Assessing the development strategies for the Malawian dairy sector: A spatial multimarket model

Dairy is a key investment sector for the Government of Malawi. The strategies proposed to develop the sector have been three: (1) reinforcement of the formal supply chain (i.e., farmers delivering milk to milk bulking groups and these to processors, who pasteurise it and transformed into a number of dairy products); (2) generation of mini dairies (i.e., micro-processing of milk delivered to a milk bulking group); (3) selling directly raw milk to consumers. The purpose of this paper is to explore the aforementioned strategies in terms of the sector economic growth and food security. To study them a spatial multimarket model was constructed for the Malawian dairy sector, which considers milk production in the three regions (North, Central and South), the different processors, consumers and the interaction with the informal market. The results from the simulation indicate that strategies (1) and (3) have more possibilities in terms outcomes than strategy (2). The paper also explores potential roles for the Government and donors.