Disordering the Market: The Liberalisation of Burley Tobacco in Malawi in the 1990s

Abstract

The Malawian tobacco sector has changed considerably in the past decade: the production and marketing of burley tobacco had previously been highly regulated and is now liberalised. The sociological perspective from which this article approaches economic life sees no inherent contradiction between market and regulation: markets are seen as socially constructed, and within regulated systems there can be elements of competition. Elements of regulation are thus brought to light that have not received attention before and it is argued that, while the exclusion and exploitation of smallholders have rightly been stressed, the benefits of regulation for the long-term viability of the sector have been overlooked. From this long-term perspective, it is irrelevant whether burley is grown by smallholders or on large estates. The article describes the policy environment in which liberalisation took place; analyses the role of the tobacco sector in the Malawian economy; describes the evolution of the institutional structure of the industry up to liberalisation; points out the strains and stresses in the regulatory system on the eve of liberalisation; describes the unexpected consequences that arose after liberalisation; places the changes in the industry against the background of international tobacco marketing; and, finally, analyses the gradual and regulated smallholder involvement in the production and marketing of burley through clubs before liberalisation. It is shown that regulation is not intrinsically detrimental to the smallholder. The conclusion places the case in a wider debate on state and economy in Africa. State regulation is not necessarily antagonistic to the emergence of viable economic sectors, and neither is the supposedly free play of market forces intrinsically conducive to the interests of the producer.