insecurity is reduction of poverty through development. Within the scope and resources of this
report the whole of Malawi's development cannot be considered. There are many basic
development issues the report cannot and should not address. Nevertheless, aspects of programs
in priority areas to support food security within a market context can be briefly examined to see
possible future directions these programs should take.

 The following comments on how to deal with chronic food security issues should be
viewed as a framework for future actions, not necessarily as specific actions to be taken
immediately. This presentation attempts to describe where government and donors should be
heading in each of the concerned areas to fully implement a market-oriented approach to
establishing food security in Malawi. The report also notes possible pitfalls to be avoided by
policy makers. This framework can serve as a guide for additional study to develop action plans
and policy directions.

Markets

 There are two basic types of markets that are important to food security in Malawi. First
and most basic is the food market in the country. Second is a group of markets related to the
factors of production, namely capital markets, land markets, labor markets and inputs markets.

 Food Markets

 The concept of a food market entails a wide range of activities from the purchase of food
from the producer, processing, storage, distribution and differentiation of the product until it is
finally sold and consumed. From a food security perspective, important elements needed in the
food market include low transaction costs within the marketing system, expanded differentiation
of food available to consumers, particularly the poor, and assured availability of food on the
market. As mentioned earlier, traditionally the food market in Malawi has been very thin and
unreliable. The situation, however, is now changing.

 Even with all the studies done in Malawi on food security issues (Annex B), the concept
 of a competitive food market is relatively new in Malawi and has undergone limited
 analysis. Much basic information about the food market is not well understood. For
 example, ADMARC's rule of thumb is that about 20 percent of the maize crop is marketed
 through their branches. Yet, this level of purchases has only occurred once in the last five
 years during the bumper crop of 1993. In other years, ADMARC's purchases were less
 than half of that percentage. Little is known about food marketed or traded in the private
 sector outside of ADMARC. In 1995, it was estimated that the private sector bought
 about three percent of the maize crop, less than half of ADMARC's seven percent (EP&D
 1996). For food crops other than maize, even less is known of private sector trade. From
 studies reported in the Poverty Profile, it is known that food crop sales, trade, and
 exchange are critical to the poor for cash income. Such food crop sales include not only
 maize but beans, cassava and a host of other locally grown crops. Important issues which