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The third in a series of seven case studies examining national responses to the commodity price problem, this study focuses on how Malawi has addressed price volatility in its tobacco sector.

Agriculture is the driving force of Malawi's economy, and tobacco is the country's primary crop. However, continued tobacco price volatility and a long-term trend of declining prices has forced Malawi to consider new ways of stabilizing producer and government incomes, in the hopes that these incomes can then be used to invest in economic diversification.

This paper presents a critical review of the existing and potential measures available to stabilize tobacco incomes in Malawi. It begins by examining the extent of Malawi's dependence on tobacco and the crop's persistent price fluctuations. The paper then details the approaches used within the country to stabilize tobacco revenues, before concluding with recommendations for producers and policymakers to move forward.