Since the end of the 1980s the agriculture sector in Malawi has been liberalised in several stages. The idea was to bring in the private sector and thus secure better food supplies at lower prices. One major step in the reform was the privatisation of the Agricultural Development and Marketing Corporation (ADMARC). This was a key component of Malawi's poverty reduction strategy and one of the lending conditionalities of the World Bank and the International Monetary Fund.

The privatisation was highly controversial. Opponents of privatisation stressed the importance of ADMARC for food security. They feared it would lead to the closure of markets in remote regions of the country and to soaring prices. The advocates of privatisation cited inefficiency, corruption, the burden on the public budget and the fact that the private sector was being squeezed out of agricultural marketing as arguments in its favour.

The PSIA was initiated by the World Bank; GIZ supported the qualitative component. It was shown that proximity to ADMARC markets improves rural households’ access to a fair market for maize, seed and fertiliser and has a positive influence on the income of rural households, especially in remote regions. The study confirmed the need to reform ADMARC, provided that the social functions of remote ADMARC markets were retained.

This process, which was largely steered by the World Bank, was heavily criticised by civil society for the low level of participation of national stakeholders and the late publication of the findings. Nevertheless, the PSIA has made a decisive contribution to highlighting ADMARC’s importance for food security. This has created a basis on which to modify the reform to ensure that privatisation of rural markets does not have adverse economic and social impacts.

Link

• Malawi Agricultural Marketing Board Restructuring
  lnweb18.worldbank.org/essd/...