Development Economics - Malawi restricts trade in corn (Optional)

This video demonstrates how government policies toward agriculture can often be quite irrational. In Malawi, one of the poorest nations in the world, corn is very important to the economy. Corn represents 60% of Malawi's growing land and 70% of the calories consumed. Taking this into account, a bad corn harvest presents serious problems. Corn prices tend to be very volatile, and increased trade could help stabilize the price of corn. But only 15% of corn is traded. When prices for corn spike, the policy response has been price controls, providing less incentive for Malawian farmers to bring corn to market. The government has also imposed export bans and import bans on corn, making the supply crisis even worse. Because of this, black markets have emerged for corn in Malawi. Hunger has resulted from these misguided policies. Development Economics course: http://mruniversity.com/courses/development-economics-0 Ask a question about the video: http://mruniversity.com/courses/international-trade/malawi-restricts-trade-corn#QandA Next video: http://mruniversity.com/courses/development-economics/clove-monopoly-optional