Research on World Agricultural Economy

What Drives and Shapes Smallholder Participation in Agricultural Commercialization in Malawi? Evidence from the AGCOM Project

Nicholas Delson Mkandawire

Department of Agricultural and Applied Economics, Lilongwe University of Agriculture and Natural Resources, Li‑longwe P.O. Box 219, Malawi

Julius Henderson Mangisoni

Department of Agricultural and Applied Economics, Lilongwe University of Agriculture and Natural Resources, Li‑longwe P.O. Box 219, Malawi

Innocent Pangapanga‑Phiri

Department of Agricultural and Applied Economics, Lilongwe University of Agriculture and Natural Resources, Li‑longwe P.O. Box 219, Malawi; Centre of Agricultural Research and Development, Lilongwe University of Agriculture and Natural Resources, Li‑longwe P.O. Box 219, Malawi

Kennedy Machila

Department of Agricultural and Applied Economics, Lilongwe University of Agriculture and Natural Resources, Li‑longwe P.O. Box 219, Malawi

DOI: https://doi.org/10.36956/rwae.v7i2.2734

Received: 14 September 2025 | Revised: 30 October 2025 | Accepted: 3 November 2025 | Published Online: 7 May 2026

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Abstract

Smallholder agricultural commercialization is increasingly recognized as a pathway for rural transformation, yet its determinants remain underexplored in Malawi. This study examines both the decision to participate in markets and the intensity of commercialization among 2,400 households across 15 districts using data from the Agricultural Commercialization Project (AGCOM) collected in 2023. A double hurdle model was employed, allowing separate analysis of market participation (Probit) and commercialization intensity (Tobit) after diagnostic tests indicated no significant sample selection bias. Results show moderate commercialization, with an average Household Commercialization Index (HCI) of 0.61; 67% of households were commercialized (HCI > 0.5), while 33% were non-commercialized. By value chain, layers (HCI = 0.94), honey (0.91), and coffee (0.88) were the most commercialized, whereas beeswax was the lowest (0.56). Market access, landholding size, labor availability, and institutional support significantly influenced commercialization. Each additional kilometer from a main road reduced participation by 2.4%, households with more working-age members were 3% more likely to commercialize, and larger landholdings increased commercialization probability by 2.3% per hectare, with diminishing returns beyond 7 hectares. AGCOM participation, credit access, and television ownership further enhanced commercialization. Regional and agroecological disparities were evident: farmers in the North were 27.5% less likely to commercialize, while those in the South, Lakeshore Plains, and Highlands were 8.6%, 24.5%, and 29.4% more likely, respectively, compared to reference areas. The findings highlight the importance of infrastructure, financial inclusion, ICT-enabled information, and programmatic support. Policy should prioritize these areas, while future research should track commercialization dynamics and their links to food security and resilience.

Keywords: Agricultural Commercialization; AGCOM Project; Smallholder Farmers; Market Participation; Credit Access; Double Hurdle Model and Road Access

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