Linking small scale farmers to market: an evaluation of agricultural marketing system development programme in arumeru district, Tanzania

Master's Dissertation

The objective of this study was to evaluate the impact of institutions supporting the marketing system (particularly AMSDP programme as case study) in the linking of small scale farmers to markets following market liberalization in Tanzania. Thus the study attempted to identify different factors that influence smallholder farmer’s participation to the markets. It was expected that the identification of factors and the extent to which they influence farmers’ participation to the market could assist institutions in formulation of policy intervention to stimulate participation of small scale farmers to agricultural product markets. Transaction costs originate from a number of sources which include information asymmetries, enforcement of trade contract, negotiation, and monitoring influence on farmers’ participation to the market. The study hypothesized that decision of smallholder farmers to participate to the markets is influenced by transaction costs, household characteristics and the level of market orientation. In order to test the hypothesis that these factors influence decision of smallholder farmers’ participation to the markets, logit model was estimated using survey/data from randomly selected 163 households. The results show that farming learned through extension officer and education of the household positively and significantly influenced the probability of household participation to the market in the study area. On the other hand, the distance to the market and the age of the household head were negatively and significantly associated with the probability of smallholder fanners participating to the market. Size of the farm cultivated, road condition and household size were positively related to household participation to the market. The study provides recommendations that would reduce impediments of farmers’ participation to the markets. Institutional support in provision of market information, training, and extension services, could facilitate the establishment of smallholder cooperatives (groups) and association that would empower smallholder farmers and enable them to access the markets easily. Mechanisms should be established to ensure NGOs and Local government become the main mediator of contracts between companies and small-scale farmers in cases where they are required to cultivate a certain crop, particularly non traditional crops so that both groups may benefit.

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