EXECUTIVE SUMMARY


 Over the past ten years there have been fundamental changes in Malawi's political
 and economic structures. These changes provide opportunity to use the market as part of
 a food security strategy for the country.

 Food security is an issue of household income andjoverty, not of food production.
 Food security is defined as sufficient food consumption by all people at all times for a healthy
 and productive life. Chronic food insecurity is a long-term problem caused by lack at, the
 household level, of income or assets to produce or buy food adequate for the household.
 Transitory food insecurity is a short-term food security problem caused by a shock to the food
 production or economic system, where income or resources necessary to adjust to the shock
 are not available.

 The food security strategy in Malawi should reflect the country's newly developed
 market economy. A market economy provides the best opportunity for growth and
 development in Malawi. Food security policy needs to be directed to facilitating development
 of this market economy. A market-oriented approach to food security is based on competitive
 markets which increase productivity in the economy and foster increased household income.
 Government and donors must avoid interventions which, in the name of food security, \ 9
 undermine the market and serve to delay the long-run objectives of eliminating food
 insecurity. /

 In addition to markets, government can also play a critical role to assure food security
 in the country. While markets are the main distributor of benefits in an economy, government
 establishes the rules by which the market operates, assures a level playing field in the
 marketplace, provides essential public goods and services, and deals with underlying issues of
 resource distribution.

 There are many poor households in Malawi that suffer food insecurity. The food")
 insecure in Malawi can be divided into three categories: smallholders, estate workers/tenants
 and the urban poor. The basis of much of their food insecurity is the 30 years of previous
 government economic policy that has skewed income distribution in the economy and limite-
 opportunities.

 Market liberalization has provided short-term benefits to food insecure
 smallholders who have some access to resources. A profile of five smallholder households
 shows that those households who have access to resources to purchase inputs, and hence can
.plant tobacco and hybrid maize, have benefitted from liberalization. Those households without
resources have initially gained much less benefit and are increasingly marginalized. For some
smallholders, there is inadequate asset accumulation within the household to assure production
increases within the near term. As markets and income opportunities expand, this situation