Costs and their financial implication for smallholder tree growers in Mufindi district Tanzania
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Date
2021
Authors
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Journal ISSN
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Publisher
Sokoine University of Agriculture
Abstract
This study sought to bridge the gap in knowledge by determining costs and their financial
implication for smallholder tree growers in Mufindi District, Tanzania. The specific
objectives of the study were to determine cost centers for establishment and management,
to compare these costs of establishment and management for tree growers and lastly to
determine the financial viability of the tree growing systems in the district. Data were
collected by using a questionnaire with independent tree growers as respondents,
checklists for TGA members as well as service providers and outgrowers. The study used
homogenous purposive sampling to identify smallholder tree growers that where located
within Mufindi District with woodlot size between 0.4 hectares to 4 hectares. The data
were analyzed using the SPSS program version 12.11 and the EXCEL program. The
comparison on the cost of establishment and management for the different tree growing
systems in the district was made using ONE WAY ANOVA and Fischer’s LSD. The
discounted cash flow analysis with economic criterion NPV, and IRR were employed for
economically evaluating the forestry projects. The study found that independent
smallholder tree growers had the lowest costs of establishment and management at 2 679
012.35 TZS per Ha compared to TGAs TZS 2 281 440.00 per Ha, service providers TZS
3 374 554.51 per Ha and outgrowers 4 104 299.52 per Ha. The study concluded that
though costs are crucial, the ability to find a suitable market beforehand affects the overall
viability for investing into smallholder tree growing in Mufindi district. The study
recommends that governance such as FBD, be tasked with addressing these transaction
costs and aligning contracting relationships between smallholder tree growers and their
commercial partners. Furthermore, to increase the bargaining power of smallholder tree
growers, encouragement for independent tree growers to join these tree grower
associations must continue.
Description
Dissertation
Keywords
Financial implication, Smallholder tree growers, Mufindi-Tanzania, Tree growing systems, Service providers and out growers