Abstract:
The objectives of this study were to (i) determine the social networks of the main actors in
the organic food value chain in the tourism sector (ii) determine governance in the value
chain of organic tomatoes and sweet peppers for the tourism sector in Arusha and Unguja
and (iii) to evaluate production and transaction costs of actors in the organic tomatoes and
sweet peppers value chain in Arusha and Unguja. The study was conducted in Arusha and
Unguja. A preliminary survey was conducted in 2014. Then a stratified sampling
procedure was used to select a sample of producers, tourist hoteliers and traders/suppliers.
Key informants interviews and snowballing sampling procedures were also used. The
results indicated that producers were close to other actors by closeness centrality of 2.12
in Arusha and 3.12 in Unguja. Suppliers/traders were central in the marketing of tomatoes
and sweet peppers by betweenness centrality of 91 in Arusha while in Unguja producers‟
organization was central by betweenness of 533. Producers‟ organizations had many
actors connected to them by a degree of 17 in Arusha and 28 in Unguja. The density of
networks was low 0.01 due to fewer supporting institutions and lack of organic input
suppliers. About four forms of governance structures were prominent in organic tomato
and pepper value chain: market, modular, rational and captive. The probit results from the
Heckman‟s two-stage process show that ownership of assets such as storage facilities,
transportation assets and being under contract farming increased the probability of market
participation, while experience in marketing increased the quantities of tomatoes and
sweet peppers marketed. High marketing costs such as market levy, brokers and mobile
phones costs decreased the quantities of tomatoes and sweet peppers marketed.
Institutional arrangements (contract farming) were the possible solutions to reduce
transaction costs effect, improve access to the tourist hotels market, increasing shelf life
by having collective storage facilities and transport. Producers‟ cooperatives and companies enabled the promotion and production of organic tomatoes and peppers. The
choice of captive and modular governance structure by lead actors ensured access to
organic input and market.
