Malawi's Agricultural Development and Marketing Corporation (ADMARC), once the backbone of the country's food security system, is effectively bankrupt. In July 2025, the 54-year-old parastatal shut down all operations nationwide, leaving 349 markets closed, farmers stranded with unsold crops, and millions of households exposed to soaring food prices.
Experts warn that without radical structural reform, ADMARC will remain a fiscal black hole. But if properly overhauled, they argue it could generate up to US$200 million annually in export earnings, while restoring food security for millions.
On July 30, 2025, ADMARC announced it was ceasing operations after going three months without government funding. It had no maize stocks, no working capital and unpaid employees. The shutdown came amid Malawi's worst food crisis in years.
Between October 2024 and March 2025, an estimated 5.7 million Malawians faced acute food insecurity. By early 2025, the price of a 50kg bag of maize had jumped to K85,000, from K60,000 just months earlier. In Chiradzulu, maize sold at K1,700 per kilogram.
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For families like Anita Kang'ona's in Bangwe Township, Blantyre, the impact was devastating. "We have resorted to one meal per day," she told local media.
A collapse years in the making
ADMARC's failure was not sudden. In August 2022, government suspended its operations over corruption and internal conflicts, placing more than 4,000 staff on paid leave. By January 2025, the corporation faced a K25 billion compensation award to retrenched employees, prompting courts to seize 94 vehicles and freeze its bank accounts.
But the deeper problem is institutional.
Since its creation in 1971, ADMARC has been forced to juggle contradictory mandates: act as a social safety net by stabilising maize prices, support smallholder farmers in remote areas, and operate as a profitable commercial trader.
These objectives clash. Buying maize at guaranteed prices and selling at subsidised rates is a social welfare function that requires permanent subsidies. Running 349 rural markets generates losses. Competing with private traders requires speed and efficiency ADMARC has never had.
The result has been decades of inefficiency, political interference and financial hemorrhage. As recently as 2015, about 75 percent of the Ministry of Agriculture budget went to input support programmes, including ADMARC operations. Yet the World Bank found these programmes "failed to reach the most productive farmers" and delivered little improvement in food security.
Dr Kingdom Kwapata of LUANAR says ADMARC's entanglement of social and commercial roles has been "a fundamental barrier" to its survival.
In March 2025, former CEO Daniel Makata told Parliament ADMARC needed K300 billion to buy 250,000 metric tons of maize for price stabilisation. Government offered just K20 billion, enough for only 17,000 tons.
"If we don't buy, that means we will have nothing to sell," Makata warned.
The reform blueprint: split the giant
Reformers propose a radical but practical solution: split ADMARC into two separate entities.
A social arm would handle maize procurement, storage and distribution, maintaining strategic reserves and stabilising prices. It would operate as a nonprofit under direct government control.
A commercial arm would focus on non-maize crops -- groundnuts, legumes, rice, cassava, chillies -- plus processing into oils and flours, farm input distribution and export trading. It would run under private-sector governance, performance contracts and potentially as a limited liability company.
This model draws from Kenya's National Cereals and Produce Board (NCPB), which separated social food security functions from commercial trading. Research by Michigan State University found that a 10 percent increase in NCPB's maize price raised household production by 2.5 percent and net crop income by 2.6 percent.
Linking Malawi to global markets
Beyond structural separation, reformers want ADMARC plugged into regional and global commodity exchanges, inspired by Ethiopia's Commodity Exchange (ECX).
Before ECX, Ethiopian farmers received barely 35-38 percent of export value. After reforms, transparent pricing and electronic trading tripled volumes of high-grade coffee and significantly expanded exports.
The ECX already has cooperation agreements with Malawi's AHL Commodity Exchange, offering a technical pathway.
The reform vision includes listing ADMARC's commercial arm on the Malawi Stock Exchange, expanding to the Lusaka Exchange, joining the African Commodity Exchange and eventually linking to global platforms such as the Chicago Mercantile Exchange.
Proponents estimate these reforms could raise US$50-100 million in initial capital and generate US$100-200 million annually in value-added exports.
Reality check: a broke economy
The ambition collides with harsh macroeconomic reality.
By end-2024, Malawi's forex reserves stood at 0.4 months of imports. Public debt hit 88 percent of GDP. The IMF programme collapsed in May 2025. Over 74 percent of firms cite forex shortages as their top constraint.
Against this backdrop, finding even K500 billion to revive ADMARC looks unrealistic.
Parliament has proposed directing K60 billion to ADMARC for maize purchases, with another K240 billion from Treasury. Grain traders want funding split with the National Food Reserve Agency.
Politics, patronage and paralysis
Reform also faces political obstacles. ADMARC has long been used as a tool of patronage, controlling maize flows for political gain.
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Analyst Tamani Nkhono-Mvula argues ADMARC historically extracted wealth from rural farmers into urban elite networks, with little multiplier effect for smallholders.
Breaking this cycle means confronting private traders who profit from ADMARC's failure, politicians who use maize for votes, and elites with interests in agricultural estates.
Three futures for ADMARC
Dr Kwapata outlines three scenarios:
No reform: ADMARC limps along, private traders dominate, food crises persist. The World Food Programme continues feeding millions.
Partial reform: Emergency funding without structural change. ADMARC survives but remains a fiscal burden.
Full reform: ADMARC splits, commercial arm exports, creates over 10,000 jobs, smallholders access transparent markets and Malawi earns forex.
The IMF is blunt: Malawi needs structural reforms to grow and attract investment.
For the 80 percent of Malawians who depend on smallholder farming, ADMARC's fate is not theoretical. It determines whether they sell their crops fairly, survive the lean season and feed their families when rains fail.
Whether ADMARC becomes a modern agricultural powerhouse or remains a starving giant may decide not just the future of Malawi's food system -- but whether African parastatals can finally adapt to economic reality.
