Abstract:

The economic crisis of sub-Saharan African countries in the early
1980s has led to the adoption of the Structural Adjustment Programs
(SAPs) as a recommendation by international donor agencies such as the
reverse an economic decay in the region. Among the SAP policies are the
promotion of tradables as opposed to nontradables, the increase in
prices of tradables, and the withdrawal of fertilizer subsidies to
farmers. It was hoped that this would eventually initiate more economic
activity and, therefore, economic growth in the region. However,
because sub-Saharan African economies are dependent on agriculture both
for employment and food, these policies have had some adverse effects on
agricultural production of African farmers.
is one these sub-Saharan African
countries that adopted SAPs in the 1980s. A Fertilizer Subsidy Removal
Program (FSRP) has been adopted. Through SAP policies, the government
of Malawi has encouraged the cultivation of cash crops (tradables) such
as tobacco, hybrid maize, and cotton, at the expense of subsistence
crops (nontradables) such as local maize, which occupy 90% of
smallholder farms and are grown mainly by women. Intensive agricultural
production by fertilizer use and other appropriate technologies must be
encouraged in Malawi because of the country’s high population and the
low production of local maize, the staple food whose production has
stagnated during the past five years.
During the study, the FSRP in Malawi is described, and the
program’s economics and impact on farmers are analyzed. The major
factors limiting smallholders’ use of chemical fertilizer were
determined to be lack of cash and/or credit. Smallholders who were
credit club members applied more fertilizer than nonclub members. The
study also indicated that a withdrawal of the fertilizer subsidy from
a supply response in local maize production. An increase in the price
of local maize cannot offset the increase in fertilizer prices and
removal of the fertilizer subsidy. On the other hand, an increase in
price and profitability of hybrid maize offsets an increase in the price
of fertilizer and removal of the fertilizer subsidy. Women lose out in
such a SAP arrangement of promoting only tradables, and hence, SAP
policies are gender-biased.
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to less fertilizer use on local maize and, as a result, will not elicit
smallholders and, therefore, an increase in fertilizer prices, will lead