Malawi, Bunda College Rural Financial Market Study. The study was conducted during the 1994/95 and 1995/96 agricultural seasons. The objective was to assess the impact of access to agricultural credit on food security among smallholder farmers in Malawi. The analytical framework was based on estimating a recursive model to assess the effect of tobacco production and marketing on household welfare variables such as income, expenditure patterns, household food security and labour allocation.The results indicate that while the growing and marketing of tobacco has a positive and significant effect on household income, except for investments in dwelling units and agricultural equipment, there are no significant differences in household welfare variables between tobacco growers and non-growers. Smallholder farmers are unlikely to benefit from tobacco. Amongst smallholder farmers, tobacco income is only earned during the selling season and due to lack of savings, this income is unable to support the households evenly throughout the year. The level of income earned depends on the market channel that is used. This study has established that the auction market is the most viable. However, due to access problems and the urgent need for cash, most smallholder farmers end up selling their entire crop to estates or intermediate buyers at lower prices. Thus there is need to promote collective action among smallholder farmers to ensure that they sell most of their crop at the action floors. This will not only improve the prices they get but will also make savings mobilization easier.

UNISWA Research Journal of Agriculture, Science and Technology Vol. 4 (1) 2000: pp 83-92