An Analysis of Factors Affecting Smallholder Rice Farmers’ Level of Sales and Market Participation in Tanzania; Evidence from National Panel Survey Data 2010 -2011

Abstract

This study analyzed the determinants of market participation for smallholder rice farmers in the five major rice producing regions in Tanzania. The study used Tanzania National Panel Survey (NPS) data compiled data by FAO. A sample of 842 households from high rice producing regions (Mbeya, Morogoro, Shinyanga, Mwanza and Tabora) was extracted from the dataset. Quantitative as well as quantitative analyses were performed; quantitative analysis involved estimation of Weighted Least Squares (WLS) and the Tobit regression models were used to analyze factors affecting volume of sales and determinants of market participation respectively. The household socio-demographic characteristics of smallholder rice farmers were analyzed and discussed in relation to their influence on production and market participation. The WLS results indicated that 10 variable out of 11 variables included in the model were significantly influence the quantity of sold. While age has a positive relationship with quantity sold but was insignificant implying that age of the household head does not directly affect the volume of sales. Results of the Tobit regression model indicated that household consumption, land cultivated, livestock owned and dummy for rural areas indicated a positive significant relationship while non-farm income, dummy region for Mbeya region and Tabora region indicates that, a negative and significant relationship with market participation. Further, low rice production, underdeveloped transport infrastructure and lack of reliable markets closer to higher rice producing regions and inadequate access and use of improved seeds and input were found to be the main of the problems associated with smallholder farmers in the study area. Hence, we discuss and recommend some policy implications based on the study findings.

Keywords: Agricultural Marketing, Market Participation, Smallholder rice Farmers, rice Production, Tanzania