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Agricultural Development and Marketing Corporation
The Agricultural Development and Marketing Corporation, or ADMARC, was formed in Malawi in 1971 as a Government-owned corporation or parastatal to promote the Malawian economy by increasing the volume and quality of agricultural exports, to develop new foreign markets for the consumption of Malawian agricultural produce and to supporting Malawi’s farmers. It was the successor of a number of marketing boards of the colonial-era and early post-colonial times, whose functions were as much about controlling African smallholders and generating government revenues as in promoting agricultural development. At its foundation, ADMARC was given the power to finance the economic development of any public or private organization. In its first decade of operation, ADMARC was considered to be more business-like and less bureaucratic than similar African parastatal bodies, but from its formation it was involved in the diversion of resources from smallholder farming to tobacco estates, often owned by members of the ruling elite. This led to corruption, abuse of office and inefficiency in ADMARC, and declining world tobacco prices made it insolvent by 1985. To obtain World Bank loans, ADMARC had to be partially privatised, but the neo-liberal economic policies imposed on it by the World Bank forced it to cut fertilizer subsidies and contributed to severe food shortages in 1992. Following the 1992 shortages, international aid donors demanded a return to multi-party politics by 1994 and President Banda who had ruled since 1964 was removed from office. In the aftermath of this change, ADMARC’s role was reduced to that of a buyer of last resort and of maintaining a strategic reserve of maize through domestic and foreign purchases to promote food security. In 1996, the World Bank again intervened, criticising ADMARC’s importation of maize as an unjustified subsidy and requiring it to give up control of grain imports. ADMARC’s record of promoting food security and maintaining a strategic reserve from domestic purchases after 1996 was patchy: its intervention prevented a famine in 1998, but financial pressures in 2000 and 2001 forced it to sell much of its reserves just before a poor harvest in 2002, resulting in food shortages and famine. A third round of World Bank intervention in 2002 forced ADMARC to reduce its financial losses by reducing its trading operations and to allow private sector competition. This market liberalisation had mixed results: ADMARC survived it and by 2009 it was growing again. It still exists because it has not been possible to create a comprehensive private-sector marketing system, but it is criticised as inefficient and wasteful.
==The Forerunners of ADMARC ==
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