discussion. Nevertheless, using this paradigm may provide new and possibly startling approaches
on how to develop and implement policies and programs to enhance food security in the country.
This paradigm shifts policy from a focus on specific quantity of food available (a food gap
approach) to a broader focus on issues of supply demand and responsiveness of the market to
 satisfy food security needs The implementation mechanism is not government institutions but
 the marketplace. The approach is indirect rather than direct. The cost-effectiveness of any given
 action proposed to achieve a policy objective becomes increasingly important. In addition, as the
 market adjusts to new conditions effective safety nets of programs and policies are required to
 protect the most vulnerable part of the population from the more adverse effects of shifts in the
 marketplace.

 1.2.3 Structural Transformation for Food Security

/ As mentioned above, a market-oriented response to increasing productivity in the economy
requires a structural transformation of the economy. Malawi cannot remain a country whose
economy is dominated by subsistence smallholder farmers. With the country's ever increasing
population, a continuation of the present economic structure will lead to a Malthusian disaster.
The economy must move, over the next several decades, from being largely based on subsistence-
oriented household production centered around local markets to an integrated economy based on
specialization and exchange within a world-wide market.

 Today, Malawi has a dualistic economy. On one side is an estate sector a few
 corporations and a bureaucratic structure that concentrates most of the wealth of the country in
 a few hands. Most of these structures are linked to the elite of the previous government. The
 estate sector is dominated by tobacco, sugar and tea produced under labor-intensive conditions.
 On the other side of the economy is a large smallholder sector whose primary production is maize,
 tubers and, to a more limited extent, vegetables and pulses. Wages are low in the country, as is
 the productivity of labor. More than half the country lives in poverty, and over fifty percent nf
 the children are stunted frnm malnutrition. The characteristics of the smallholder sector and the
 urban poor are seen in Section 2.1.

 Except for the sale and production of export crops, markets in Malawi are extremely thin
 and unreliable. Until recently, all legal transactions related to the sale of products from and inputs
 to smallholders had to go through ADMARC. While this situation is changing, ADMARC still
 has a dominant presence in the market and, though legal restrictions for trade have been lifted,
 ADMARC's legacy still prevails in the minds of smallholders, traders, producers and
 Government. Because of this, rural food markets are dependent on either extremely thin and
 unreliable local markets or ADMARC. For most poor people, acquiring food and household -.
 goods is done primarily through personalized systems of exchange based on local neighbors,
 villages and kinship groups. It hasbeen pointed out that dependence on personalized systems ofL. -
 exchange "perpetuates chronic vulnerability to food insecurity" (Jayne et al., 1994T y limiting
 the range of opportunities open to exchange goods and services. This limited opportunity reduces
 the ability of the poor to seek out the best possible source of goods and markets for selling or