The last decade has seen a resurgence of parastatal crop marketing institutions in subSaharan
Africa, many of which cite improving food security and incomes as key goals.
However, there is limited empirical evidence on the welfare effects of these programs. This
article considers one such program, the Zambian Food Reserve Agency (FRA), which
purchases maize from smallholder farmers at a pan-territorial price that typically exceeds
maize market prices in surplus production areas. Using both fixed effects and an instrumental
variables approach combined with correlated random effects, we estimate the effects of the
FRA’s maize marketing activities on smallholder farm household welfare. Results suggest
that FRA activities have positive direct welfare effects on the small minority of smallholder
households that are able to sell to it. However, the results also suggest negative indirect FRA
effects, as higher levels of FRA activity in a district are associated with higher levels of
poverty.