Assessment of the impact of contract farming on farm productivity and returns: a case study of tobacco in Uyui district
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Date
2008
Authors
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Journal ISSN
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Publisher
Sokoine University of Agriculture
Abstract
This study assesses the impact of contract farming on farm productivity and returns in
tobacco farming. The study was conducted in Uyui district, Tabora region Tanzania.
Specifically, the study investigates the profitability of tobacco production under contract
farming arrangement vis-à-vis tobacco production before the arrangement, analyzes
problems affecting tobacco productivity among smallholder farmers and determines
farmers’ perception about contract farming. A cross sectional survey was conducted on
randomly selected 180 tobacco farmers from 18 villages. A pre-tested questionnaire was
used to capture both qualitative and quantitative data on smallholder tobacco production
and marketing under contract farming arrangement. The data obtained were used to
describe structural and socio-economic factors that influence tobacco production. Gross
margin analysis results reveal that tobacco production under contract farming is more
profitable than before the arrangement. Regression analysis results showed a significant
positive relationship between the independent variables considered to influence
productivity. Variables included in the equation were farmer’s education level; farmer’s
experience in tobacco farming, number of visits by the extension agents, amount of
fertilizer per hectare and hired labour per hectare. The hired labour variable showed a
positive relationship with yield but
not significant. The study also reveals that the
majority ( 78%) of the respondents do not favour contract terms and conditions, therefore,
perceive contract farming as disadvantageous. To improve tobacco productivity and
farmers’ income, the study suggests that, growers should initiate arrangement that would
ensure self-reliance on production
inputs particularly fertilizer. The study also
recommends for the provision of quality and appropriate extension services, growers to
look into the possibility of acquiring some shares in tobacco processing factories, the need
for the government to consider increasing the subsidy on transportation and fertilizer
costs; and the need for stakehoders to increase efforts on raising farmers’ awareness on
the free market economy.
Description
Keywords
Farm productivity, Tobacco, Uyui district
Citation
Rugimbana,F.M(2008)Assessment Of The Impact Of Contract Farming On Farm Productivity And Returns: A Case Study Of Tobacco In Uyui District .Morogoro;Sokoine University of Agriculture.