This series on commodity risk management aims to disseminate the results of World Bank research that describes the feasibility of developing countries’ ability to utilize market-based tools to mitigate risks associated with commodity price volatility and weather.
(World Bank, Washington, DC, 2009-01)
Syroka, Joanna; Bunte, Kara
Malawi periodically experiences drought
leading to shortages of grain on the domestic market and a
sharp increase in consumer prices. Consumers, including many
of the poorest farmers in the country, experience difficulty
obtaining enough grain to meet their family requirements.
One method to reduce the risks of grain shortfalls is to
improve the capacity of farmers to produce enough grain even
when drought occurs, for example, through input subsidies
and efforts to improve water use efficiency. An additional
measure is to finance the establishment and distribution of
strategic grain stocks. However, in the occasional year when
drought is most extreme, supplementary assistance will still
be needed in the form of expensive food imports and,
possibly, food aid.