Under what policy and market conditions will Malawi’s smallholder farmers switch from tobacco to soyabean?
This policy note (PDF) by the IFPRI Malawi Strategy Support Program (MaSSP) explores key findings from a farm-level analysis of smallholders’ crop choice under different policy and risk scenarios. Smallholder farmers planting decisions are examined for five major crops – maize, tobacco, common bean, groundnut, and soyabean – using a farm-level risk model. The policy scenarios include: (a) reducing the volatility of farm gate soyabean prices by 25 percent; and (b) introducing a loan package for soyabean inputs. These simulations were conducted both without and in the presence of a loan package for tobacco inputs. Malawi has the potential to reorient its smallholder agriculture away from being primarily directed towards assuring household subsistence and self-sufficiency to increased commercial production, including of soybean. This study shows how this shift would reduce the country’s reliance on tobacco and diversify its agricultural production and exports. As a legume, furthermore, soybean would also have the additional benefit of improving soil health, through biological nitrogen fixation and crop rotations, and child nutrition, if the nutritious soybean is consumed at home or increased income from soybean sales is used to provide children with more diverse and healthier diets. But this reorientation will require that government creates the conditions for private sector to invest in the increased production of soyabean, both through the support of input loan packages and a more stable marketing environment for the crop.