Participation in pro poor agro based enterprises in Malawi: do households’ poverty levels change automatically?

This paper explores factors that influence households’ engagement in pro poor agro enterprises and examines the impacts of such small and medium scale enterprise on households’ poverty reduction. The paper approaches the objective by estimating a multivariate and data censoring analyses on 1000 household dataset from Malawi. The paper found that fish and mushroom farming, cassava flour processing, pig and chicken rearing, rural bakeries, and other have positive effect on household poverty levels. Pro poor agro based enterprises reduced household poverty by 8-24% among poor household in Malawi. However, the data depicts that pro poor small and medium scale businesses owners are challenged by lack of credit, low bargaining power, high input costs, low product prices and lack of reliable markets. The paper recommends mainstreaming factors and market based barriers that affect participation in agro based enterprises in Malawi. The paper also suggests that pro poor programs ought to be gender responsive at all levels of their operations.