5.3 Market Development and Income Redistribution


 The ultimate solution to the food security problems of Malawi's population is through
market development, as described above, and through more equitable distribution of income and
resources in the country. While development of markets is relatively easy in terms of existing
governmental structures and resources, income redistribution is, politically and economically,
extremely difficult. Nevertheless, if the income distribution issue is not ultimately dealt with,
Malawi's population will never be food secure. The central message of this report is that food
security is a question of income. Thirty years of government policy that supported the
development of a small privileged elite at the expense of the majority of the population has created
an income distribution situation in the country that is among the most inequitable in the world
(World Bank 1995). Without adequate income, a significant number of households in Malawi
cannot hope ever to become food-secure.

 Inequitable distribution of income in the country not only affects food security, it also has
an impact on the speed and efficiency at which markets which support food security can develop.
As mentioned in Section 2.2, a number of household have such limited assets that they are unable
to participate in and benefit from the liberalization of the markets that has occurred in the past few
years. In addition, with such a highly skewed distribution of assets and income in the country,
development of a competitive, open marketplace is threatened. Malawi could find itself shifting
from the tyranny of government policy supporting the economic elite minority to the tyranny of
an oligopolistic market supporting that same economic minority. There is a need to empower the
poor majority to become active participants in the market.

 How a more equitable transfer of income and assets can be made from one segment of the
society to another is politically and technically difficult. Experience underlines the need to focus
on economically-based approaches rather than those based on issues of social justice. Increased
economic growth in the country will make the transfer of resources easier, as taxation and other
income transfer policy instruments that presently do not exist become available to government.
The development of a land market seems an obvious necessity for more equitable and rational
distribution of the most essential factor of agricultural production. It will take some time before
a viable land market can be established. In the interim, government may want to look at more
direct income transfer mechanisms to target select elements of the economy that could most
effectively use additional resources to expand entry into the market, thus creating a basis for
increased household productivity and income. Any mechanism to redistribute income should, to
the extent possible, support and expand market development. At the very least, these mechanisms
should not distort or curtail markets and prices.

 In the final analysis, income redistribution is a question of political will and resources.
Of these two, political will is by far the most important. The distribution of assets in a society
is one of the most contentious of any public policy issues a government faces. Thirty years of
history cannot be corrected in a single stroke. Vested interest are well entrenched and powerful.


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