Msese, L. R. & Mashenene, R. G. (2020). Rural-Urban Dynamics: Irish potato production investment opportunities and emerging market in , Tanzania.

East African Journal of Social and Applied Sciences (EAJ-SAS) Vol.2, No.1 Publication Date: April. 20, 2020 ISSN: (Online) 2714-2051, (Print) 0856-9681 The current issue and full text archive of this journal is available at: http//www.mocu.ac.tz

Cite this article as: Msese, L. R. & Mashenene, R. G. (2020). Rural-Urban Dynamics: Irish potato production investment opportunities and emerging market in Njombe, Tanzania, East African Journal of Social and Applied Sciences, 2(1), 59-67.

RURAL-URBAN DYNAMICS: IRISH POTATO PRODUCTION INVESTMENT OPPORTUNITIES AND EMERGING MARKETS IN NJOMBE, TANZANIA

Lukelo Roden Msese School of Business Studies and Economics, The University of Dodoma -Tanzania Corresponding author: [email protected]

Robert Galan Mashenene Department of Marketing, College of Business Education, Dodoma-Tanzania

ABSTRACT The trend and patterns of rural-urban mobility are complex and its drivers (economic and social opportunities) are varying widely. The urbanization process causes; changing in population, changing in demand of food crop and also changing in food preferences. Moreover, these changes are translated into rural areas by improving agricultural transformation in terms of changing the land size, increasing the use of agricultural inputs and increasing productivity but also changes in main economic activities. This paper examines the economic opportunities and emerging market channels for the agricultural product (Irish potato) and investment opportunities in rural areas. The analysis was based on survey data collected from , Tanzania. Statistics encompassing measures of association, mean differences and multiple linear regression model were used. Results confirm the hypothesis that migration and mobility make the investors differ significantly (p<0.01) in terms of investment in the rural areas. Moreover, increasing connectivity through mobility and commuting of the rural to urban residence allows investors to take advantages of the emerging market for both rural and urban areas. Furthermore, a significant number of investment opportunities resulted from the emerging of a new channel of Irish potato marketing. Integrating rural-urban connection in development approaches will ensure utilization of investment opportunities; increases agricultural productivity hence increases job opportunities to the community.

Keywords: Rural-Urban linkages, Emerging market, Investment opportunities, migration/mobility, Irish Potato Paper type: Research paper Type of Review: Peer Review

1. INTRODUCTION There is rapid population growth in the urban areas, resulting in urbanization in the country. The 2012 population census reported a population of 44.9 million people an increase from 34.4 million during the 2002 population census (URT, 2013). The 2002 census indicated that 23.1% of the population was urban an increase from 6.4% during the 1967 population census (URT, 2006). The increase of urban population resulted from rural population growth and migration which was caused by investment opportunities and services offered in urban areas. The population of increased from 419,155 in 2002 population census to 471,613 (Njombe Town Council 130,223, Njombe District Council 85,747, Town Council 93,827 and Wanging’ombe district council 161,816) population in 2012 population census (URT, 2013).

The urbanization process causes the following; changing in population, changing in demand of food crop and also changing in the lifestyle of the people (Anderson, 2008). It occurs also at rural areas by creating agricultural

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Msese, L. R. & Mashenene, R. G. (2020). Rural-Urban Dynamics: Irish potato production investment opportunities and emerging market in Njombe, Tanzania. transformation in terms of changing the land size, increasing the use of agricultural inputs (like fertilizers and pesticide) and also increasing productivity (Hazell and Wood, 2008). These changes are driven by the household shifting from low value crop to high valued crop production. There is an expectation that household will shift from traditional, more land-extensive enterprise to more high value and land-intensive enterprises (Salami et al., 2010). But also urbanization results in increasing rural-urban connections which affects the available labour for agricultural production and household income in rural areas.

Urbanization provides opportunities for higher value agricultural enterprises to take advantage of a nearby urban market (Satterthwaite et al., 2010: Larson et al., 2001). As a result, the household will increase household income by taking advantage of new economic opportunities and investment into an emerging market in both rural and urban areas. According to World Bank (2017), urbanization results into increased population which consequently leads into increased productivity about 4 times in developed countries. It is from urbanization investment opportunities and economic activities grow in urban areas (Urban Land Institute (ULI), 2018). Accodingly, Asian Development Bank (ADB) (2019) and World Bank (2019) indicated that urbanization is a focal point for economic activities and engines for economic growth in which they create opportunities for entrepreneurship, jobs, employment and livelihood.

One of the consequences of the urbanization on the rural areas has been the influence of changes in demand and supply of goods and services in urban areas. Such changes can be caused by changes in food tastes and preferences, the lifestyle of the people including culture, employment and living environment which bring changes to the rural economy. The rural household is shifting to the production of the high valued crop which increases household income. Despite the fact that rural-urban dynamics seem to pose positive effects to the livelihood of people in both urban and rural ares, but investment opportunities emerging from this dynamism have not been scholarly identitied. In this regard, the overall objective of the paper was to investigate investment opportunities in the emerging market resulted from rural-urban dynamics in Njombe, Tanzania.

2. LITERATURE REVIEW According to classical economics, the rural inhabitant is pulled into urban areas by high industrial wages. Rural- Urban dynamics represent a powerful strategy for enhancing incomes, increasing productivity, alleviating poverty and promoting employment in the rural and urban areas (Oluwasola et al., 2008). There is a symbiotic relationship between rural and urban areas which are beneficial to both sides, is expected to provide the necessary impetus for improving the economic prospects of the rural areas. From theories of economic development by Lewis and Kuznets, people shift out of agriculture to more remunerative activities off-farm and outside the rural areas, a positive virtuous economic dynamic is set in motion with new opportunities. There is positive spill-over of urban centres on the rural hinterland, through consumption linkages, urban-rural remittances, upward pressure on agricultural wages and generation of rural non-farm employment (Cali and Menon, 2012). On the other hand results in the opening up of investments in the rural areas to meet the new opening market in both rural and urban areas.

Migration and remittances reduce rural poverty and contribute to the improvement of living standards. Migrant households with remittance tend to spend more than a nonmigrant household on durable goods and productive activities (Adams 2006; Taylor and Mora 2006; Airola 2007). It is anticipated that migration/mobility increases rural household income and enable rural households to make agricultural improvement through improved access to capital and enhanced agricultural investment (Taylor et al., 2003; de Haas 2006; Hall 2007). New forms of agriculture stimulate rural dynamics in the sense that new investment opportunities open up new forms of agricultural production or agricultural related activities like processing, servicing and trading. In the other hand increases the job opportunities in the rural areas.

3. RESEARCH METHODOLOGY 3.1 Research design A cross-sectional research design was used since it allows collecting data at one point. This research design is popular in some cases the researcher is constrained with time, financial and physical resources (Mashenene, 2016). East African Journal of Social and Applied Sciences [EAJ-SAS] Vol. 2, Issue 1, 2020 60

Msese, L. R. & Mashenene, R. G. (2020). Rural-Urban Dynamics: Irish potato production investment opportunities and emerging market in Njombe, Tanzania.

3.2 The study area The study was conducted at Njombe region. The Region has an area of 24 994 square km out of which 21 172 square km is land (84.7%) and 3 822 square km (15.3%) is covered by water (URT, 2013). Njombe Region borders Region in the North, Morogoro Region in the East and Ruvuma Region in the South. In the north-west and west Njombe Region borders Republic of Malawi and region respectively. Njombe Region lies between latitudes 08040’ and 10032’ south of the equator and between longitudes 33047’ and 35045’ east of the Greenwich. Administratively the region is comprised of four districts namely, Njombe District, , District, and Wanging'ombe District. Njombe District comprises of three councils namely; Njombe Town Council, Njombe District Council, and Makambako Town Council.

Selection for study areas based on interrelationship that exists between rural and urban areas due to Irish potato production. Moreover, the main focus was in the particular process of agricultural transformation caused by the land use changes resulted from rural-urban linkages. This process resulted in the introduction of the new agricultural crop/change in cultivation practices and also results in a change in land use. The study area is a characterization of the booming of the Irish potato production as the cash crop as the advantage of rural-urban linkages. The Ulembwe ward and Iwungilo ward were selected for the household survey. Ulembwe ward was selected by being relatively close to the urban area (Njombe town) about 16 km and 21 km for Ulembwe and Igagala village respectively, while Iwungilo ward was relative far and in the remote area about 34 km and 60 km from Njombe town for Iwungilo and Ngalanga village respectively.

3.4 Sample size determination The sample size indicated was calculated based on the sample size (n) calculation formula and taking into account the main three factors 1. Estimated preference of variable of interest (Irish potato farmers) (p); 2. The desired level of confidence interval (z); 3. Acceptable margin of error (c). An appropriate sample size for household survey determined based on precision rate and desired confidence level as presented by Kothari (2004), and is algebraically presented as: z 2 Np(1 p) n  (N 1)e2  z 2 p(1 p) , p Where n, N, e, Z and are sample size, population size, acceptable error, the inverse of the standard normal cumulative distribution that corresponds to the level of confidence (always found from statistical tables) and the proportion of household cultivating Irish potato respectively. The actual values used in this equation were N=2906 Z= 1.96, e=5% and p=80%, which gave the sample size (n) of 227 households. Due to the method used for data collection, analysis and characteristics of the study area a total of 170 household were used.

3.5 Sampling and data collection methods For household surveys, four (4) villages from the villages which produce Irish potato at Njombe and Wanging’ombe District were selected. The villages were selected randomly from the two wards selected for the study. List of households and Irish potato investors in each village were generated with help of Village Executive Officer (VEO) and sub-villages leaders. Sampling frame contains all households in the list generated from four villages selected. Simple random sampling was used to select the respondents from each village. The random number generation in excel was used to select the required household for an interview at random. The household survey uses 150 households at Ulembwe and Iwungilo wards after data collection coded and cleaned. Nevertheless, 50 Irish potato investor in Ulembwe and Iwungilo wards were interviewed to supplement information for investments on potato production.

A structured questionnaire was used to collect data from household and Irish potato investors. Before the actual survey, pre-testing of the questionnaire was done to check its relevance and comprehensiveness. Primary data include household characteristics, migration and mobility, agriculture and livestock, financial and physical assets, expenditure and savings.

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Msese, L. R. & Mashenene, R. G. (2020). Rural-Urban Dynamics: Irish potato production investment opportunities and emerging market in Njombe, Tanzania.

3.6 Data analysis methods Rural-urban dynamics are important for rural area to boost agricultural investment, hence improve rural household income. Descriptive statistic such as mean, frequencies, minimum, maximum and standard deviations used to understand the characteristics of the household, and contribution of rural-urban linkages on the household income. The statistical comparison is done by t-test for continuous variables (Income, Age, Household size, Land size). The following econometric model used to determine the contribution of a rural-urban link on rural household income. Y   X   i 0 i Where, β0 is the intercept parameter, α is the vector of slope parameters, Yi is the total household income, total income of the household was obtained by summing the income from the following income sources (Agriculture income, Wage income, Livestock income, Self-employment income, Salary income, Remittance income, Pension income and Other income sources) collected through the questionnaire. Xi is the matrix of predictor variables such as Link to an urban area (Dummy), Household size (Adult equivalent), Sex (dummy variable), distance to nearest urban market (Km), area cultivated (acre), Production asset index, Durable asset index, access to agricultural inputs index.  is the random component taking up other variables not specified in the empirical model (   N(0,1) ).

4. RESULTS AND DISCUSSION 4.1 Household characteristics Majority of the household head has a primary education level for both household (Table 1). Furthermore, the highest education level within the household varies slightly. Percentage of household with ordinary secondary education is relative high for a household with migration/mobility compared to the household without migration/mobility. Surveyed data indicates that 66.8% and 33.2% are male and female-headed household respectively for a household without migration/mobility. Similarly, 72.9% and 27.1% of household head are male and female respectively for a household with migration/mobility. These implied that the majority of the households in the surveyed area are male-headed households which are dominating in most of the household decision in the day to day life and household income.

Table 1: Categorical variables for household head/household characteristics Characteristics Household with migration/mobility No (n=87) Yes (n=63) Age group of household head: 18 – 35 years 36.0 28.5 36 – 65 years 58.1 63.3 Above 65 years 5.9 8.2 Sex household head: Male 66.8 72.9 Female 33.2 27.7 Highest level of education for household head: Non-formal education 23.2 20.8 Primary school 70.6 68.6 Ordinary Secondary school 4.5 9.7 Advanced secondary school 0.7 0.5 Certificate/Diploma/Degree 1.0 0.5 Highest level of education within the household: Non-formal education 8.7 0.5 Primary school 67.8 50.2 Ordinary Secondary school 16.3 37.2 Advanced secondary school 1.7 6.3 Certificate/Diploma/Degree 5.5 5.8

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Msese, L. R. & Mashenene, R. G. (2020). Rural-Urban Dynamics: Irish potato production investment opportunities and emerging market in Njombe, Tanzania.

4.2 Migration and mobility Mobility across the country has moved on through different phases in relation to changing the socio-economic environment in the country. Labour migration to sisal plantations on the coast, maize and tobacco farms in Iringa and tea estates in Mufindi, was common before the 1970s (Mung’ong’o 1998). Migration of worker from Iringa Region and Ruvuma Region to work for plantation and estates were common. The diversity of mobility pattern away from the traditional division and patterns are increasing, but also involves new actors and new and multiple destinations. This mobility is for different economic and social activities. 50 43.8 45 40.5 40 35 30 24.9 25 22.7 23.5 22.5

20 Mobility % of % household 15 Migration 10 Mobility/migration 5 0 Iwungilo ward (n=24) Ulembwe Ward (n=39

Figure 1: Migration and Mobility

In recent year, the frequency of mobility between rural villages to Njombe town is increasing. Mobility facilitated through the improvement of the road network between the villages and Njombe town. For example, Ngalanga village and Iwungilo village they have a bus which is making the connection to Njombe town on a daily basis. Furthermore, the use of motorbike (Bodaboda) makes the connection to Njombe town becoming easier. On the other hand, the Igagala village and Ulembwe village are connected to Njombe town with the main road to Makete district. It provides a connection to Njombe with buses as well as a small private car (Taxi) which is operating between these two villages regularly.

Figure 2: Map of Njombe indicating the location for mobility in the study village

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Msese, L. R. & Mashenene, R. G. (2020). Rural-Urban Dynamics: Irish potato production investment opportunities and emerging market in Njombe, Tanzania.

Regularly, commuting of the through rural household member with the Njombe town is increasing the household income generating activities. Agricultural commodities are sold to Njombe town. Motorbikes and bicycles are used to sending agricultural commodities (Vegetable, Maize, Irish potato) to the urban market.

Table 2: Purpose and location for economic migration of household member Iwungilo ward Ulembwe ward All Main purpose of migration Rural Urban Rural Urban Rural Urban (n=6) (n=54) (n=28) (n=85) (n=34) (n=139) Casual labour/Employment 33.3 61.1 57.1 49.4 52.9 54.0 Business (sell and buy commodity) 0.0 29.6 21.4 45.9 17.6 39.6 Farming activities 66.7 9.3 21.4 4.7 29.4 6.5 Total 100.0 100.0 100.0 100.0 100.0 100.0 Table 3: Purpose and location for the economic mobility of household member Iwungilo ward Ulembwe ward All Main purpose of mobility Rural Urban Rural Urban Rural Urban (n=8) (n=40) (n=29) (n=55) (n=37) (n=95) Casual labour/Employment 12.5 0.0 37.9 1.8 32.4 1.1 Business (sell and buy commodity) 50.0 80.0 34.5 74.5 37.8 76.8 Farming activities 37.5 20.0 27.6 23.6 29.7 22.1 Total 100.0 100.0 100.0 100.0 100.0 100.0

4.3 Mean income differences for rural households In considering the importance of the rural-urban linkages, investors in Irish potato production are taking opportunities to increase household income. Moreover, there is a significance difference in the ownership and use of agricultural inputs into the farm plots. Results of t-test show that mean value of the index of production assets, Index of durable assets, adult equivalent, total household expenditure and total household income are significant relative high for investors with a rural-urban link (Table 4). Table 4: Test for mean differences of continuous variables (n=50) Levene's Test for Equality of Variances t-test for Equality of Means Variables Sig. (2-Mean Std. Error F Sig. t df tailed) Difference Difference Index for production assets 0.64 .424 -2.53 48 .012 -0.03 0.01 Index for durable assets 2.86 .091 -4.23 48 .000 -0.06 0.01 Adult equivalent 26.44 .000 -11.75 48 .000 -1.68 0.14 Expenditure (Tsh/month) 13.27 .000 -4.33 48 .000 -913647.21 210797.51 Income (Tsh/month) 14.51 .000 -3.74 48 .000 -1255945.66 335335.03

Regression analysis is performed to find out the factors influencing the total income of the household. The dependent variable is the natural logarithm of total household income; it is assumed the different factors are influencing the total household income which is presented as dependent variables are presented in Table 5. Results show that household with the urban link has relative more income than a household without an urban link. Nonetheless, one percent increase in the average land cultivated household would yield a 0.737% increase in the average household income.

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Msese, L. R. & Mashenene, R. G. (2020). Rural-Urban Dynamics: Irish potato production investment opportunities and emerging market in Njombe, Tanzania.

Table 5: Regression output for factors influencing household income (Log income) Variables Coefficient Std. error

Urban link (1=Yes, 0 else) 0.348 0.340 Adult Equivalent 0.0149 0.0406 Agricutural activities -0.471*** 0.160 Non-farm activities 1.137*** 0.224 Land Cultivated (log Acres) 0.737*** 0.0881 Index_Asset 0.170 0.283 Index_Durable 1.140*** 0.248 Index_Input 0.180** 0.0750 Distance (log Km) -0.639*** 0.0960 Sex (1= Male, 0=Female) 0.210 0.0895 Constant 10.77*** 0.334 Observations 150 R-squared 0.785 *** p<0.01, ** p<0.05, * p<0.1 A unit percentage increase of distance from the urban center decreases the average household income by 0.639%. This implies that as distance increases from the urban area there is a decrease in the economic activities from non- farming activities. Rural-urban links influence the non-farm activities for the household which are located closer to the urban centers.

4.4 Emerging marketing Population increase in the urban areas offers the potential market for the Irish potato, due to change of demand and preference. In the rural area, there is an increase of the use of the Irish potato beyond the traditional uses, such as boiling of the potato. The need for fast food like crisp and fried chips results in increased consumption of the Irish potato in rural and urban areas. The increased in the consumption of the Irish potato in the rural area are indicated by increasing number of chips make vendor in the rural village. In the other hand, the urban area increased the consumption of the Irish potato due to the change of demand in the food. Most of the population in the urban (city) area depends on the fast food where fried chips and crisp is one of them.

Figure 3: Startup year for chips vendor in the year 2014

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Msese, L. R. & Mashenene, R. G. (2020). Rural-Urban Dynamics: Irish potato production investment opportunities and emerging market in Njombe, Tanzania.

5. CONCLUSION AND RECOMMENDATIONS 5.1 Conclusion The role of migration/mobility in the economic activities in the household has increased due to the change of the destination, frequency and group of people who were involved in the migration and mobility. Commuting to Njombe town has increased in the recent year this was due to the accessibility of the village and availability of transport (Roads) services in the areas. The improved infrastructure (roads and telecommunications) has increased the rural-urban linkages and thereby enhanced the transformation process of agricultural activities in rural areas. Most of the farmers are increasing the production of Irish potato due to the increasing demand for Irish potato in the urban areas as well as in rural areas. The increased demand mainly was due to an increase of population in urban areas, whereas changing of consumption pattern in rural areas where most of the rural dwellers now are eating fried Irish potato (chips). Increased production of the Irish potato in the areas and accessibility to urban and rural market creates more economic activities in the areas hence the availability of activities diversification to the household member. But also it boosts in the changing of farming practices done by the household. The increase of the agricultural input use index increases the household income by an average of 18% per of total household income.

5.2 Recommendations The effect of the rural-urban linkages on the household income in the rural areas varies widely. In the study, the effect of the rural-urban linkages on the income was studied into different wealth group in the village. The economic importance of the rural-urban linkages in the rural area increased household income through the increasing the job opportunities, the market for the agricultural produce, investment in agriculture and transformation of agricultural activities. Improvement of rural-urban linkages is vital for the improvement of the rural economic activities which held the household to improve their economic wellbeing. The study recommends the integration of the rural-urban linkages in the development plans which are aiming at the poverty reduction through increasing the economic activities. Rural and urban residents rely on a combination of both rural and urban-based assets and income sources with access to it. These interactions are complex in terms of trade, employment and provision of service in the rural areas. The development plans to ensure the economic importance of the rural-urban connection need to take the complexity on board for the planning in the rural and urban development agenda.

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