5. ALTERNATIVES TO DEAL WITH CHRONIC FOOD INSECURITY

 There are many ways government can support and enhance food security within their
countries. Of these, three possible alternatives should be noted in terms of their appropriateness
and effectiveness for increasing the food security of Malawi's population. These three alternatives
are direct or indirect market intervention, encouragement of market development, and market
development with income redistribution.

5.1 Direct or Indirect Market Intervention

 Intervention into the market by government, either directly or indirectly, has been for the
past 30 years the standard response to food security problems in Malawi. Even today, Malawi's
politicians continue to promise to protect the population from hunger through subsidies, free hand
outs, and manipulation of prices in the market. There is a common fear and distrust of the market
among many in government and a belief that if there is a problem, the state must solve it. In
many government agencies and organizations there is an institutional culture that seeks to protect
and control the population through government action. Governmental concern for the well being
of its population is laudable and highly desirable. When this concern is translated into
undermining the ability of the population to provide for its own well being in accordance with
basic social justice, then this laudable concern becomes a liability and detriment to the society.

 Examples of market intervention by the state are abundant. The most obvious example is
the tendency of government policy makers to look to ADMARC first whenever there is any threat
related to food or food production. Reliance on ADMARC as the operational arm for food
security policy has been, and to a certain extent still is, the standard approach of government.
Such reliance is often justified on the grounds that private markets are too thin and too unreliable
to support food security policy. Ironically, exclusive reliance on ADMARC, makes this opinion
about private markets a self-fulfilling prophecy. Those who do not think the market will work
put into place actions and policies which assure that the market will not work.

 The implementation of a price band is a significant step forward from the previous fixed
administrative prices. If, however, the band is set too narrowly in the belief that this will protect
producers and consumers, there is not enough margin for private traders to operate in the market,
given the risk and cost involved. Curtailing incentives for traders to enter into the market, causes
trade in maize to be done by a small number of traders who can effectively dictate price level
through monopsonistic and oligopsonistic behavior. The government is then faced with two
unpalatable options. Either the government must allow prices to be artificially low for producers
or high for consumers as traders take their monopolistic profits, or government must try to
intervene to support the price band and face ever increasing burdens on the treasury. Thus, while
government tries to do something good, i.e., protect people, a bad situation occurs.

 There are numerous other examples of market distortion though government intervention
into the market. Panterritorial pricing attempts to deny the existence of transportation costs to get