Effect of privatisation on the productivity of sugarcane out-growers in Dwangwa Cane Growers Limited, Malawi

Davies Madalitso Luhanga, Patrick Kambewa, Levison Chiwaula & Spy Munthali

Abstract
This study examines the impact of privatisation on the productivity of smallholder sugarcane out-growers in Malawi using a case study of Dwangwa Cane Growers Limited (DCGL). The study uses the autoregressive distributed lag model and finds that privatisation had a significant positive impact on the sugarcane productivity of the DCGL scheme, both in the short run and the long run. Furthermore, it shows that price incentives alone cannot drive productivity growth and highlights the significance of sustainable fertilisation practices. The study also underscores the sensitivity of sugarcane productivity to variations in rainfall, with excessive rainfall having adverse effects, emphasising the need for strategies to manage waterlogging. To improve productivity, the study recommends maintaining a supportive framework for out-growers, restructuring institutional arrangements such as better technical assistance and affordable access to credit within the out-grower schemes, revisited pricing structures, ensuring sustainable use of fertilisers and investing in disaster management strategies.