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Cash crop liberalization and poverty alleviation in Africa: evidence from Malawi
Author(s) -
Masanjala Winford H.
Publication year - 2006
Publication title -
agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.29
H-Index - 82
eISSN - 1574-0862
pISSN - 0169-5150
DOI - 10.1111/j.1574-0862.2006.00156.x
Subject(s) - cash crop , economics , nonfarm payrolls , consumption smoothing , consumption (sociology) , agricultural economics , cash , poverty , liberalization , per capita , business , agriculture , economic growth , production (economics) , geography , finance , population , market economy , social science , demography , archaeology , sociology , unemployment , macroeconomics
This article uses the case of burley tobacco liberalization in Malawi to investigate the efficacy of cash crop liberalization as an instrument for poverty alleviation in sub‐Saharan Africa. The principal justification for cash crop liberalization is that markets allow farm households to increase their incomes by producing that which provides the highest return to their productive resources and use the cash to buy consumption goods. Using a latent welfare model, we find that households that selected to grow cash crops had higher incomes than those that did not grow cash crops. However, we also find that due to the lumpiness and seasonality of cash crop incomes, higher household incomes, while increasing food purchases did not significantly affect per capita food intake. Irrespective of participation in cash crops, for much of the cropping season rural households seem to rely more on nonfarm income for expenditure and consumption smoothing.