This research examines the extent of market integration among different bean markets across Malawi. Market integration is an indicator that efficiency exists within the flow of information between markets. The study focused on beans as they are a cheap source of protein affordable by the majority of rural smallholder farmers. Market price data for beans was obtained from the Ministry of Agriculture and Food Security and covered the period 1995 to 2011. The markets included in the study are Chitipa, Rumphi, Mzuzu, Lilongwe, Mitundu, Lizulu, Lunzu, Luchenza, and Bangula. Like prices of other agricultural crops, bean prices follow a general seasonal pattern, rising with increasing time since the last harvest and decreasing during the harvest period. Bean prices typically peak in December when bean supply to the market is low. The research results show that beans prices in different markets move in the same direction, meaning that the markets are co-integrated. However, price information is not fully transmitted between markets. Transaction costs were found to be higher in markets which are far away from major cities and in those markets serviced by poor roads. Based on the results, the study recommends the need to improve infrastructure and market information systems to enhance bean market efficiency in Malawi.

The government of Malawi in 2004 initiated an ICT-based Malawi Agricultural Commodity Exchange, a market information service project, to improve access by farmers to market information. MACE was intended to improve the efficiency of agricultural markets as part of the strategy to improve food security. This study uses quantitative methods to examine whether MACE has contributed to efficiency of rice markets in Malawi. It especially tests if MACE has contributed to spatial integration of rice markets. As hypothesized, the study finds that the tendency of rice prices to move together in spatially separated markets has significantly increased since the implementation of MACE. It concludes that ICT-based market information services project enhances linkages between markets and can therefore improve the efficiency with which agricultural markets perform. The study discusses implications of this finding for policy.

Seasonal analysis of the structure, conduct, and performance (SCP) of markets for staple crops has received relatively little attention in food policy analysis yet it has important implications for food and nutrition security. This study employs a mixed methods approach to analyze the SCP of maize markets in Malawi in the 2018/19 main harvest and lean seasons. We interviewed 749 traders from 74 markets across 8 districts, held 28 focus group discussions (FGD) with a total of 480 farmers and analyzed daily and weekly price data from 13 regional markets. The structure of maize markets was explored by examining marketing channels, barriers to entry and the competitiveness of different tiers of the marketing chain. Inequality in sales revenues, switches in trader types between seasons, quality and weights standardization, and the behavior of traders were used to examine market conduct. Performance was assessed by examining traders’ costs and margins, and the spatial and temporal integration of maize markets. We find that Malawi’s maize market is pyramidal in structure and highly competitive at lower tiers of trade but ‘oligopolistic’ at higher tiers. The market channels vary across seasons with switches between trader types and instances of rural-urban trade reversals. There is considerable inequality of sales revenues among traders of similar capacities, and a widespread lack of structured trading despite existing institutions. A high ratio of marketing costs to revenue suggests marketing inefficiencies. Malawi maize prices were highly seasonal and more volatile than neighboring countries. In contrast to previous studies, our findings show weak spatial integration of markets and slow price adjustments to long-run equilibrium values even among short-distance market pairs. The study highlights five pathways to improving Malawi’s maize marketing system: (1) increased policy predictability to promote private-sector investment; (2) institutionalization of quality grades and standardization of weights and measures; (3) increased commercialization of smallholder maize production; (4) investment in enabling infrastructure; and (5) the promotion of structured trading.

General policy environment; Current status of and reform proposals for agriculture; Effects of domestic policy reforms on food security; Potential for intraregional trade.

Agriculture holds special significance in Malawi, because most Malawian households depend primarily on this sector for income and food security. Therefore, legislation surrounding the agricultural sector, and the foundation it lays for the sector’s governance, are fundamental to the development prospects of the country. At their best, agricultural laws encourage farmers, traders (both domestic and international), and processors of agricultural commodities to fully engage and further invest in the agricultural sector. At their worst, they undermine confidence to do so