The impact of Free market economy on tobacco cooperative societies. A case study of Western zone tobacco growers cooperative union (WETCU) in Tabora region.

Desssertation

Cooperatives as grassroot organizations have engaged themselves in the provision of agro-marketing and of other social services. Cooperatives thus play a key role of promoting development, hand in hand with the government, in the rural as well as in the urban areas. Actually in that way, they have, in deed, been agents of socio­ economic change and for poverty alleviation. After market liberalization, coops fail to deliver and performed poorly under competition partly due to the withdraw of government guarantees. This report is the output of the research study which analyses the impact of free market economy on tobacco marketing cooperatives, in Tabora region as a case study. The study successfully covered 21 randomly selected primary cooperative societies (PCS) in three branches of Western Zone Tobacco Growers Cooperative Union (WETCU). All the PCSs were tobacco marketing cooperative societies. Secondary data were collected from published materials, handbooks, files, and other related documents from WETCU, TTB, association of tobacco companies (ATTT) and the district cooperative offices as well as Regional commissioner’s office. The general objective of this study was to evaluate the performance of cooperative union before and after free market economy. The research findings reveal that free market economy have both advantages and disadvantages to cooperatives. As for the issue of tobacco cooperative societies, there is an improvement on input supply and distribution, extension services, the market for the crop, payments to the farmers and financial stability for tobacco cooperative union (WETCU). However, the findings show that there are no improvements on input price, interest rates on input credit and tobacco marketing have continued to encounter problems. Tobacco Leaf Commercial company (TLCC), which is Ill considered to be an association formed out of collusion of Tanzania tobacco traders, lack of government intervention, poor pricing system, contract farming and low producer prices compared to cost of production are the eminent problems. In this study, the researcher found out that the government efforts, in the present stance towards the restructuring of coops along its promotional role seemed to have less enthusiasm, less seriousness, and less commitment towards the cooperative revival. The study, under the above circumstances, show that the market liberalization has both advantages and disadvantages to cooperatives, and to farmers. Recommendations, based on above findings, are emphasize on the government appropriate coops development and implementation policy. Also, the government should take into consideration the importance of creating a conducive environment under which cooperative societies will be able to operate and thrive under current free market and trade liberalization macro-economic policies. Alternatively, the tobacco farmers can opt for other agricultural crops such as maize, ground nuts, paddy, cotton or paprika which can do better than tobacco.