Researchers have found that policy-induced distortions in the form of export bans on agricultural commodities in Malawi create disincentives for farmers to produce, rendering these policies self-defeating and unsustainable in the long run.
In their paper published on Tuesday titled Achieving Food Security and Industrial Development in Malawi: Are export restrictions the solution? Emerta Aragie, Karl Pauw and Valentina Pernechele argue that export restrictions can also be welfare-reducing and welfare losses tend to be biased against poorer farm households.
“Unfortunately, when short-term political motivations outweigh longer-term socio-economic considerations, these adverse effects may be conveniently overlooked by policymakers,” reads the paper in part.
According to the research findings, in the short run, the introduction of the maize export ban has a significant impact on sectoral gross domestic production (GDP), with declines by 13.5 and 21.9 percent in the maize and grain milling sectors, respectively.
Export restrictions on staple foods or cash crops are frequently imposed in developing countries to promote food security or industrial development goals. By diverting domestic production to the local market, export restrictions reduce domestic prices and increase domestic supply of food or intermediate inputs to the benefit of consumers or downstream industrial users.
“Our results show that in the short run Malawi’s maize export ban achieves its stated objective of increased food security, measured narrowly in terms of availability of maize at lower prices. [But] in the long run, maize prices decline,” reads the report in part.
Export bans on maize are particularly notable and have been in operation in three-quarters of crop years since 2005/06.
Speaking during the launch of the National Security Policy (NSP) in Lilongwe in March, President Peter Mutharika hinted on renewing the ban on maize exports as one way of ensuring food availability in the country.
The move, if affected, may antagonise commercial farmers who blamed the previous export ban lifted last October for negatively affecting prices off the staple grain.
In an earlier interview, Malawi Confederation of Chambers of Commerce and Industry (MCCCI) chief executive officer Chancellor Kaferapanjira said while it is important to be food secure at all times, setting minimum prices for produce and placing export ban on commodities, transfers revenue from farmers to consumers and vendors; thereby, removing incentives for farmers.