Value chain and rural livelihoods: analysis of acacia mearnsii (black wattle) activities in Njombe and Lushoto Districts

A DISSERTATION SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF SCIENCE IN ENVIRONMENTAL AND NATURAL RESOURCE ECONOMICS OF SOKOINE UNIVERSITY OF AGRICULTURE. MOROGORO, TANZANIA.

Despite the positive impact of Acacia mearnsii (Black Wattle) production presented in literature as an alternative source of energy and income for rural poor, the value chain for black wattle in terms of who are the actors along the chain, what value addition activities are performed and economic performance at the main node have received low research attention. This study analysed the value chain of, and its contribution to the rural livelihoods in Njombe and Lushoto Districts. Data were collected from a random sample of 178 black wattle chain actors using structured questionnaire supplemented by the secondary data. Price, profit and gross margins were determined to examine efficiency at different nodes along the value chain. Descriptive statistics were obtained using SPSS software. Results revealed that black wattle activities are important source of income and fuel energy in the sample villages. Various value addition activities were done though they use local methods which led to low return. In general, both horizontal and vertical coordination along the value chain actors were weak. All actors including producers, processors and traders in the black wattle value chain were not organized to safeguard their interests. Factors that influenced (p<0.05) return were cost of labour and area under black wattle production. The results also show that black wattle contributes to improved livelihood of producers. Results of profitability analysis indicated variations in the gross margin with the higher margin (TZS 2 975 million) obtained by barks processors and TZS 2 536 580 by traders followed by TZS 717 111 of charcoal processors while producers had the lowest gross margin (TZS 567 632.50). Based on findings of this study, it is recommended that actors use improved value addition methods, farmers organise themselves into groups to enjoy economies of scale, improve infrastructure, market information and extension services.