The economics of food aid under subsistence farming with an application to Malawi

► We use a non-separable partial equilibrium model to study food-aid and production. ► Food-aid elasticities of production depend on if food-aid changes demand or supply. ► Self-sufficiency and income diversification lead to positive food-aid elasticities. ► Large negative impacts are unlikely given production and income shares and behaviour. ► Estimations for Malawi support a small positive food-aid elasticity of production.