Contribution of Non-Tariff Barriers on Market transaction costs for maize production and Trade in Tanzania
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Date
2015
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Publisher
International Review of Research in Emerging Markets and the Global Economy (IRREM)
Abstract
In developing countries like Tanzania, agricultural commodities such as maize are often
traded in an environment characterized by poor transport and communication infrastructure,
giving rise to high market transaction costs. Similarly, in Tanzania, maize trade is associated
with high market transaction costs of which Non- Tariff Barriers (NTBs) such as road blocks,
custom procedures and weighing bridges are encompassed. This paper assessed the
contribution of NTBs on the maize market transaction costs in Tanzania based on the study
conducted in the major maize producing districts (Mbozi and Momba districts) in the
Southern Highland of Tanzania. A two stage stratified sampling techniques were used in
selection of sample size. Primary data were collected by interviewing 50 maize traders and
240 producers using standardized questionnaires. Data were analyzed using SPSS and
descriptive statistics were used to summarize findings in simple descriptive figures like
frequency, histograms and tables. Findings show that NTBs cost contributes up to about 43%
of marketing costs in both districts. However, transport costs constitute the large percent
(57%) of the marketing transaction costs among traders and producers. The study concludes
that, NTBs have significant contribution and effect on the marketing of maize in the two
districts. We recommend that the government should formulate policies that discourage the
use and implementation of destructive NTBs and concentrate on those encourages producers
and traders to participate in production and trading of maize like farm inputs subsidization
and improvement of market infrastructures.
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Keywords
Maize production, NTBs, Maize marketing, Tanzania, Contribution