Performance, behaviour and organization of maize trading in Malawi

Abstract

Industry structure and social capital could affect traders, market performance and distribution of economic resources such as food. This study assesses the effect of industry structure and social capital on traders' profitability and resilience. We use Bayes Model Averaging regression techniques to draw inferences from a random, representative and systematically selected sample of maize traders in the central region of Malawi. We complement our results with key informant prior information from industry experts and literature. Results indicate that at the local market level, few traders dominate but competition increases when we consider the entire district and region. Results also show that interaction with distant traders and brokers is associated with more profitable and resilient businesses. While we find evidence that social capital is positively associated with business profitability, results do not strongly support the hypothesis that other measures of social capital such as tribal and religious affiliation have an effect on traders' resilience. Noteworthy, as the unit of closeness among traders decreases to family ties, profits tend to increase. This suggests a more group and kin selective evolutionary stable strategy among maize traders.

A comparative assessment of the poverty and food insecurity experience between food entrepreneurs and smallholder farmers in rural Zambia

“…The majority of food entrepreneurs reached Grade 7, which is consistent with Kankwamba and Kornher (2019), while the majority of smallholder farmers reached Grade 12, which agrees with Khoza et al (2019) and Ndlovu et al (2021). Many researchers found a positive correlation between a high level of education and business success.…”

“…The majority (28%) of the food entrepreneurs reached Grade 7, followed by Grade 9 (27%), and Grade 12 (21%). This implies that the majority of the respondents can read and probably write and have the propensity to engage in trading as espoused by Kankwamba and Kornher (2019). In terms of smallholder farmers, the majority (61%) reached Grade 12 followed by Grade 9 (19%).…”

“…Level of education is a nominal variable in which the level of education influence intentions to become an entrepreneur, according to Kankwamba and Kornher (2019), whose results are based on studies in Malawi, and so the level of education is related to business success (Peters and Brijlal, 2011). Afata et al (2022) placed the majority of smallholder farmers on primary education while Khoza et al (2019) found that most of them reach secondary education, and this was affirmed by Ndlovu et al (2021), who conducted studies in South Africa and Oluwatayo and Rachoene (2017).…”

“…Household size is a quantitative variable in which a large family composition influences entry into entrepreneurship (Kankwamba and Kornher, 2019). In addition, family is measured in Zambia based on a family size of five (5) by the Jesuit Centre for Theological Reflection in order to calculate the food basket (Jesuit Centre for Theological Reflection, 2022).…”

“…Income is a quantitative variable that represents the amount of money made by food entrepreneurs and smallholder farmers, for which Kankwamba and Kornher (2019) argued that household income improves food choices for a family. Tamene et al (2014) found that smallholder farmers earned a low income, below $0.72 per day.…”