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Smallholder market access: the case of groundnut sector in Malawi

Smallholder market access: the case of groundnut sector in Malawi

Nakhumwa, Candida (2015) Smallholder market access: the case of groundnut sector in Malawi. PhD thesis, University of Greenwich.

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This thesis focussed on assessing smallholder groundnut farmers and traders’ access to markets through quality improvement and also, determine the socio-economic factors that influence groundnut farmers when deciding to adopt quality management techniques and the extent/or level of involvement. The following research questions were tested: whether Malawi smallholder groundnut farmers have poor or limited access to markets; whether smallholder farmers face unequal bargaining relations with traders due perhaps to lack of competition in trading channels; whether belonging to a farmer organisation provides a framework whereby the prospects of higher prices could lead to higher quality regulated by the association?

Qualitative analysis was used to map out the main processes, key actors and relationships within the various groundnut value chains. Price spread method was used to assess market efficiency in price for the various groundnut market channels. Finally, a Selective Tobit model was used to assess factors that influence smallholder farmers to adopt technologies on quality management and decide the extent of adoption.

The study results indicated that smallholder farmers manage to sell all their groundnuts brought to the market. This means that smallholder farmers do not really have problems accessing the markets. However, there is a limited availability of structured groundnut markets that offer premium price as an incentive for farmers to invest in quality management. Another important finding is that belonging to an organised farmer organisation enabled smallholder farmers to access better agricultural services such as research, extension and quality certified seed. However, it was not enough to persuade the farmers to venture into collective marketing. The results suggest that the provision of economic incentives such as premium prices persuaded farmers to engage in collective action and also invest in quality management. There is convergence of prices for less quality sensitive regional markets and quality sensitive EU markets. As such, exporters have no incentive to invest more in quality management targeting EU markets.

Selective Tobit model results showed that farmers value most profitability-related variables such as land allocated, structured markets and prices when deciding level of involvement in quality management. The study results also indicate that groundnut market in Malawi is efficient in price as demonstrated by the Market Efficiency Index of greater than one. Gross margin analysis also indicated that, on average, groundnuts producers have good returns to labour if compared to the current national minimum wage rate of US$1.2 per day.

Item Type: Thesis (PhD)
Uncontrolled Keywords: smallholder farmers; access to markets; Malawi; value chain analysis; agriculture;
Subjects: H Social Sciences > HD Industries. Land use. Labor
S Agriculture > S Agriculture (General)
Faculty / School / Research Centre / Research Group: Faculty of Engineering & Science
Faculty of Engineering & Science > Natural Resources Institute
Last Modified: 24 Nov 2017 10:18

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