Estate agriculture in Malawi and its economic interplay with the smallholder sector: A historical perspective
While smallholder farming remains at the center of agricultural transformation efforts in Malawi, there is renewed interest in the potential role of larger-scale farming in accelerating agricultural and rural development. Larger-scale farms —“estates”— have, however, been part of Malawi’s agricultural landscape for more than 140 years. Agriculture has long been described as bifurcated with a large, subsistence-oriented smallholder sector alongside a smaller estate sector that historically supplied most agricultural exports. This study reviews the evolution of estate agriculture and examines how estates and smallholders have interacted economically, drawing lessons for efforts to promote broad and sustainable agricultural and rural economic development centered around larger-scale farming.
Despite its importance to Malawi’s international trade, the performance of the estate sector has been mixed at best. When estates thrived, it was rarely because they were more productive or efficient than smallholders, but rather because the government instituted regulations or took other actions that hamstrung the productive potential of smallholders in some way.
Most leasehold estates were created in the 1980s, when quotas to sell burley tobacco were reserved for estates of at least twelve hectares, leaving a sector made up of a large mass of small leaseholds and a few genuinely large estates. Other than tenure status and scale, there have been few meaningful distinctions in how the small estates and smallholders operate. With the liberalization of smallholder agricultural marketing in the 1990s, the incentive to maintain these leases disappeared and most appear to have expired, though some of the older and larger estates retain valid leaseholds. The legal status of the lapsed leaseholds is also unclear. It is uncertain whether the land can be re-leased, remains with the former leaseholders, or reverts to customary tenure. This ambiguity, combined with longstanding concerns about idle estate land, is problematic in the context of increasing agricultural land pressure.
Estates have frequently partnered with smallholders. The visiting tenant system for tobacco production evolved into an outgrower scheme, and the Integrated Production System that now organizes most of Malawi's tobacco production has a similar architecture albeit with different actors. Other outgrower schemes emerged, at least in part, because of heavy government involvement. Those that endured did so largely because of the nature of the crops at the center. Tea and sugarcane must be processed rapidly using specialized, capital-intensive equipment to realize their economic value. Beyond such partnerships, evidence that estates generate benefits for the smallholders around them is thin. Historically many estates have been too poorly managed, and unprofitable to generate economic spillovers.
The historical record therefore provides limited support for assuming that large-scale farms in Malawi are inherently more productive or efficient than smallholders, or that their presence will automatically benefit surrounding smallholders. Partnerships between large farms and smallholders are mutually beneficial and commercially successful only in specific contexts and for specific products and where larger-scale farms do indirectly affect smallholder operations and technology adoption and input use in particular, the benefits have often been modest.
None of this argues against large farms in Malawi. Especially for crops suited to mechanized farming and those requiring irrigation, large-scale production may be more efficient. Estates and other largescale agrifood enterprises are also better positioned than smallholders to engage in processing and to access higher-value markets. As resources are scarce, however, the question is not only whether larger-scale farming can contribute to the development of commercial agriculture, but whether its contribution justifies diverting resources away from smallholder-oriented and other programs.
Authors
Benson, Todd; Cockx, Lara
Citation
Benson, Todd; and Cockx, Lara. 2026. Estate agriculture in Malawi and its economic interplay with the smallholder sector: A historical perspective. MaSSP Working Paper 48. Washington, DC: International Food Policy Research Institute. https://hdl.handle.net/10568/185401
Keywords
Africa; Sub-saharan Africa; Southern Africa; Estate Management; Agricultural Land Management; Economics; Smallholders; Large-scale Farming
