10% by expatriates. The ownership share of expatriates and government peaks at 100-500 ha and that of ‘others’ in the > 500 ha group. About a third of estates have tenants; the share of estates with tenants peaks at close to 50% in the 10-100 size category. In contrast to other countries where large farms produce bulk commodities and often generate little employment (Ali _et al._ 2015), many of Malawi’s estates are labor intensive. Permanent or temporary male (female) labor is hired by 64% (27%) and 70% (56%) of estates respectively. Demand for permanent labor per ha increases with size to about 0.9 males and 0.6 females in the largest category though the pattern for temporary labor is more volatile.

Comparing smallholders to estates provides interesting insights in a number of respects (table 6). First, for estates, 15% of allocated land is operated, a share that decreases from 88% in the group below 5 ha, a figure that is comparable to the intensity of land utilization by smallholders, to 12% in the above 500 ha group (table 6). _Prima facie_ this provides some support for claims about unused or underused estate land that have been a recurrent theme in Malawi’s policy debate (Holden _et al._ 2006). Second, production structure and cropping patterns differ between smallholders and estates: 42% of estate area is devoted to tobacco, followed by maize (39%), groundnuts (7%), and other crops.

The data also suggest that for all crops except cassava smallholders’ yields are significantly above those by estates. Non-parametric regressions for yields of tobacco, maize, groundnuts and cassava against the log of farm size using the pooled sample of smallholders and estates in figure 3 graphically illustrate that, with the possible exception of cassava, adding large farms to the sample of smallholders does not lead to a reversal of the negative relationship between farm size and yields on land area actually cultivated; to the contrary the relationship is robust and rather tightly estimated. While these are yields rather than profits, the share of estates using purchased inputs and the mean per hectare value of such inputs by those who use them is significantly above the equivalent figure for smallholders. This suggests that the relationship between farm size and profits is unlikely to be positive. It would be of great interest to examine if profits or land use intensity (by the estate owner or tenants) are higher on estates with no overlapping registered claims or valid lease documents to explore if, say, tenure insecurity reduced productivity or prevented estates from enhancing income and overall production by leasing out part of their land to smallholders or increasing the number of tenants they employ. Unfortunately, estate data are not georeferenced, making overlays with administrative records that would be needed to conduct such analysis impossible.

# **4.2 Assessing impacts of estates on nearby smallholders**

If access to modern technology is limited or factor markets are imperfect, commercial farm establishments may benefit neighboring smallholders by improving their knowledge of improved techniques and allowing easier access to factor and output markets. The rationale for the latter is that if the volume of potential transactions in any given location is limited, high transaction costs may well ration smallholders out of such 12