Impact Of Agricultural Market Reforms On Smallholder Farmers In ...

which as we mentioned earlier, is a significant source of income for farmers in
Malawi.
Seed use
Figure 5.7 shows the percentage of households that use different types of seeds. Most
households use their own seeds (85 percent), about a half purchase hybrid seeds, and around 40
percent purchase local seeds. The average application rate for seeds is 10 kg/ha for hybrid,
14kg/ha for local, and 66 kg/ha for own seeds. The most important hybrid seed used is maize.
The purchase of hybrid seeds is broken down by the different household categories. While 55
percent of male-headed households purchased hybrid seeds, about 41 percent of female-headed
households did. Purchase of hybrid seeds is also higher in the North (60 percent) compared with
the Center (57 percent) and the South (43 percent). As shown in Figures 5.8 and 5.9, the use of
hybrid seeds increases with both farm size and expenditures levels.
Fertilizer and seed sources
Following the liberalization of fertilizer and seed markets in 1994/1995, several local and
international companies started to distribute fertilizers and seeds in Malawi, including
multinationals such as Norsk-Hydro and Cargill. However, the most important source of inputs
in general remains ADMARC. The survey data indicate that 42 percent of input purchases are
made from ADMARC, 27 percent from other farmers, 18 percent from traders, and 13 percent
from private companies. Traders and private companies are more important sources of input for
farmers with smaller farm sizes, whereas larger and richer farmers tend to use ADMARC more
frequently. Other farmers are important sources of inputs to small and poor farmers. The
disaggregation of these percentages by type of input are presented in Tables 5.17 and 5.18. These
tables reveal that for fertilizers, ADMARC remains the major supplier, whereas for seeds, other
farmers and traders are more important sources.
Overall, about 90 percent of all inputs are purchased in cash. Most seed purchases are made in
cash, except for coffee and tobacco seeds where 25 percent and 9 percent of purchases are made
on credit respectively. Depending on the type of fertilizer used, two-third to four-fifths of all
fertilizer purchases are made in cash and between one-fifth and one-third are made on credit. The
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