promoted by extension staff. However, in a market economy, on-farm husbandry and cropping
patterns will be determined by the smallholder's own perception of risk and profit. The main
role that government can play is to ensure that state and market institutions are not biased in favor
of maize and that information on appropriate technologies is disseminated and the technologies
are available.

 Malawi already has a well-established network of information systems, in particular the
Famine Early Warning System (FEWS) and the National Early Warning System (NEWS). These
systems have already adapted in response to the changing economic environment, in particular to
increased private sector activity, and will doubtlessly continue to do so. The main need in Malawi
at present is not for more data collection but for a quicker and more effective response to
information already collected. This response should have two elements: a mechanism whereby
government and concerned donors can come quickly to a common view on the magnitude of any
impending problem; and a set of contingency plans drawn up in advance which outline possible
appropriate actions.

 Thought should also be given to ways in which early warning information can be
disseminated to the private sector, including both farmers and traders. The private sector can
often respond more quickly than government can to impending market shortages, and it can often
do so in a more cost-effective fashion.

 As meteorological forecasts improve over time, more options will become available to
offset the costs of drought. Better use can be made of international commodity markets.
Information may even come in time to affect planting intentions. However, even now, in the
areas discussed above, government can take action to assist smallholders to reduce their own
vulnerability to drought.

4.3 Price Stability and Food Security

 During Malawi's centrally planned interventionist era, fixed maize prices and stabilization
mechanisms such as the Strategic Grain Reserve (SGR) had a prominent role in the economy.
These mechanisms have limited value for food security, particularly for the very poor. In a
market economy the role of price stabilization and the mechanisms to support it need to be
reevaluated.

 Subsistence farms are little affected by price changes because they do little trading in the
market. For a large share of the population, maize production constitutes not only a main source
of food bualso eir main source of income. Consumption in these households is in direct
proportion tohe level of production. The priceof maize has little sificance for them. A
maize-deficit farming household which in a drought year loses half of its normal production is
likely to suffer with an equivalent loss in its ability to purchase or consume maize, irrespective
of what happens in the market for maize. Income of such a household to purchase maize has been