Sokoine University of Agriculture

Economic impact of contract farming on income of smallholder farmers: case study of Paprika contract farming in Mbozi district,Tanzania

Show simple item record Kephas, Siwingwa Adam 2014-12-01T07:29:24Z 2014-12-01T07:29:24Z 2011
dc.description.abstract This study provides empirical evidence on economic impact of contract farming on the income of smallholder farmers of non traditional crops. Specifically it analyses the requirements for farmers’ participation, factors that determine income and effect of paprika contract farming on household income and identifies constraints and prospects of contract farming. A cross section research design was adopted and a purposeful sampling procedure was used to select villages and wards and a total of 150 farmers were selected randomly for interview. Using probit model, results show that access to credit, livestock ownership, marital status and access to extension services increase the probability of farmers’ participation in contract farming at (p<0.05). Leadership, distance from the village office, household size and ownership of irrigated land were found to have negative effect while land ownership, household family labour, education level, and gender were found to have positive effect on participation but not significant. The results confirm the hypothesis that households with large endowment tend to participate in contract farming. Using Heckman model and OLS estimation, the results also show that contract farming increased the average income of smallholder farmers by TAS. 108 815 per annum per household and is significant at (p<0.05). Results further show that cost of transport and production costs had a negative effect on income from paprika farming and is significant at (p<0.05). These results clearly show that contract farming has the potential of raising smallholder farmers’ income. The study however recommends provision of inputs subsidy, provision of extension services, creating a strong legal framework protecting both farmers and contracting firms as important issues in order for smallholder farmers to participate and benefit from contract farming. The study also recommends to the government and NGOs to support formation of stronger farmers’ organizations in order to improve their bargaining power. en_US
dc.description.sponsorship Mr. Victor El- Nshau the Director of ADP Mbozi en_US
dc.language.iso en en_US
dc.publisher Sokoine University of Agriculture en_US
dc.subject Farming income en_US
dc.subject Smallholder farmers en_US
dc.subject Mbozi district en_US
dc.subject Tanzania en_US
dc.subject Contract farming en_US
dc.title Economic impact of contract farming on income of smallholder farmers: case study of Paprika contract farming in Mbozi district,Tanzania en_US
dc.type Thesis en_US

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