Household resilience among sugarcane outgrowers: an empirical assessment of the structured Dwangwa Cane Growers Limited scheme in Malawi

Abstract This study examines the effect of a structured outgrower scheme on household resilience using data from 312 sugarcane farmers in Dwangwa, Malawi. Resilience is measured using a composite Resilience Capacity Index (RCI) grounded in the Sustainable Livelihoods Framework and Local Adaptive Capacity framework. Propensity Score Matching, Inverse Probability Weighting, and Lewbel heteroskedasticity-based instrumental variable estimation are used to address observable selection and potential endogeneity. To identify where group differences are concentrated, the analysis also disaggregates the composite RCI into five standardized factor scores derived from the rotated factor structure. DCGL-affiliated farmers have a significantly higher mean RCI score of 62.88 than farmers in other associations, whose mean is 45.52. The factor-score analysis shows that this aggregate advantage is concentrated mainly in institutional-production access, particularly coordinated access to irrigation and farming inputs, and in crop diversification. Differences in productive assets and diversification and in social-health support are small and statistically insignificant, while the difference in human-financial capacity is only marginally significant. The findings demonstrate the value of combining the composite RCI, which provides a concise overall measure for impact estimation, with factor scores that reveal the dimensions underlying the group difference. Policy should therefore prioritize extending reliable irrigation, input facilitation, credit access, transparent contractual arrangements, and other structured support services to farmers outside established schemes.