Abstract:
Grape is one of the most important economic fruits crop grown in Dodoma Region -
Tanzania. However, grape production faces challenge of low yield of 5.6 t/ha compared to
the established yield potential of 25 t/ha under irrigation and 17.3 t/ha under rain-fed in
Tanzania. This low productivity was mainly due to rising cost of production, which is
coupled with low output prices and an unreliable market. The most cost effective way to
improve farm productivity is through efficient use of available scarce resources and
technology. This study was conducted to analyse farm level profitability, profit efficiency
and identify specific factors that account for variation in efficiency among farmers. The
study also analysed farmer`s factor demand response due to changes in input prices. Multistage,
stratification and random sampling techniques were used to select 176 farmers from
irrigation and 183 farmers from rain-fed production systems. A structured questionnaire
was used to collect data. Descriptive statistic, farm budgeting technique and a stochastic
profit frontier were used to analyse the data. The results revealed that irrigated farms were
more profitable compared to rain-fed farms. The findings show further that wine grape
farmers are not fully profit efficient, implying that an opportunity exists to increase profit
efficiency through better use of available resources. On average irrigated farms are more
efficient (69%) compared to their rain-fed counterparts (63%). A farmer`s experience,
group membership, access to extension and credit service are key factors that significantly
influence profit efficiency among farmers. In the short-run the coefficients for own price
of labour, manure and agrochemical are inelastic. Policy measures directed at providing
credit and extension service to enhance the farm`s profit efficiencies are recommended. In
addition, any support to facilitate formation of farmers` association is very important
because membership in such groups can benefit farmers through economies of scale,
thereby reducing each member’s production cost. Reducing the cost of labour and
agrochemical can significantly increase the farmers’ profit level. Moreover, agricultural
policies directed at developing irrigation schemes to enhance grape productivity in order
to improve farm income and profit is recommended.
