Resource information
Diversification into high-value cash
crops among smallholders has been propagated as a strategy
to improve welfare in rural areas. However, the extent to
which cash crop production spurs projected gains remains an
under-researched question, especially in the context of
market imperfections leading to non-separable production and
consumption decisions, and price shocks to staple crops that
might be displaced on the farm by cash crops. This study is
a contribution to the long-standing debate on the links
between commercialization and nutrition. It uses
nationally-representative household survey data from Malawi,
and estimates the effect of household adoption of an export
crop, namely tobacco, on child height-for-age z-scores.
Given the endogenous nature of household tobacco adoption,
the analysis relies on instrumental variable regressions,
and isolates the causal effect by comparing impact estimates
informed by two unique samples of children that differ in
their exposure to an exogenous domestic staple food price
shock during the early child development window (from
conception through two years of age). The analysis finds
that household tobacco production in the year of or the year
after child birth, combined with exposure to an exogenous
domestic staple food price shock, lowers the child
height-for-age z-score by 1.27, implying a 70-percent drop
in z-score. The negative effect is, however, not
statistically significant among children who were not
exposed to the same shock. The results put emphasis on the
food insecurity and malnutrition risks materializing at
times of high food prices, which might have
disproportionately adverse effects on uninsured cash crop producers.
