Supply Response of Maize to Price and Non-Price Incentives in Malawi

Abstract

This paper analyzed the impact of price and non-price incentives on supply of Malawi’s main food crop, maize. The study fills a farmer’s response gap identified in several studies on farmer’s responses to price at hectarage allocation decision level. To achieve this, the study applies the unrestricted Nerlovean supply response model to maize. Results of the study show that farmers are responsive to crop’s own price and non-price incentives. Despite being responsive to price and non-price incentives, hectarage results indicate that farmers allocate land to export crops mainly basing on their previous allocation pattern rather than relative crop prices and foreign income.

Key Words: Maize, price, incentive, lags, supply, Malawi.