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Abstract

National food security in Malawi depends on improving the performance of maize markets. Ensuring that grain is consistently available at tolerable prices is crucial for consumers’ food security. At the same time, surplus producing farmers need to receive farm-gate prices consistently above production costs to intensify the use of fertilizer and other productivity enhancing technologies in a sustainable manner. These concerns give rise to the classic food price dilemma for policy makers in Malawi: how to keep prices low enough to ensure low income consumers’ access to food while keeping prices high enough to promote farm production incentives. These tensions cannot be avoided but they can be relieved through reducing food marketing margins, which shrink the wedge between producer and consumer prices. Moreover, Malawi faces major political and economic problems associated with food price instability especially given its dependence on rain fed agriculture in a region prone to drought. These issues show that improving the performance of maize markets is at the core of achieving sustainable food security and poverty reduction in Malawi.

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