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

ADMARC captures another 17 percent, and consumers about 38 percent. The types of crop
buyers, however, vary by crop. Table 5.39 indicates that for maize for example, the most common
buyer is ADMARC, whereas for tobacco, auction floors dominate. It is interesting to note that
the likelihood of sales to ADMARC increases with expenditure and farm size. This indicates that
ADMARC is still more accessible to wealthier and larger farmers.
Location of sale
The location of the sale also varies by the crop, but in general, about 37 percent of all
transactions are conducted in the market, 26 percent on the farm, 18 percent at ADMARC, and 11
percent at the auction floor. Bulky commodities such as tuber crops and vegetables are more
likely to be sold on the farm. Grains are more likely to be sold at the market or ADMARC depots;
while tobacco is more likely to be sold at the auction. Small farmers use various means to
transport their crops to their point of sale market or to ADMARC’s depots. The most common
mean of transport is by foot (34 percent of all transactions), followed by bicycles (17 percent),
animal and cart (12 percent), car and truck (10 percent; mainly to take tobacco to the auction),
and the rest is either not transported or transported by other means. About 57 percent of transport
means are owned and 43 percent are rented. The average distance traveled to sell a crop is 8 km
and the average time it takes to take the crop to the sale point is 1 hour and 15 minutes. Average
transport costs to sale point are 46 MK/km/ton. These numbers indicate that farmers in Malawi
do not have access to a cheap source of transport to sell their crop and that modern transport
means are still not very common. As a result, farmers still travel long distances on foot or by
bicycle to sell their produce.
Farmers were asked about the factors that affect their choice of buyer or sale point. The answers
were split almost 50-50 between “best price offered” and “closest location”. Therefore, both
prices and distance are important in determining sales by small farmers in Malawi. Only 3 percent
cited “pre-established relationship with buyer.” Farmers were also asked whether they are always
able to sell when they want to. Only 18 percent said that they couldn’t. They attributed this to
either because buyers only buy at certain periods (65 percent) or that they can’t store the crop for
long (30 percent). The latter reason applies mainly for tuber crops (such as cassava and sweet
potato) and vegetables. Few farmers (only 10 percent) contract their crop. The crop that are
mostly contracted are cash crops such as tobacco, cotton, chillies, sunflower, and beans. The
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