Outcome
 Loser Loser Winner OK Big winner

Source: see Annex C
 If no intervention is made into the rural economy, the process of off-farm diversification
will be slow. There are some hopeful signs in the ejections coming from growth in tobacco
income. There are indications that this growth is having some multiplier effects in terms of
increased demand for labor, goods, and services (Peters 1995). Increased diversification into
other cash crops may have similar effects. A transfer program to poor smallholder

households, whether in cash, voucher, or kind, would provide a stimulus to the process. This -
situation would be particularly effective if it were implemented in such a way as to avoid market
distortions and disincentives to private trade.

 It is unlikely that poor female-headed households can take advantage of any rural growth
without some assistancebecause of the position in which they are trapped. Some kind of transfer
program could undoubtedly assist them, but these households are extremely vulnerable and would
benefit from additional support. An additional or alternate option would be to increase the
coverage of some of the targeted schemes which already exist in Malawi. Run by NGOs and
donors, these provide combinations of resource transfers, access to credit and technical support
and training. These programs undoubtedly cost considerably more than a straight transfer
program but some of them at least appear to have been successful in providing female-headed
households with profitable off-farm alternatives. These programs are discussed in more detail in
Annex F, on safety nets.