Competition between biofuel feedstock and food production: Empirical evidence from sugarcane outgrower settings in Malawi

Abstract

This paper analyses the implications of the expansion of biofuel feedstock production in Malawi on local food crop production. This represents a trade-off between two provisioning ecosystem services: biofuel feedstock (i.e. sugarcane) and food crops. Specifically, we assess household-level linkages between biofuel feedstock and food crop production among farmers involved in outgrower schemes around a large-scale plantation, sugar mill and ethanol distillery complex in Dwangwa, Central Malawi. Our analysis is based on a farm household survey that targeted sugarcane outgrowers (intervention group) and households not growing sugarcane (control group). We apply econometric and matching techniques to assess the impact of household participation in biofuel feedstock production on agricultural input expenditures for food crop production, land under food crops and investment in agricultural assets. In spite of limitations to establish causality, our results suggest that participation in sugarcane outgrower schemes is associated with larger amounts of land under staple food crops and higher purchases of farm inputs compared to the control group. The results further suggest that the expansion of biofuel feedstock production does not necessarily compromise household food production for those households involved in outgrowers schemes due to potentially positive intra-household linkages. We discuss under which circumstances this is possible, and whether and how other ecosystem services may be affected by sugarcane expansion.