Recent changes in markets and market relationships and lessons for the design of effective support programmes - Institutional Constraints to Small Farmer Development in Southern Africa - page 258

Holistic strategies that seek to boost food production and efficient distribution through
well planned marketing systems remain the cornerstone of efforts to eradicate poverty in
developing countries. Policy has tended to put emphasis on maximising food production
as a way of ensuring food self-sufficiency among the poor, while less focus is given to
distributional functions like product marketing. It cannot go unnoticed that effort by the
International Monetary Fund and the World Bank in the 1980s and 1990s to increase
market participation by developing countries, through Structural Adjustment Programmes
(SAPs) for instance, had wide ranging impacts. Markets in third world economies are
generally controlled and hence Structural Adjustment Programmes recommended trade
liberalisation, reduction of government subsidies/expenditure and adoption of free
exchange rate policies. Though a few countries like Uganda and Mozambique experienced
positive improvements due to these Structural Adjustment Programmes (SAPs), some
countries like Zambia, Zimbabwe and Kenya had to battle to reverse the negative effects of
the SAPs. The food security situation in developing countries has not changed significantly
inspite of the WB and IMF policy prescriptions, instead some countries have worsened.
Policy makers believe that liberalisation has led to substantial increase in prices of food
crops, associated with high volatility of prices, which introduced some level of uncertainty
in farm planning and management (Chirwa, 2006).
Malawi's experience can be used to illustrate some of the interesting outcomes of the SAP
and how land ownership patterns play a role. The liberalisation of agricultural produce
marketing in Malawi resulted in the declining importance of Agricultural Development
and Marketing Corporation (ADMARC), which is a government agency (Chirwa, 2006),
and attracted private traders in the marketing of smallholder agricultural produce in the
sector (Fafchamps and Gabre-Madhin, 2001; Chirwa, 2006). The Malawian maize case
is very important in explaining smallholder market dynamics within staple food markets.
Chirwa (2006) also observed that the extent of maize sales in Malawi is positively associated
with increasing land holding sizes, and that those whose maize failed had the lowest land
holding size. The significance of landownership is emphasized, where land hunger has
caused instability in Zimbabwe and still remains a hot issue in most other countries like
Namibia and South Africa.
In recent years, and especially after the inception of political instability and agricultural
reform programme in Zimbabwe in 2000, South Africa became the only reliable exporter
of white maize in the Southern African region ( Jayne et al. , 2006). Although Mozambique,
Zambia, and Malawi produce white maize surpluses, these surpluses are usually depleted
halfway through the marketing year ( Jayne et al. , 2006), leaving both urban and rural maize
deficit regions increasingly dependent on South Africa for their residual national white
maize requirements. Drawing on FAOSTAT data, Jayne et al. (2006) indicated that 92%
of the white maize imports to Malawi, Zambia, and Mozambique have been coming from
South Africa since 1998. While formal trading of grain is through marketing boards in most