Trends in Tobacco Production and Prices in Malawi

Ayala Wineman · Lemekezani Kingston Chilora · Thomas S. Jayne

11 citations0/0 files storedNicotine & Tobacco Research

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Agricultural economics and policies Economics of Agriculture and Food Markets Agricultural Innovations and Practices

Abstract

INTRODUCTION: Diversification away from tobacco production has been identified as a priority for Malawi, historically one of the world's most tobacco-reliant countries. METHODS: This paper refers to a nationally representative data set to characterize broad trends in production since 2000 to understand whether Malawi is shifting away from tobacco and how production has changed over time. RESULTS: From 2004 to 2019, the share of Malawian crop farmers producing tobacco fell from 16% to 5%, and tobacco's share of the total value of crop production also declined sharply. Tobacco farms are generally growing larger (in size and scale of production) over time. However, land productivity remains low, with net returns of 93 000 MWK (128 USD) per hectare at the median. Farm-gate prices for tobacco have declined relative to the prices of maize or fertilizer, rendering tobacco a less lucrative avenue to generate the cash income needed to purchase these key items. In addition, the share of the export price received by farmers has also declined over time, with the median farm-gate price representing 32% of the export price in 2004 and 18% in 2019. CONCLUSIONS: In some respects, a transition away from tobacco has already occurred. Additional research is needed to understand why the farm-gate share of tobacco export prices has declined over this period and how the livelihoods of smallholder farm-households that exited tobacco production have been affected. IMPLICATIONS: To the extent that tobacco prices appear to be declining, there is a need to rigorously assess whether farmers have suitable crop alternatives (with established markets) and other livelihood options. Likely, investments are yet needed to foster strong alternatives to tobacco; such investments include research and development in on-farm technologies to raise the productivity of non-tobacco crops, as well as improvements in non-tobacco value chains to reduce transportation costs and promote private investment.

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References

2009Tobacco Companies’ Use of Developing Countries’ Economic Reliance on Tobacco to Lobby Against Global Tobacco Control: The Case of Malawi 2016Costs, revenues and profits: an economic analysis of smallholder tobacco farmer livelihoods in Malawi 2007Global leaf companies control the tobacco market in Malawi 2014Tobacco control and tobacco farming : separating myth from reality 2018From colonisation to globalisation: a history of state capture by the tobacco industry in Malawi 2020Tobacco farming and current debt status among smallholder farmers in Manicaland province in Zimbabwe 2017Tobacco growing and the sustainable development goals, Malawi 2013A history of tobacco production and marketing in Malawi, 1890–2010

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