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Food Security

, Volume 10, Issue 2, pp 473–488 | Cite as

An evolution in the middle: examining the rise of multinational investment in smallholder grain trading in Zambia

  • Nicholas J. Sitko
  • Brian Chisanga
  • David Tschirley
  • Thomas S. Jayne
Original Paper

Abstract

This article examines the causes and consequences of multinational investment in smallholder grain markets in Zambia. We show that direct purchases of smallholder maize and soybeans have increased rapidly over time and amounted to 90,000 mt of maize and 5600 mt of soybeans in 2014/15. Factors influencing this investment wave include: a large and growing segment of relatively larger smallholder farms, rapid expansion of processing capacity for animal feed and soybean oil, and reasonably stable macro-economic and foreign investment policy. This investment wave is associated with a decline in farm-gate to wholesale price margins of 13%, increased access to input credit and market price information for smallholders, and perceptions of increased market transparency by farmers. We find no evidence of market concentration driven by entry of these firms, as competition from domestic market traders remains robust. Some, but not all, of the factors driving this investment wave are shared by other countries in the region, suggesting an uncertain future for regional multinational investment in smallholder grain markets.

Keywords

Africa Commodity markets Small-scale farm Food system Multinational Price margins 

Notes

Compliance with ethical standards

Conflict of interest statement

The authors certify that they have NO affiliations with or involvement in any organization or entity with any financial interest (such as honoraria; educational grants; participation in speakers’ bureaus; membership, employment, consultancies, stock ownership, or other equity interest; and expert testimony or patent-licensing arrangements), or non-financial interest (such as personal or professional relationships, affiliations, knowledge or beliefs) in the subject matter or materials discussed in this manuscript.

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Copyright information

© Springer Science+Business Media B.V., part of Springer Nature and International Society for Plant Pathology 2018

Authors and Affiliations

  • Nicholas J. Sitko
    • 1
  • Brian Chisanga
    • 2
  • David Tschirley
    • 3
  • Thomas S. Jayne
    • 3
  1. 1.Food and Agriculture Organization of the United NationsRomeItaly
  2. 2.Indaba Agricultural Policy Research InstituteLusakaZambia
  3. 3.Department of Agriculture, Food, and Resource EconomicsMichigan State UniversityEast LansingUSA

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