Quantitative Value Chain Analysis : An Application to Malawi

The Government of Malawi has since 2005 been pursuing a growth strategy mainly based on increasing the volume of agricultural exports. This entails that Malawi should endeavor to improve the competitiveness of its agricultural commodities so as to...

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Bibliographic Details
Main Authors:	Tchale, Hardwick, Keyser, John
Format:	Policy Research Working Paper
Language:	English
Published:	2012
Subjects:	ACTUAL YIELDS AGRICULTURAL COMMODITIES AGRICULTURAL DEVELOPMENT AGRICULTURAL ECONOMIST AGRICULTURAL EXPORTS AGRICULTURAL INPUTS AGRICULTURAL OUTPUT AGRICULTURAL PRODUCTION AGRICULTURAL PRODUCTIVITY AGRICULTURAL RESEARCH AGRICULTURAL SECTOR AGRICULTURAL SECTOR PERFORMANCE AGRICULTURAL TECHNOLOGIES AGRICULTURAL VALUE AGRICULTURE ANNUAL CROP ARABLE LAND AUCTION BALING BENCHMARK BENCHMARKS BOTTLENECKS CASH CROPS CASSAVA CEREALS CLIMATE CLIMATE CHANGE COARSE GRAINS COFFEE COMMERCIAL AGRICULTURE COMMERCIAL FARMERS COMMERCIAL SEED COMMODITY COMMODITY PRICES COMPETITIVE ADVANTAGE COMPETITIVENESS CONGESTION CONSERVATION FARMING CONSUMERS CONTRACT FARMING CONTRACT FARMING ARRANGEMENTS COOPERATIVE MARKETING COST OF TRANSPORT COTTON COTTON PRICE COTTON PRICES COTTON PRODUCTION COTTON SECTOR COTTON YIELDS COTTONSEED COUPONS CROP CROP RESEARCH CROP VARIETIES CROP YIELDS CROPPING CROPPING PATTERNS DECISION MAKING DOMESTIC FOOD DOMESTIC MARKETS DOMESTIC TRANSPORT ECONOMIC RATE OF RETURN EXCISE DUTY EXPENDITURE EXPORT GROWTH EXPORT MARKET EXPORT MARKETS FAO FARM FARM HOUSEHOLD FARM INCOME FARM MANAGEMENT FARM PRODUCTION FARMER FARMER DECISION MAKING FARMER GROUPS FARMER INCOMES FARMERS FARMING FARMS FERTILIZER FERTILIZER APPLICATION FERTILIZER SUBSIDY FERTILIZER USE FINANCIAL CRISIS FISCAL POLICY FOOD BASKET FOOD CROP FOOD CROPS FOOD PRICES FOOD PRODUCTION FOOD REQUIREMENT FOOD SECURITY FOOD SELF-SUFFICIENCY FOOD SURPLUSES FOUNDATION SEED FREIGHT FREIGHT COSTS FUEL FUEL PRICE FUEL PRICES FUEL TAX FUEL TAXES GDP GRAIN GROSS MARGIN HERBICIDES HIGH TRANSPORT HYBRID RICE HYBRID SEED INFLATION INPUT PRICES INTERNATIONAL MARKET INTERNATIONAL MARKETS INTERNATIONAL TRANSPORT IRRIGATION COSTS LABOR COSTS LABOR FORCE LAND TRANSPORT MAIZE MAIZE PRODUCTION MAIZE YIELDS MARKET PRICE MARKETING MERCHANDISE MERCHANDISE EXPORTS MILLET MINISTRY OF TRANSPORT OPPORTUNITY COST OVERHEAD COSTS PADDY PER CAPITA INCOME PLANTING POOR FARMERS POOR HOUSEHOLDS POTATOES PRICE COMPARISON PRICE INCREASE PRICE LEVELS PRICE TRENDS PRODUCE PRODUCER PRICE PRODUCER PRICES PRODUCTION COST PRODUCTION COSTS PROFIT MARGINS PROFITABILITY PUBLIC PARTNERSHIPS PULSES PURCHASE PRICE REAL GDP RETAIL RETAIL PRICE RICE BRAN RICE PRODUCTION RICE VARIETIES ROAD ROUTES SALE SALES SEED SEED COMPANIES SEED COTTON SEED MULTIPLICATION SEED PRODUCTION SMALL FARMER SMALL FARMERS SMALL-SCALE FARMERS SOIL TYPE SORGHUM SUBSTITUTE SUBSTITUTES SUBSTITUTION SUGAR SUPPLIER SUPPLY CHAIN SUPPLY CHAIN MANAGEMENT SUPPLY CHAINS SURPLUS SURPLUSES TAX TAX REVENUE TEA TOBACCO TOTAL COSTS TRADE COMPETITIVENESS TRADE POLICY TRANSPARENCY TRANSPORT TRANSPORT COSTS TRANSPORT RATES TRANSPORT SYSTEM TRANSPORTATION TRANSPORTATION COSTS TRANSPORTS TRUCKS TUBERS VALUE ADDED VARIABLE COSTS VEHICLE VOLATILITY WAREHOUSE WAREHOUSES WEED CONTROL WHEAT WHOLESALE PRICE WHOLESALER
Online Access:	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20100322091715 http://hdl.handle.net/10986/3730

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Summary:	The Government of Malawi has since 2005 been pursuing a growth strategy mainly based on increasing the volume of agricultural exports. This entails that Malawi should endeavor to improve the competitiveness of its agricultural commodities so as to gain an increasing share of the regional and international markets. This paper analyzes the competitiveness of the country's key agricultural commodities -- tobacco, maize, cotton, and rice -- using prices that prevailed in the 2007/08 agricultural season. The paper employs a quantitative value chain methodology to assess the country's prospects for competitiveness and suggest weak links along the value chain that require attention in order to improve trade competitiveness. The results indicate that Malawi has some competitive advantage in the production and exportation of tobacco and cotton, and that this mostly derives from its low labor cost advantage. However, the results indicate that based on 2007/08 prices and costs, Malawi does not have competitive edge in maize and rice production for export. As such, Malawi would better pursue an import substitution strategy in these cereals, and perhaps only aim at the export market when regional market opportunities arise. Key factors that underpin Malawi's narrow competitiveness include the high cost of inorganic fertilizer and other inputs, low productivity, and the higher trader margins and intermediation costs along the value chains. Furthermore, farm gate prices in Malawi are higher than in other countries, and this undercuts its trade competitiveness.

Quantitative Value Chain Analysis : An Application to Malawi

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