Assessment of the role of institutions and transaction cost in sorghum supply chain in Singida rural district
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Date
2009
Authors
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Publisher
Sokoine University of Agriculture
Abstract
The study assess the role of institutions and transaction cost in sorghum supply chain in
Singida Rural District. Data were collected from secondary and primary sources. A sample
of 60 sorghum farmers, 9 traders, 9 institutions supporting sorghum production and
marketing was interviewed. The data obtained were used to describe the structural and
social-economic factors that influenced farmers in production and marketing along the
supply chain, examine type and role of institutions supporting sorghum production and
marketing and transaction cost incurred by actors along the chain. Data was analyzed by
descriptive statistics, marketing margin and correlation analysis. Marketing margin and
correlation analysis were estimated as indicators of market efficiency. Three sorghum
marketing channels were identified (i) farmer’s selling direct to local consumers
(ii) farmer’s selling to village trader’s who in turn sell to local consumer and (iii) farmer’s
selling through village traders, urban trader’s, urban wholesaler’s and retailer’s to urban
consumers. The study revealed that, the flow of sorghum from producers to consumers
leads to long supply chain which leads to high transaction cost. High market margin was
realized at wholesale level compared to the other chain actors. There was a negative
correlation between buying prices and market margin which results to unstable market.
This reflects less income to sorghum producers and more benefit to other chain actors.
Major constraints to sorghum production and marketing were unreliable market, low
producer prices, pests including birds like quelea quelea and limited access to market
information. The study recommends that, market information should be improved by
promoting telecommunications infrastructure in the area. Institutional supporting sorghum
should link sorghum farmers to marketers for the effective supply chain. Policy makers
and other stakeholders should find a way of introducing threshing, dehulling and sorghum
milling machine in the area which will encourage sorghum production and marketing.
Description
Keywords
Transaction cost, Sorghum supply chain, Singida Rural District, Institutions
Citation
Mosha N.P(2009).Assessment of the role of institutions and transaction cost in sorghum supply chain in Singida rural district . Morogoro;Mokoine university of agriculture