Economic analysis of outgrowers’ sugarcane production scheme at Ruembe Sugarcane Basin in Kilosa District, Morogoro
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Date
2008
Authors
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Publisher
Sokoine University of Agriculture
Abstract
The study was conducted al Ruembe Sugarcane Basin in Kilosa district in Morogoro
region in 2007/08 to analyse economic factors influencing out growers sugarcane
production scheme. A Cobb-Douglas production function was used to determine the
technical relationship between sugarcane productivity and the inputs (land, labour,
fertilizer, herbicide, credit and extension services). Ordinary Least Squares regression
technique was used to perform the analysis. Coefficients of the inputs were estimated
from the Cobb-Douglas production function. Gross margins of the sugarcane and paddy
enterprises were calculated to determine profitability. The results indicate that fertilizer,
labour and credit are statistically significant factors of production for sugarcane at P<0.05
where as land, herbicide and extension services are not statistically significant at P<0.05.
The estimated coefficients for the input factors were 0.52878, 0.34376, 0.22464, 0.13025,
0.00160 and -0.01758 for fertilizer, labour, herbicide, credit, land and extension services,
respectively. The positive coefficients indicate increased sugarcane productivity where as
the negative coefficient for extension service means decreased productivity. The Gross
margin analysis showed that sugarcane enterprise has higher returns of 561 498.48
Tshs/ha followed by paddy enterprise which has returns of 73 929.64 Tshs/ha. The mean
annual contribution of Ruembe sugarcane out growers to the Kilombero II Sugar factory
is 220.277 tonnes of cane/capita. The mean sugarcane price was 35 360.42 Tshs/tonne at
mean sucrose content of 9.11%/tonne of rendement. The mean annual per capita sugar
consumption of Ruembe outgrowers’ is 12 kg due to high sugar price which limits
consumers to use more sugar. This implies that sugar consumption is still a constraint to
consumers due to inflation of sugar price caused by inadequate of sugar supply in the
market leading to importation of sugar from abroad which distort the domestic market
price.
Description
Dissertation
Keywords
Economic analysis, Outgrowers’, Sugarcane production scheme, Ruembe Sugarcane Basin, Kilosa District, Morogoro