MINISTRY OF AGRICULTURE Directorate of Economics Research Paper Series Republic of Mozambique Income Poverty Effects of Expansion and Policies in Cash Cropping Economies in Rural Mozambique: An Economy-wide Approach

The Directorate of Economics of the Ministry of Agriculture and Rural Development maintains two publication series for research on food security issues. Publications under the Flash series are short (3-4 pages), carefully focused reports designated to provide timely research results on issues of great interest. Publications under the Research Paper series are designed to provide longer, more in-depth treatment of food security issues. The preparation of Flash reports and Research Reports, and their discussion with those who design and influence programs and policies in Mozambique, is an important step in the Directorate's overall analyses and planning mission. Comments and suggestion from interested users on reports under each of these series help identify additional questions for consideration in later data analyses and report writing, and in the design of further research activities. Users of these reports are encouraged to submit comments and inform us of ongoing information and analysis needs. Adriano Chamusso National Director Directorate of Economics Ministry of Agriculture and Rural Development iii ACKNOWLEDGEMENTS The Directorate of Economics is undertaking collaborative research on food security with Michigan State University's Department of Agricultural Economics. We wish to acknowledge the financial and substantive support of the Ministry of Agriculture and Rural Development of Mozambique and the United States Agency for International Development (USAID) in Maputo to complete food security research in Mozambique. Research support from the Bureau of Economic Growth, Agriculture and Trade program of USAID/Washington also made it possible for Michigan State University researchers to contribute to this research. Additional financial support was provided by Italian Cooperation in Mozambique through CEPAGRI, and the Ministry of Agriculture of Mozambique. This report does not reflect the official views or policy positions of the Government of the Republic of Mozambique, nor of USAID, nor of Italian Cooperation. This study was done in very close collaboration with the Department of Policy Analysis (Directorate of Economics) and CEPAGRI (Centre for the Promotion of Commercial Agriculture) in the Ministry of Agriculture. Logistical support was provided by the Tete Province Branch of the Department of Economics of the Ministry of Agriculture. We also gratefully acknowledge the field assistance provided by DUNAVANT-Mozambique and Companhia Nacional do Algodão (cotton companies in Tete) and Mozambique Leaf Tobacco and DIMON-Mozambique (tobacco companies). It includes an Executive Summary, and was reformatted to be published as a stand alone piece. The data utilized for this study—the Social Accounting Matrix (SAM) for Contract Farming (CF) …