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Rice Marketing Performance and Poverty Reduction in Kyela District After Market Liberalization in 1995

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Rice Marketing Performance and Poverty Reduction in Kyela District After Market Liberalization in 1995 RICE (Oryza sativa) MARKETING PERFORMANCE AND POVERTY REDUCTION IN KYELA DISTRICT, TANZANIA BY JULIANA ANDAGILE MWAKASENDO A THESIS SUBMITTED IN FULFILMENT OF THE REQUIREMENTS FOR THE DEGREE OF DOCTOR OF PHILOSOPHY OF SOKOINE UNIVERSITY OF AGRICULTURE. MOROGORO, TANZANIA. 2015 ii ABSTRACT Although Kyela District has high potential for rice production, which is done by almost every household, poverty is high as evidenced by 66% of households in the district being poor. The specific objectives of the study were to: assess rice marketing channels and the role of different marketing participants; analyze rice market structures; determine the performance of the rice marketing sub-system; compare well-being levels of rice farmers, traders and miller-traders; and find the likelihood of respondent households being grouped into the highest income quintile. A cross-sectional study design was employed, and data were collected between March and July 2010 from 234 households, including 160 rice farmers, 44 rice traders and 30 rice miller-traders. Five well-established informal rice marketing channels in which six marketing groups were participating were observed. Different actors and free entrance of different buyers and sellers to the market were also observed. Moderate levels of the Gini coefficients (0.35 for traders and 0.34 for miller- traders) were obtained. The main sources of marketing information were traders (70.2%), neighbours (15.5%), friends (9.9%), and media (4.4%). Profit margin was higher among traders than among miller-traders and farmers. Market efficiency was highest (20.1%) for traders and lowest (1.6%) for farmers. More than four-fifths (83.8%) of the farmers, 4.5% of the traders and 59.9% of the miller-traders were below the poverty line. The households’ income Gini coefficients were 0.468 and 0.425 for poor miller-traders and farmers, respectively. The Pa measure of poverty for traders was 0.016, unlike that for miller-traders, which was 0.188 and that for farmers, which was 0.327. The Pa ratios mean that the traders were the richest of the three groups, since the smaller the Pa ratio the richer the people. In order to reduce poverty more effectively in Kyela District through improved rice marketing performance, it is recommended that road infrastructures should be improved to reduce transport costs for all actors in the rice marketing chain. Further, it is suggested that all problems facing the farmers, traders and miller-traders should be iii addressed by the government and other stakeholders to make the rice business a more paying enterprise. iv DECLARATION I, JULIANA ANDAGILE MWAKASENDO, do hereby declare to the Senate of Sokoine University of Agriculture that this thesis is my own original work and that it has neither been submitted nor being concurrently submitted for a degree award in any other institution. __________________ ________________ Juliana Andagile Mwakasendo Date (PhD Candidate) The above declaration is confirmed by: _____________________ _________________ Prof. Kim A. Kayunze Date (Supervisor) _____________________ _________________ Prof. Aida C. Isinika Date (Supervisor) v COPYRIGHT No part of this thesis may be reproduced, stored in any retrieval system, or transmitted in any form or by any means without prior written permission of the Author or Sokoine University of Agriculture in that behalf. vi ACKNOWLEDGEMENTS I acknowledge the Ministry of Agriculture, Food and Co-operatives for financing this research work. I highly appreciate the logistics given by the Zonal Director, Research and Development, Dr. Catherine Madata, the Zonal Research Coordinator, Mr. R Mghogho, and members of the Socio Economic Unit, ARI Uyole. I am most grateful to my supervisors, Dr. Kim A. Kayunze of Development Studies Institute (DSI) and Prof. Aida C. Isinika of Sokoine University of Agriculture (SUA), for their invaluable advice, criticisms, guidance and support during the research work, which made possible the successful completion of the PhD programme of study. I also extend thanks to my colleagues in the Development Studies Institute for their cooperation and encouragement during the entire study period. Many thanks to the Kyela District, Ward and Village Extension Staff for their cooperation during undertaking the study. Also thanks are due to rice farmers, traders and miller- traders for their hospitality, kindness and time devotion to answering my questions. Finally, I am most grateful and indebted to my family members for their patience, understanding, cooperation, endurance and tireless encouragement. My sincere hope is that this work will be practically connected to the improvement of rice marketing performance and poverty reduction of smallholder rice farmers, rice traders and rice miller-traders in Kyela District and other regions in the country. Despite the importance and generous input of all the people and institutions mentioned above, the final responsibility for this work rests on me. vii DEDICATION This work is dedicated to my late beloved daughter LULU Aloys Malyango, my late father Andagile Mwakasendo who passed away before the dreams of this work could be realised, and to my mother Enea Kalasya, Solile family, and Mwakasendo family for their love and patience. viii TABLE OF CONTENTS ABSTRACT .................................................................................................................... ii DECLARATION................................................................................................................ iv COPYRIGHT .....................................................................................................................v ACKNOWLEDGEMENTS .............................................................................................. vi DEDICATION .................................................................................................................. vii TABLE OF CONTENTS ................................................................................................ viii LIST OF TABLES .............................................................................................................xv LIST OF FIGURES ....................................................................................................... xviii LIST OF PLATES ........................................................................................................... xix LIST OF APPENDICES ...................................................................................................xx LIST OF ABBREVIATIONS AND SYMBOLS ........................................................... xxi CHAPTER ONE ..................................................................................................................1 1.0 INTRODUCTION.......................................................................................................1 1.1 Background Information ................................................................................................1 1.2 Problem Statement .........................................................................................................3 1.3 Justification of the Study ...............................................................................................4 1.4 Objectives, Research Questions and Hypotheses ..........................................................6 1.4.1 General objective ..............................................................................................6 1.4.2 Specific objectives ............................................................................................6 1.4.3 Research questions ............................................................................................6 1.4.4 Study hypotheses ..............................................................................................7 1.5 Structure of the Thesis ...................................................................................................8 ix CHAPTER TWO .................................................................................................................9 2.0 LITERATURE REVIEW ..........................................................................................9 2.1 Rice Production ..............................................................................................................9 2.2 Rice Marketing.............................................................................................................13 2.2.1 Market and agricultural marketing ..................................................................13 2.2.2. Marketing channels ...........................................................................................13 2.2.3 Rice marketing in Tanzania ............................................................................14 2.2.4 Price trends and rice marketing in Kyela district ............................................15 2.2.4 Marketing efficiency ......................................................................................16 2.3 Models for evaluating marketing performance ...............................................17 2.3.1 Internal Productive Efficiency of Marketing Enterprises (IPEME) ...............18 2.3.2 The Structure-Conduct-Performance model (S-C-P) ......................................18 2.3.3 Food system framework ..................................................................................19 2.4 Features of the S-C-P model ........................................................................................19 2.4.1 Market
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