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Macadamia nuts constitute a vital component of both nutrition and livelihoods for smallholder producers in Malawi. We conducted a comprehensive mixed-methods study, combining qualitative and quantitative analyses, to explore varietal preferences and production challenges among these farmers. Leveraging cross-sectional data from 144 members of the Highlands Macadamia Cooperative Union Limited, our study underscores several significant findings. Our findings reveal that the majority of smallholder macadamia farmers (62%) are aged over 50, with farming as their primary occupation. Varied preferences are driven by yield-related traits, including high yield potential (38%), nut quality (29%), and extended flowering patterns (15%). Among the macadamia varieties, the top five choices, grown by over half of the farmers, include HAES 660 (18%), 800 (10%), 791 (9%), 816 (8%), and 246 (7%). Additionally, our study identifies five primary constraints faced by smallholder macadamia farmers: insect pests (81%), diseases (34%), limited market access (33%), wind damage (25%), and inadequate agricultural advisory services (17%). Based on these findings, we propose two policy recommendations to enhance smallholder macadamia production and productivity in Malawi and other regions. Specifically, we advocate for informed breeding programs that align with farmer preferences to promote greater adoption of macadamia varieties. Additionally, we emphasize the crucial role of the Malawian government in the macadamia value chain, suggesting active participation in providing extension services and marketing support, akin to its support for other cash crops.