level where hybrid maize seed is distributed through use of delayed payments. The use
of dealer credit should be encouraged in other Malawian contexts, particularly at the
smallholder level.

Land Markets

It is generally held that land is a scare commodity in Malawi, with more than 40 percent
of smallholders having less than 0.5 ha of land. At the same time, rough estimates are that
over 100,000 ha of arable estate land is unutilized (Mkandawire et al., 1990). A viable
market is the most effective way of allocating a scarce resource such as land to its highest
economic use. Land issues, however, are always political and difficult to deal with.
Nevertheless, at this juncture in Malawi's history, this may be an opportune time to begin
addressing the critical issue of creation of a viable land market in the country. The
recently created Presidential Commission of Inquiry on Land Policy could be a useful tool
for beginning this process.

At present there is an informal market in leases for land in the estate sector. Creation of
a more formal market for buying and selling leases should be undertaken. Once a land
lease market is in place, a market-determined value of leases could be established. This
value, in turn, could serve as a basis for rent payments.

In the smallholder sector, thought should be given to how conversion of customary land
holdings to a smallholder leasehold arrangement could be undertaken. Experience in other
African countries suggest that a gradual approach to this issue should be taken. In
addition, full participation in, and use of, the political process is essential (Bruce and
Migot-Adholla 1993). With restrictions being lifted on smallholder production of burley
tobacco, the pressure to convert customary land into leasehold estates has lessened.
Nevertheless, establishment of a transaction market for land would, over time, still shift
real resources i'o allholders. SmalIholders, for example, could use their lease as
collateral for loans at commercial banks. Aiae land market for smallholders could also
provide a rational and equitable way o onsolidatin mallholder plots into economically
viable sizes.

Labor Markets

The market for labor in Malawi, like many of the other markets in the country, is thin and
fragmentary. In the rural area the most common labor market is ganyu. It is estimated that
about 70 percent of the active rural population engage in ganyu at least part of the year.
About 14 percent of the rural population work as permanent laborers or as tent. While
concerns have been raised about the social value of ganyu, it needs to e-recognized that
ganyu, defined as casual farm labor paid in cash or kind, is essential to increasing rural
Troduc-iii anh-d income. An expansion of demand for casual farm labor is very desirable.
On me other hand, there are a number of examples of exploitation, particularly of the very