The Shadow of Success: Rural Differentiation and the ‘Produced Poor’ in a Malawi Agricultural Development Project

Smallholder agricultural projects are central to rural poverty reduction, yet their distributional outcomes remain underexplored. Using mixed methods (qualitative interviews and an 804‐household survey analysed via PSM‐DID), this paper examines a decade‐long Malawi project deemed successful by conventional metrics. Project participation raised income by 15%–20% overall, but surplus‐selling farmers gained 32%–48% more than subsistence farmers and a four‐group analysis reveals project‐driven amplification of pre‐existing inequality. We argue that market‐oriented interventions can institutionalise rural differentiation and produce new forms of poverty. Programme design and evaluation must therefore attend to intra‐community equity, disaggregating outcomes by baseline assets and gender rather than relying on aggregate averages.