Production and marketing of paddy and cotton in Ulanga district of Tanzania

Master of Science in Agricultural Economics

Agriculture market reforms have been underway in Tanzania since mid 1980s. The ultimate objective of such policy change was to improve agricultural marketing efficiency in the economy. The extent to which this goal has been achieved in various parts of the country needs to be analysed. This study therefore attempts to assess the agricultural marketing problems in Ulanga district, Morogoro, Tanzania. The main objective of the study was to assess the marketing efficiency of paddy and cotton systems in the study area with a view to identifying areas of weaknesses which need improvements. A sample of 85 paddy and/or cotton producers and 40 paddy traders were interviewed using structured questionnaires. The production season was confined to 1994/95 production season. The tools of analysis used include descriptive statistics, correlation and regression. The results of the analysis revealed that (i) farm gross margin and returns to inputs for both crops were very low; (ii) in terms of market concentration ratio, and pricing efficiency there was some improvements in the paddy marketing system due to competition among traders; (iii) operational and pricing efficiency indicated that there is still a lot more to be done to improve the situation. For both crops, production and marketing costs in some operations were found to be unnecessarily high because of poor infrastructure and lack of competition on the part of cotton sector; and (iv) paddy producers were being discouraged by price instability.From the above results it is recommended that (i) paddy productivity be increased using appropriate technology to enable producers benefit from low average production cost; (ii) crop buying posts be established in each-village where exchange could take place. Apart from reducing collection cost to traders the buying posts would increase market transparency thereby motivating market participants which could result into improved marketing efficiency; (iii) the problem of small working capital for traders could be solved by carefully planned and monitored revolving fund scheme. This could start by identifying honest traders in the area; (iv) to minimise price fluctuations in the paddy marketing systems forward contracts and futures trading could be encouraged. For cotton marketing it is recommended that (i) cotton productivity should be increased so that private buyers could be motivated to invest in the cotton sector in Ulanga District; (ii) the present ginneries should be privatised so that cotton buyers in the area could have access to them at a ginning fee; (iii) the long bureaucratic procedure before obtaining licences to handle cotton should be minimised. This could be achieved by leaving this task with the Tanzania Cotton Lint and Seed Board TCLSB); (iv) road communication system in the study area if improved could facilitate production and marketing of agricultural products in the study area.

The German Academic Exchange Service (DAAD)