Economic analysis of medium scale agricultural enterprises in a predominantly smallholder agriculture sector.
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Date
2001
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
Sokoine University of Agriculture
Abstract
Sub Saharan African countries
poverty. Most of these countries, including Tanzania, depend heavily on agriculture
for their economic development and meet their food requirements from domestic
production, imports and food aid. Increasing agriculture production is thus a high-
priority topic in Sub Saharan Africa, including Tanzania. This study is motivated by
governmental organisations, to support smallholder farmers to achieve the expected
targets and hence the need to seek for a more responsive alternative target for support
that will lead to the achievement of the desired improved production in the Tanzanian
agriculture sector. The study tests the hypothesis that there is an unexploited potential
for modernizing the Tanzanian agriculture sector through promotion of medium scale
farming. To test this hypothesis the study investigates the profitability of medium scale
agricultural enterprises in Tanzania using 233 dairy and sugarcane farms located in
Morogoro as a case study. In this study profitability was measured by Economic Farm
Surplus (EFS) and Gross Margin Analysis (GMA) for the dairy and sugarcane/paddy
farms respectively. Literature on previous studies in this area focused on small-scale
enterprises and has highlighted the importance of the size of the agricultural enterprise
the trend of profitability of agro-based enterprises with increasing farm size. In order
to capture the effect of the changing farm size on profitability, the selected dairy and
sugarcane/paddy enterprises were grouped into seven and nine categories for dairy and
sugarcane respectively. Prior to the estimation of multiple regression models for the
two types of enterprises i.e. dairy and sugarcane, a simple comparison of mean EFS
ABSTRACT
are faced with lagging food production and pervasive
on productivity of agro-based enterprises. Thus the present study aimed at observing
the failure of the efforts, by the Tanzanian government and international and non-and GM analyses for the different size categories was conducted deploying the analysis
of variance (ANOVA) technique. The ANOVA indicated the existence of significant
differences in the levels of the EFS and GM for the different farm size categories.
Three multiple regression models were estimated to establish the relationship between
size and profitability. The results revealed that the productivity of an enterprise was
positively influenced by the size, access to credit facilities, access to extension services
and farmer’s level of education. The results from this study suggest that Tanzanian
medium scale agro-based enterprises have a very high potential for growth if supplied
enterprises in the country' drastic policy changes that will make sure that the needs of
medium scale farmers take a central part in the agriculture policy are required.
with a favourable environment. In order to stimulate the growth of medium scale
Description
thesis
Keywords
Economic analysis, Medium scale agricultural enterprises, Predominantly smallholder agriculture sector, Smallholder farmers