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Mega farms have the potential to transform Malawian agriculture. While the establishment of new mega-farms is supported, strengthening existing large farms by enhancing their human resource capacity, promoting sustainable agricultural practices, and addressing other issues that limit productivity will generate quick wins. It is also important for Government to put in place deliberate policies that will promote meaningful interaction between mega-farms and surrounding smallholder farmers and communities. The management and governance of the mega-farms should be private sector-led, with Government providing supporting infrastructure and conducive marketing and trade policies. Furthermore, the choice of the focus crops or livestock on the mega-farms should be consistent with suitable climatic, soil, and other ecological factors.

• Malawi has been implementing a large input subsidy program since the 2004/5 season to improve access to agricultural inputs by smallholder farmers. • Recently, there has been recognition within government that significant reforms are needed. • These calls for policy shift are consistent with existing evidence that suggests that the benefits from subsidy programs have been considerably smaller than anticipated due to low crop response to fertilizer and other challenges. • These calls present an opportunity for innovative policies to decisively address the existing pitfalls and devise ways for greater and more efficient use of resources. • Malawi could consider implementing a streamlined, smarter subsidy program and/or venturing into other forms of subsidies tailored to different farmer and ecological needs (e.g., subsidizing legume seeds, agriculture lime, etc.). • Government could also consider going beyond subsiding inputs to promoting interventions that holistically addresses soil health and land conservation challenges faced by the nationʼs farmers. • Malawi could adopt policies other than subsidies, such as strengthening agricultural Research, Development and Extension to improve productivity of land, labor and other inputs. • Bidirectional learning between extension workers and farmers, improving public infrastructure, increasing access to education and land tenure rights, creating an enabling policy environment, and promoting dietary and production diversity will all be critical for the country.

The conflict between Russia and Ukraine is very likely to have an impact on Malawi that could be detrimental, but steps can be taken now to soften the effects. Even before the war, food and fertilizer prices were near, and likely to surpass, historical highs. Global fuel prices will rise, putting upward pressure of fuel, food, and fertilizer costs in Malawi. Food prices will also rise on the global markets due to supply shocks, especially for wheat and sunflower. As staple grains and edible oils are highly substitutable and often inputs for other foods, this will raise global prices for most foods, which will further raise food costs in Malawi. Rising fuel and food prices will put upward pressure on fertilizer prices due to higher costs of production and increased demand for fertilizers. Fertilizer supply will also be directly impacted, as the countries involved in the conflict are major producers of chemical nitrogen, phosphorus and potassium used in agricultural production. Actions can be taken now to mitigate the effects on Malawian livelihoods, including changes to the Affordable Inputs Program, promoting alternatives for wheat and maize, and facilitating local production of edible oil crops, such as sunflower and soya.