Improving profit and productivity through optimal cropland allocation for smallholder farmers in Malawi

Abstract

This quantitative research study aimed to increase on-farm profits for smallholder farmers in an environment where land is becoming increasingly constrained. Due to an increasing population, most smallholder farmers in Malawi now cultivate on less than a hectare of land. Expanding farming land is almost not an option unless at the expense of environmental destruction. Despite current government efforts to improve the livelihoods of smallholder farmers, 59% of these farmers continue to live below national poverty. By using the maize and groundnut cropping enterprises, this study argues that optimal cropland allocation by smallholders coupled with improvements in yield and prices can lead to improved farm profits. The study used data from IHS5 for 119 maize and groundnut smallholder farmers in Malawi. Linear Programming was applied to assess the impact of optimal cropland allocation on the performance of on-farm profits. The results show that the average profits realized by smallholder farmers under the current cropland allocation are below those estimated from optimally allocating cropland. Optimal cropland allocation increased farm profits by an average of MK 21,047.63. This increase was statistically significant at a 0.05% significance level. Smallholder farmers could attain further increases in profits, especially with improvements in the yield and price of groundnuts. Optimal cropland allocation should complement the current efforts by the government to increase smallholder farmers’ profits.