INFLUENCE OF FARMER ORGANIZATIONS AS A MARKET INFORMATION SYSTEM ON MARKET ACCESS AND INCOME OF SMALLHOLDER VEGETABLE FARMERS IN BABATI DISTRICT, TANZANIA

ABSTRACT 
Vegetable production is of great importance in terms of nutrition improvement, income generation and food security. Africa Research in Sustainable Intensification for the Next Generation (Africa RISNG) action research project actively integrates vegetable farming and marketing practices in order to reduce the vulnerability of indigenous populations of Babati district located in the Manyara region of Tanzania. In Tanzania smallholder vegetable famers receive asymmetrical and incomplete market information which is costly. Mobilizing farmers into groups so as to access viable market information while enhancing their bargaining power is one way to overcome this challenge. However the extent to which this has been achieved has not yet been evaluated. This study sought to evaluate the influence of farmer organizations towards improving smallholder income in Babati. Objectives of the study were: to determine types of market information accessed by smallholder vegetable farmers through farmer organizations, determine factors influencing information seeking behaviour of vegetable farmers and determine effect of access to market provided by farmer organizations on smal holder vegetable farmer‟s income. The target population was smallholder farmers who grow vegetables within maize based farming systems. Multi-stage sampling technique was employed where by 250 smallholders vegetable farmers were interviewed using structured questionnaire. The results showed that the type of market (29%) is the most type of market information accessed by vegetable farmer through farmer organization. From the Poisson model the results show that distance to the market information source point has a negative influence on farmer‟s information seeking behaviour. In contrast, gender, education, income and group membership had a significant positive relationship with farmers‟ information seeking behaviour. In estimating the effect of access to market provided by farmer organizations on smallholder vegetable farmer‟s income, Propensity Score Matching (PSM) was used. The results indicate that farmers who had access to the market provided by farmer organization have more income (501691.413 TZS) than non member (405471.429 TZS). From the results, it is recommended that an enabling policy environment that establishes and strengthens farmer organizations be supported. This will assist in transforming smallholder farming as viable business ventures through increased productivity and increased household incomes while reducing rural poverty.

CHAPTER ONE 
INTRODUCTION 
Background of the study 
Agriculture is an important activity to the society. The sector plays a major role in terms of poverty alleviation, food security and economic growth (Balarane and Oladele, 2012). As such majority of the people in the world depend on agriculture with approximately 1.5 billion people being engaged in smallholder agriculture (Shaun et al., 2014). In Africa about 70% of the population lives in the rural areas and depends on the sector for their livelihood. The sector accounts for about 20% of Africa‟s Gross Domestic Product (GDP) (Economic Commission for Africa, 2004), 60% of its labour force and 20% of the total merchandise exports. 

In Tanzania the sector contributes about 26.7% to the Gross National Product (GNP) and 32% to the Gross Domestic Product (GDP) (food security, employment and foreign exchange earnings) (Horticulture Development Council of Tanzania, 2010). The sector is made up of different sub sectors like crops (food and cash) and livestock. Over the years, most of the cash crops like coffee, tea and sisal have mostly benefited large scale farmers with most smallholders concentrating on such crops like maize and beans. These crops have had minimum returns to smallholders. Therefore, to improve the livelihoods of smallholders, the government and development partners have encouraged smallholders to diversify to high value crops such as horticultural crops. 

The horticultural subsector is one of the upcoming subsectors in the country with a annual average growth of 9-12 percent per annum (Netherlands Enterprise Agency, 2017)).The growth of this subsector is more than double the overall annual growth rate of the agricultural sector. The subsector contributes to employment opportunities where by about 2.5 million people are employed. Hence this makes the industry a major employer within the agricultural sector. 

The growth of this subsector is as a result of the increased health awareness of people in terms of the benefits of eating fruits and vegetables (Dolan and Humphrey, 2000). Consequently, there is increased demand and market opportunity for horticultural produce in urban centres of both developing and developed countries. Due to this, smallholder farmers have an enormous opportunity to invest more in horticulture production especially vegetables. 

Vegetable production has received considerable attention in recent times. Vegetables are of great importance in terms of nutrition improvement, income generation, food security and improving resource use efficiency in agriculture. In Tanzania the total production of vegetables is about 1,869,485 tonnes (FAOSTAT, 2017). Most vegetables are grown on small scale despite the fact that horticultural crop usually generate higher earnings per unit area and represent an alternative for farmer with too small cultivable land to provide adequate income from field crops (Helen Keller International, 2004). Since vegetables can be grown in small landholdings, the subsector is attractive to smallholder farmers and can be promoted as an avenue to improve their livelihoods. As a result, smallholder farmers have diversified to vegetable production in order to increase their per capita income. 

Despite the importance of vegetables, their production is associated with high risk and uncertainty because they are a highly perishable produce. The perishable nature of vegetables necessitates effective marketing channels (Xaba and Masuku, 2012). According to Antwi and Seahlodi (2011), the success of vegetable growers (operation and decision) depends on market availability, accessibility and affordability. 

Access to markets for smallholder rural farmers, however, is fraught with challenges such as poor infrastructure as well as, up to- date market information (Magnus and Piters, 2010). Marketing information such as market prices guide farmers in making informed decisions about product planning and marketing place (Uchezuba et al., 2009). However, most smallholder famer‟s receive asymmetrical and incomplete market information. This is due to the fact that information is scattered across a variety of agencies, government departments and private sector organizations. This limits the chances of smallholder farmers accessing market information. 

In order to overcome asymmetrical and inadequate information problem, Market Information System (MIS) such as farmer organizations need to be enhanced so as to encourage a more competitive economic environment by reducing informational asymmetry between buyers and sellers of agricultural commodities. Therefore policy makers and the private sector should join together with smallholder farmers and design appropriate programmes to help them easily access complete and symmetry market information. 

One of the ways of enhancing market access through provision of market information to smallholder vegetable producers is by forming farmer organizations. Mobilizing producers into groups/associations and establishment of contractual arrangements between farmers and buyers (contract of farming) can be an important entry point to link farmers with buyers hence a market assurance to farmers and sufficient supply to buyers (Horticulture Development Council of Tanzania, 2010). Kaganzi et al., (2009) indicated that farmer groups in Uganda, through collective action, help meet basic market requirements for minimum quantities, quality and frequency of supply which they cannot achieve as individuals. They are able to access new markets arising in the context of market reform, government policy, and globalization. Moreover, marketing in groups reduces transaction costs of accessing inputs and outputs for smallholders and enable them to obtain necessary market information and secure access to new technologies, which allow them to compete with larger farmers and agribusinesses (Ellis and Bahiigwa, 2003). Due to this forming farmer groups has become one of the ways through which smallholder farmers can access markets. 

In Babati district-Tanzania the Africa Research in Sustainable Intensification for the Next Generation (Africa RISING) project funded by USAID in collaboration with World Vegetable Centre (WolrdVeg) and Tanzania Horticulture Association (TAHA) have come up with initiatives of integrating vegetables into maize-based systems for improved nutrition and income of smallholder farmers. The project has devoted much effort in encouraging the establishment of vegetable farmer organizations, while strengthening existing ones. These organizations are aimed at acting as a market information system to allow the coordinated produce to meet the demands of large volume regional markets, as well as institutional consumers. This effort aims at contributing to improving household food and nutrition security among the most vulnerable households and their members, especially women and children. 

Statement of the Problem 
Smallholder farmers‟ have integrated vegetables into their farming systems to increase and /or diversify their income as well as nutritional/dietary needs. In as much as many smallholders have adopted vegetable production, they have not realized the expected returns. Daily price fluctuations coupled with seasonality of supply leads to uncertainty. In Tanzania as is the case in many other Sub-Saharan African countries, smallholder vegetable farmers receive asymmetrical and incomplete market information which is costly. To overcome this, 

Africa RISING has promoted and encouraged commercial vegetable farming by smallholders through formation of farmer groups so as to provide market information and market access. However, the extent to which this has been achieved has not been evaluated. As such, there was a need to explore the influence of farmer organizations in providing market information and market access towards improving income. 

Research objectives 
General objective 
The general objective of the study was to contribute to improved livelihoods of smallholder vegetable farmers through enhanced market access in Babati district, Tanzania. 

Specific Objectives 
i) To determine the types of market information accessed by smallholder vegetable farmers through farmer organizations in Babati District, Tanzania. 
ii) To determine factors influencing market information seeking behaviour of vegetable farmers in Babati District, Tanzania. 
iii) To determine the effect of access to market provided by farmer organizations on small holder vegetable farmer‟s income in Babati District, Tanzania. 

Research Questions 
i) What are the types of market information accessed by smallholder vegetable farmers through farmer organizations in Babati District, Tanzania? 
ii) What are the factors influencing market information seeking behavior of vegetable farmers in Babati District, Tanzania? 
iii) What is the impact of access to market provided by farmer organizations on small holder vegetable farmer‟s income in Babati District, Tanzania? 

Significance of the Study 
Market information systems (MIS) are designed to enhance competition in the market by increasing market transparency and accessibility for all market participants, and in particular the weakest who are smallholder farmers. Farmers need information to deal with various problems confronting their farm operations. They need to decide what to produce and how much, and where to market in order to maximize their profit. Vegetables are perishable by nature and need immediate disposal in the market. Therefore vegetable farmers need an efficient market information system that can disseminate information and make farmers aware of existing market opportunities. Joining farmer groups enables smallholders to pool resources to enable them process (value addition) and enter into contractual agreement with buyers to sell their produce. By doing this it reduces transaction cost, gives assurance of the market, extension services and increase production leading to increased smal holder‟s vegetable producer‟s income. Farmer organizations as a Market Information System empower farmers by strengthening their bargaining power in order to increase their share of the retail proceeds from their produce. Information channelled through farmer groups tends to be more efficient and effective because it encourages competition and group members tend to motivate one another. Therefore, determining the influence of farmer organizations as a market information system to enhance market access and improve income will provide useful insights to both the producers and other actors on the importance of the system and how to enhance it so that it can operate effectively and efficiency towards improving smallholder income. 

Scope and Limitation 
Information asymmetry exists in any market system that has different actors. Tanzania agricultural sector has many players with different information needs. Linking these key players is crucial for market efficiency. However the study was focused on the influence of farmer organizations as a Market Information System (MIS) on income of smallholder vegetable producers who have 5 acres of land and below. Although they were many species of vegetables, this study only focused on Tomato, African eggplant and Amaranth cultivated at the area of the study under the framework of Africa Research in Sustainable Intensification for the Next Generation (Africa RISING). The study was conducted in Babati and involved Tanzanian Agricultural Productivity Program (TAPP), Babati agricultural offices, World Vegetable Centre (WorldVeg) and other existing development initiatives in the project region. The absence of detailed data from local authority offices and relevant NGOs offices mentioned above presented limitations for this study. To counter this limitation, the researcher collected primary data directly from the target group members to enlarge the data from secondary sources. 

Definitions of terms 
Indigenous vegetables: refers to a crop species or varieties genuinely native to a region, or to a crop introduced into a region where over a period of time it has evolved, although the species may not be native. 

Market information: refers to the information that helps the producer to make decision and plans for the product development activities. 

Market information system: In this study, is a farmer organization system that analyzes and assesses market information, gathered continuously from diverse sources. 

Asymmetric information: is the situation in which information is shared out in unbalanced manner leading to some parties receiving more or superior information compared to others. 

Transaction cost: is the cost of doing business or cost of exchange between two trading partners, in our case smallholder vegetable farmers and buyers. 

Smallholder farmer: is a farmer owning small based plots of land (5 acres and below) on which they grow subsistence crops. 

Market access: is the concept that describes the sum total of all skills acquired through experience or training that enable a farmer to participate by selling and maintain regular customers to his/her produce. 

Farmer organization: is a voluntary social group that is formed in communities which differ in size, common interest/objectives and degree of interaction among members. 

Household: is a person or group of persons who reside in the same homestead/compound but not necessarily in the same dwelling unit, have same cooking arrangements, and are answerable to the same household head 

Information Seeking Behaviour: is the situation where farmer demanding for information as a consequence of a need to satisfy some goal.

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Item Type: Kenyan Project Material  |  Attribute: 90 pages  |  Chapters: 1-5
Format: MS Word  |  Price: KSh900  |  Delivery: Within 30Mins.
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