Potential for using the warehouse receipt system in financing maize marketing in Tanzania under market liberalization: case study of Mbozi and Babati districts
Loading...
Date
2005
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
Sokoine University of Agriculture
Abstract
The general objective of the study was to assess the potential effect of using Public
Grain Warehouse Receipt System (WHRS) in financing maize production and
marketing under a liberalized market economy in Tanzania. Similar experiences in
the cotton and coffee subsectors were used to assess this potential.
Multistage and simple random sampling techniques were employed in selecting
farmers, while systematic and simple random sampling techniques were used to
select traders. Descriptive and quantitative techniques were employed to analyse
collected data.
The study found that smallholder maize, cotton and coffee farmers have household
characteristics common to most rural household settings elsewhere in Tanzania. Only
5% of maize farmers had access to credit. In places where there is proper functioning
of WHRS credit facilities (coffee and Cotton); relatively more farmers are able to
access funds for input financing. The calculated buyers concentration ratio was 60.54
that suggest that the maize trading in the study area has a tendency towards
monopolistic marketing behaviour. The results of regression analysis for coffee and
cotton, reveals that the coefficients for age, education, household size, loan amount
received, interest rates, and membership to the primary cooperative society were
determinant variables to borrowers transaction costs. For loan demand, coefficient
for age, household size, transaction costs, interest rates, distance to the lending
institution, the disbursement and previous season crop harvest were important
variables. The results of gross margin analysis revealed that, coffee had highest gross
margin and returns to labour followed by cotton and maize.
Basing on the results of this study it is suggested that Public Grain Warehouse
Receipt System should be adopted because apart from credit facilities provision, it
will assist traders to pool (financial) resources, and form networks for consolidating
maize marketing. Also it will assist farmers to organise themselves for the purpose of
bulking and marketing maize together, it will enforce quality standards, facilitate
provision of timely and adequate market information, and facilitate linkage between
large agricultural companies, millers, traders and small maize producers.
Description
Thesis
Keywords
Warehouse receipt system, Maize marketing, Tanzania, Mbozi, Babati