ASSESSMENT OF CONSORTIUM APPROACH IN FOOD VALUE CHAIN DEVELOPMENT ON INCOME OF SMALLHOLDER FARMERS IN TANZANIA, EAST AFRICA Prepared by EMMANUEL EJEWULE CENTRE FOR SUSTAINABLE DEVELOPMENT, UNIVERSITY OF IBADAN, IBADAN, NIGERIA IFAD – UNIVERSITY WIN- WIN PROJECT OCTOBER, 2017 LIST OF TABLES ....................................................................................................................... iv ACKNOWLEDGEMENTS ........................................................................................................ iv ACRONYMS/ABBREVIATIONS ............................................................................................. vi EXECUTIVE SUMMARY ........................................................................................................ vii 1.0 INTRODUCTION ............................................................................................................. 1 1.1 Background of the Study ............................................................................................... 1 1.2 Study Objectives ............................................................................................................. 6 2.0 Methodology and Technical Approach ............................................................................ 7 2.1 The Study Area ............................................................................................................... 7 2.2 Research Design .............................................................................................................. 9 2.3 Study Population ............................................................................................................ 9 2.4 Sampling Procedure and Data Collection Method ...................................................... 9 2.5 Sample Size Determination ......................................................................................... 10 2.6 Method of Data Collection ........................................................................................... 11 2.7 Data Collection Procedure ........................................................................................... 11 2.8 Analytical Methods and Techniques .......................................................................... 12 2.9 Experimental and Randomized Control Variable .................................................... 12 2.10 Measurement of variables and a priori expectations ................................................. 13 3.0 Value Chain Development in Agriculture ..................................................................... 17 3.1 Forms of Value Chain Approaches to Agribusiness ................................................. 18 3.1.1 Case Study of Mozambique: Cashew Value Chain ...........................................................19 3.1.2 Case Study of Kenya: Green Beans Value Chain ..............................................................20 3.2 Consortium Approach to Food Value Chain Development ..................................... 21 3.3 Southern Highland Rice Consortium (SHIRCO) ...................................................... 23 3.4 Competitive African Rice Initiative (CARI) Project ................................................ 24 3.5 Regional East Africa Community Trades in Staple (REACTS) Project ........................ 25 3.6 Characteristics of Paddy (Rice) .................................................................................. 26 3.6.1 Global Rice Summary .........................................................................................................26 3.6.2 Paddy (Rice) Production in Tanzania ................................................................................27 3.6.3 Rice Consumption in Tanzania ..........................................................................................29 3.6.4 Rice Market .........................................................................................................................30 Emmanuel Ejewule IFAD Report ii 3.6.5 Excerpt of Human Success Story from SHIRCO Consortium .........................................32 4.0 RESULTS AND DISCUSSIONS .................................................................................... 36 4.1 Socio-Economic Characteristics of Respondents ...................................................... 36 4.2 Group Membership of Farmers in SHIRCO ............................................................. 38 4.3 Main Planting Season and Source of Land ................................................................ 40 4.4 Research Results on Objective 1: To Determine the Effectiveness of Consortium 41 4.4.1 Skills and Knowledge ..........................................................................................................41 4.4.2 Production Inputs and Technology ....................................................................................44 4.4.3 Source and Type of Inputs Accessed by Farmers ..............................................................44 4.4.4 Source and Type of Production Technology Accessed by Farmers in SHIRCO Consortium ..........................................................................................................................................49 4.4.5 Warehousing Receipt System (WRS) in SHIRCO Consortium ........................................51 4.4.6 Farmers Access to Finance in SHIRCO Consortium .......................................................53 4.4.7 Marketing of Produce (Paddy) by Farmers in the Consortium ........................................54 4.5 Impacts of Consortium Approach on Mean Harvest, Revenue and Land ............. 55 4.5.1 Costs-Benefits Analysis of SHIRCO Consortium ..............................................................58 4.6 Research Results on Objective 2: ................................................................................ 61 4.7 Research Results on Objective 3: ................................................................................ 63 5.0 Identified Challenges in SHIRCO Consortium ......................................................... 64 5.1 Farmers ......................................................................................................................... 64 5.2 Input Suppliers ............................................................................................................. 65 5.4 Service Providers .......................................................................................................... 66 5.4 Lead Firm ...................................................................................................................... 66 6.0 CONCLUSION AND RECOMMENDATIONS ........................................................... 67 6.1 Summary of Major Findings ....................................................................................... 67 6.2 Conclusion ..................................................................................................................... 68 6.3 Recommendations ........................................................................................................ 69 6.4 Policy Implication: Creating Enabling Environment ............................................... 71 REFERENCES ............................................................................................................................ 72 APPENDICES ............................................................................................................................. 53 Emmanuel Ejewule IFAD Report iii LIST OF FIGURE Figure 1.1: Map of Study Area.............................................................................................................14 Figure 2.2: Kilimo Trust Consortium Approach to Value Chain Development (KTCA2VCD)………………………………………………………………………………...1 9 Figure 4.1: Distribution of Farmers by Training Received Before & After in the Consortium…….53 Figure 4.2: Distribution of Farmers by Level of Skill & Knowledge Enough to Continue in the Consortium………………………………………………………………………….....54 Figure 4.3: Inputs Bought in Required Quantity and Quality by Farmers Before and After in the Consortium…………………………………………………………………………………...55 Figure 4.4: Technologies Accessed in SHIRCO Consortium………………………………………..60 Figure 4.5: External Financing in SHIRCO Consortium…………………………………………....64 Figure 4.6: Cost- Benefits Analysis of SHIRCO Consortium for Paddy per hectare………………70 LIST OF TABLES Table 2.1: Sample Size Determination of the Study………………………………………..........16 Table 3.1: Estimates of Tanzania Rice Consumption and Production..………………………….20 Table 3.2: Tanzania Rice Production, Consumption, Export & Import…………………............22 Table 4.1: Distribution of Demographic Composition of Farmers..……………………….…….26 Table 4.2: Distribution of Farmland Used in the Consortium......…………………………….…26 Table 4.3: Distribution of Farmers by Satisfaction to Skill & Knowledge...…………………....29 Table 4.4: Inputs Access, Source, Delivery Mechanism, Payment Modalities and Satisfaction………….…………………………………………………………………....29 Table 4.5: Source of Inputs Accessed in SHIRCO Consortium by Farmers…………………56 Table 4.6: Inputs Delivery to Farmers in SHIRCO Consortium……………………………..57 Table 4.7: Payment Modality of Inputs Received by Farmers from Inputs Suppliers………58 Table 4.8: Timeliness of Accessing Inputs from Suppliers and Technology………………...…59 Table 4.9: Source of Technologies Accessed in SHIRCO Consortium………………………61 Table 4.10: Payment Modality for Technology by Farmers………………………………….61 Table 4.11: Forms of Marketing