Malawi: food marketing liberalisation and household food security: preliminary results from baseline surveys
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The marketing of food crops, typically produced by smallholder farmers, was liberalised in 1987 in response to: ° rising transportation and other costs and falling commodity prices on the world market; and, ° structural problems within the state marketing board — the Agricultural Development and Marketing Corporation (ADMARC) — which had over-extended its operations. These problems, combined with cross-subsidies on an extensive country-wide network of some 1,139 markets together with food crop marketing operations (including the maintenance of strategic grain reserves) led to unprecedented financial difficulties for ADMARC in the 1985-86 trading year. Private traders had always operated in Malawi and their operations had official recognition but no legal basis. Hence, their operations tended to be small-scale except where they operated as agents of ADMARC. The Agricultural General Purpose Act of 1987 established a legal basis for private trader operations defining eligibility criteria and rules of conduct. The market liberalisation programme has been implemented as part of wider reforms under the structural adjustment programmes initiated in 1981.