Smallholder Heterogeneity and Maize Market Participation in Southern and Eastern Africa: Implications for Investment Strategies to Increase Marketed Food Staple Supply

In many African countries, as well as in other parts of the world where a significant part of the rural population is poor and food insecure, policymakers face what is called the food price dilemma. On the one hand, they need to provide farmers with incentives to increase the quantity of marketed food staples to feed a growing population, especially in rapidly growing urban centers where unrest can be politically destabilizing. On the other hand, because staple foods account for a large portion of total household expenditures for both urban and rural households, policymakers also are drawn to policies that lower the retail price of staple foods for consumers. Achieving both objectives – increasing marketed supplies of food staples while maintaining low retail prices – are also key to continued poverty reduction, as smallholder incomes increase when they receive higher prices for their surplus marketed output, while lower retail food prices decrease the cost of living for both rural and urban households. Hence, these objectives figure prominently in Comprehensive Africa Agriculture Development Programme (CAADP) investment plans and the United States (U.S.) Feed The Future initiative.