Malawi Agricultural Sector Risk Assessment

With more than three-quarters of its
workforce employed in agriculture, Malawi is highly
vulnerable to any adverse events affecting the agriculture
sector, and agricultural risks are ever present in the
country. Agricultural risks can obstruct development and
enforce poverty traps, particularly for a country as reliant
on agriculture as Malawi. Because of the size of the sector
in the economy and the importance of agricultural products
for export, agricultural growth correlates closely with
gross domestic product (GDP) growth. Malawi’s effort to
manage risks and to provide relief in response to adverse
events diverts significant resources from longer-term
development investments. To better understand the dynamics
of agricultural risks and identify appropriate responses,
incorporate an agricultural risk perspective into decision
making, and build the capacity of local stakeholders in risk
assessment and management, the agricultural risk management
team (ARMT) of the agriculture and environment services
department of the World Bank conducted an agriculture sector
risk assessment. The purpose of this report is to assess
existing agricultural risks, prioritize them according to
their frequency and impacts on the sector, and identify
areas of risk-management solutions that need deeper
specialized attention. Three levels of risks were assessed:
production risks, market risks, and enabling environment
risks to selected supply chains. The report takes a
quantitative and qualitative approach to assessing risk.
This report is structured as follows: chapter one gives
introduction and context. Chapter two provides an overview
of the agriculture sector and the selected crops. Chapter
three maps the production, market, and enabling environment
risks to food crops and export crops. Chapter four looks at
the adverse impacts of agricultural risks in terms of
losses, both at the national level and for different
regions. Chapter five prioritizes the risks in terms of
their frequency and the severity of their impacts, and
discusses solutions based on this prioritization, ongoing
risk-management activities, and the feedback from the
consultative workshop.