Both micro- and macroeconomic evidence suggest that the promotion of agricultural diversification in agriculture-based developing countries makes sense. At the microeconomic level increased agricultural diversification promotes nutrition and raises household incomes, while allowing farmers to adapt to the challenges posed by climate change. At the macroeconomic level agricultural diversification contributes to overall economic diversification, industrialization, and growth, as well as economic resilience in face of external economic shocks. This study is specifically concerned with crop diversification in the agricultural sector. Using Malawi as a case study, we analyze the recent patterns and determinants of crop diversification in order to better understand how policies impact on diversification or how they can be better formulated or implemented to effectively promote diversification. Malawi is an interesting case study for several reasons. It is one of the poorest nations in the world and relies heavily on agriculture for food security and economic growth. This suggests policies that contribute to a more vibrant and diversified agricultural sector would bring about socioeconomic gains. At present, however, the agricultural sector is highly undiversified, with maize and tobacco being the dominant staple and export crops respectively. Despite this, the government has since the 2005/06 cropping season implemented the Farm Input Subsidy Program aimed primarily at increasing maize productivity and output. Data from two nationally representative household surveys, which covers cropping seasons in 2004/05 and 2010/11, will shed light on whether this major intervention has had a positive or negative impact on crop diversification, either through freeing up farm land for other crops (due to higher maize yields obtained) or through crowding out other crops. In fact, we find that although crop diversification has deteriorated nationally and regionally, beneficiaries of the subsidy program have indeed become more diversified. This possibly points at an increase in maize cultivation among non-beneficiary households so that they may become eligible for the subsidy. We conclude that while various policies in Malawi all encourage agricultural diversification in broad terms, there is a lack of strategic thinking around how exactly it will be achieved, and more importantly, how crop diversification could be promoted among different types of farmers with the aim of contributing to economic growth, risk reduction, and nutrition security.
Keywords: Crop diversification; agricultural commercialization; Malawi