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Abstract
Agricultural commercialization, or the transition from food to cash crops, has gained
increasing attention over the past few decades. Plans for developing world farmers to focus
on labor-intensive cash crops, to exploit their natural comparative advantage, typically
depend on stable food markets to supply these formerly subsistence households. The
trade-off between cash and food crop production requires reevaluation in the context of
numerous food price spikes and general food price increases experienced globally over the
last decade.
Discovery of a correlation between Malawian cash crop production and low nutritional
health outcomes creates questions of the traditional development path. This paper clarifies
the causal effect behind that negative relationship. A nationally representative data set
and the 2002-2003 Malawian domestic food crisis allow for time-specific comparisons
between the health of children in utero during stable and increasing food price markets.
Identifying children exposed to in utero food shocks is the first step to explaining the recent
changes in the nutritional outcomes of cash crop producers.
Estimates of the effects of Malawian crop adoption on children’s health are obtained
using robust inference techniques. The causal effects of cash crop production are identified
by instrumenting endogenous adoption decisions with predetermined variables. The
findings show children of cash crop farmers experienced disproportionately negative
effects if they were in utero during the food price shock. The results support the argument
that food price shocks negatively influence those more reliant on the market for food
purchases, suggesting the need for targeting small scale commercial farmers during times
of staple food price spikes.