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

CHAPTER 1 - INTRODUCTION
1.1 Backgrounds and Objectives
This report summarizes the findings of a project entitled “Impact of Agricultural Market Reforms
on Smallholder Farmers in Benin and Malawi.” The project was funded by the Bundesministerium
für Wirtschaflitche Zusammenarbeit und Entwicklung (BMZ) and implemented by the
International Food Policy Research Institute (IFPRI) in collaboration with several other research
institutions, including the Laboratoire d’Analyse Régionale et d’Expertise Sociale (LARES) in
Benin, the Agricultural Policy Research Unit (APRU) of the Bunda College of Agriculture in
Malawi, the University of Hohenheim in Germany, and the Center for the Study of African
Economies (CSAE) of Oxford University in the United Kingdom. The project activities started in
June 1998 and ended in February 2001. The final workshop, to be held in both Benin and Malawi,
is scheduled for April 2001.
Through surveys of smallholder farmers, input and output traders, and local markets and
communities, this project is intended to help understand the impacts of recent reforms in the
agricultural sector on traders’ marketing activities, and on the technology adoption, productivity
and income levels of smallholder farmers. According to the original proposal, the project's specific
objectives are: i) to study the impact of adjustment in input distribution and output delivery systems
on technology adoption and production activities of smallholder farmers in Benin and Malawi; and
ii) to analyze the farm household level impact of alternative scenarios of reforming and promoting
local marketing systems.
Both Benin and Malawi undertook extensive reforms of their economy starting in the early to mid
1990s. These reforms have included exchange rate devaluation, elimination of subsidies and price
controls on crops and agricultural inputs, reduction of the role of the government in agricultural
marketing, and promotion of greater participation by the private sector in agricultural production
and trading activities.
Key questions have emerged since the reforms were implemented. These include: (1) What has
been the impact of the reforms on smallholder farmers’ use of inputs, productivity levels, access to
markets, production patterns, and overall income? (2) How have input and output private traders
responded to the reforms? (3) Have markets become more competitive and has market performance
improved (in terms of lower marketing costs and better services)? (4) What are the major
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