Market Liberalization Policy In Malawi

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Food self-sufficiency has always been on the top of the agenda for the government of Malawi. Maize is the country’s main staple food. Thus maize production and productivity levels are critical to ensuring that the country is food self-sufficient. The Malawian Government has focused on access to food for the whole population. To this end, the Government maintains some level of protection on maize trade in order to influence production and market decisions. However, the role of agricultural markets in influencing allocative efficiency cannot be underestimated. The Agricultural sector in Malawi remains vital to the Malawian economy, contributing about 27% to GDP (International Monetary Fund, 2012). The significance of the agricultural sector to…show more content…
These policies required the government to remove restrictions on private sector participation in agricultural marketing and trade. The rationale of Market Liberalization policies was that opening up agricultural markets would increase market entry and investment in agricultural markets thereby inducing competition and allowing efficient markets to emerge (Delgado Christopher, Gabre-Madhin, Minot, & Johnson, 2002, pp 1). It is important to understand whether the implementation of market liberalization policies have indeed contributed to the emergence of efficient maize markets in…show more content…
The study of market integration is important for several reasons. Firstly, understanding long-run relationships among spatially separated markets helps us evaluate the effectiveness of policies aimed at improving market performance. Specifically, market integration studies provide information on the magnitude, the speed, and the direction of price transmission. This information is useful for context- specific policy design and implementation. Previous studies have attempted to answer the broad question of the impact of market liberalization studies on market integration (for example, Goletti and Babu (1994); Ephraim Wadonda Chirwa (1999)). Both studies have concluded that structural adjustment programs have led to greater market integration. The aim of this paper is to expand on previous findings by studying a longer duration specifically focusing on how market performance has improved in the post reform period. However, the study of reforms for the Malawian agricultural sectors is confounded by a number of factors, these include: the government’s tendency for policy reversals, and the complexity of factors that affect the outcome so that it is difficult to isolate the effect of particular reforms from other processes affecting the broader economy(Jayne & Jones, 1997). Nevertheless, the understanding and isolation of individual policy effects is key to better policies and interventions, and why research on this

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