Malawi’s six-year maize export ban increased consumption but made farmers poorer
Malawi’s six-year maize export ban increased consumption by 6 percent, achieving its objective of increased food security, measured narrowly in terms of availability of maize at lower prices, according to a study by Karl Pauw et al.
But these gains come at a cost to the rural farm sector, which suffered a 0.2 percent decline in agricultural value-added and lowered disposable income levels, especially among poor farmers. Malawi imposed an uninterrupted maize export ban from 2011/12 until the end of 2017.
The ban was instituted through the government regulation of international trade of so-called “strategic crops” through its Control of Goods Act (2015). In there, commodities listed in the act, such as maize, require an export license. So export bans are enforced by withholding licenses, which in practice means formal exports through recognized border posts are affected.
Our results show that policy-induced distortions in the form of export bans or export levies on agricultural commodities create disincentives for farmers to produce, rendering these policies self-defeating and unsustainable in the long run. Moreover, export restrictions can be welfare-reducing and welfare losses tend to be biased against poorer farm households says the study.
It says when short-term political motivations outweigh longer-term socio-economic considerations, adverse effects may be conveniently overlooked by policymakers.
"Our results also highlight a more general concern about uncertain and incoherent agricultural policy environments that prevail in so many Sub-Saharan African countries, namely that they perpetuate a subsistence farming culture rather than encouraging commercial crop cultivation," says the study.
"This has negative consequences for the supply of marketed foods and intermediate inputs required by agro-processing sectors. Ultimately this is inconsistent with the stated economic transformation ambitions of so many African countries, articulated in the case of Malawi in its second Malawi Growth and Development Strategy (MGDS II) as shifting its economy from being a “predominantly importing and consuming economy to a predominantly producing and exporting economy”
In the past decade, more than 30 countries, including virtually all the world’s top grain producers and several southern and eastern African countries have imposed grain export restrictions.
Given the political and socioeconomic importance of maize in Malawi, the export ban has always been a highly sensitive topic, and any advocacy on the matter was done discreetly.