Structure and performance of the bean marketing system in tanzania: A case study of Kigoma region
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Date
2010
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Publisher
Sokoine University of Agriculture.
Abstract
This study attempts to evaluate the structure and performance of the bean marketing
system (BMS) in Tanzania with particular emphasis on Kigoma Urban, Kigoma Rural and Kasulu districts in Kigoma region. Specifically the study aims at: describing the present bean marketing channels (BMC) and the structure of trader networks; evaluating the efficiency of the BMS; and examining the overall performance of the BMS.
A simple random selection technique was employed for selecting farmer, trader and consumer samples. Ten farming households were randomly selected from eight villages (based in Kigoma Rural and Kasulu districts) making a sample size of 80 farmers. On the other hand, thirty and twenty traders were randomly selected from markets located in Kigoma Urban and Kasulu districts respectively. Also, thirty bean consuming households were randomly selected from Mwanga Kaskazini and Kasulu mjini wards in Kigoma Urban and Kasulu districts respectively.
Descriptive and quantitative assessments were employed in this study based on objectives and hypotheses to be tested. For descriptive analysis, the use of means, percentages, ranges and other statistics were employed to describe the characteristics and trends of the bean marketing system. Quantitative analysis involved the use of Gross margin, Marketing Margin, market concentration index (CI) and correlation analyses.
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Results show that in the study area there are seven BMC for beans namely: (i) producer-consumer, (ii) producer-retailer (village/inter-village collectors)-consumer, (iii) producer-wholesaler (regional)-retailer-consumer, (iv) producer-wholesaler (regional)-wholesaler (regional)-retailer-consumer, (v) producer-wholesaler (regional)-wholesaler (regional)-consumer, (vi) producer-wholesaler (regional)- wholesaler (inter-regional)-retailer-consumer, and (vii) producer-wholesaler (regional)-wholesaler (inter-regional)-consumer. Also the study found that the BMS is competitive as there are many bean traders to prevent any monopolistic tendencies. This is indicated by weak levels of CL The CI for retailers were 38.8 and 46.8% for Kigoma Urban and Kasulu respectively. Results for the wholesalers indicated
unconcentrated (CI 27.6%) and existence of weak monopolistic situation (CI 35.6%) for Kigoma Urban and Kasulu respectively.
Apart from being competitive the BMS was found to be inefficient in terms of market transparency and barriers to entry (structure). Market transparency is obscured by lack of proper information transmission among the market participants. There are no uniform measurements, weights or standards such that direct price comparisons are very difficult. Lack of enough capital and high market fees were found to be major barriers to business expansion because they do not really prevent people from entering into the business as it is indicated by low CI. Furthermore, the study found that there is no form of collusion among traders in determining buying and selling
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prices. As a result each trader buys bean supplies at varied prices and marketing costs, a fact that has caused considerable variations in the retail prices.
Generally, it can be concluded that the BMS is performing poorly as it is suggested by a low ratio of gross margin earned per Kg to the per unit cost which was approximately 1:9.4. Lack of transparency, high transport costs and market fees (structure) and lack of appreciable cooperation among traders (conduct) further aggravate poor performance.
Based on the findings of this study the following are recommended for better performance of the BMS: (i) the road network in the region should be improved, (ii) traders should be encouraged to form groups, (iii) the measuring devices should be standardized and the quality of beans traded should be monitored closely, and (iv) market fees should be revisited to make them affordable to traders.
Description
Dessertation
Keywords
Structure, Performance, Bean Marketing System, Tanzania, Kigoma region