Warehouse Receipts System for Economic Welfare of Smallholder Cashewnut Farmers in Mtwara District, Tanzania.

Abstract

Warehouse Receipt System (WRS) was officially introduced since 2005 with the pilot crops of coffee and cotton in some areas such as Ruvuma and Mwanza as a response to farmers’ income instability due to price fluctuations resulting from liberalisation and in actual use since 2007. The study objective was to assess the effect of Warehouse Receipts System for Economic Welfare of Smallholder Cashew nut Farmers in Mtwara District, Tanzania with its specific objectives that were to determine the impact of Warehouse Receipts System on farmer’s income improvement, examine the effect of Warehouse Receipts System on smallholder cashew nut farmer’s accessibility to markets, examine the impact of Warehouse Receipts System on the improvements of quality cashew nut produced and Determine the challenges facing smallholder cashew nut farmers on adapting Warehouse Receipts System. The study employed cross-section design where the study was conducted at once in Mtwara district and it used the sample size of 302 farmers. Multi stage sampling technique was employed to select five wards where the study used the systematic sampling to obtain representative sample. Survey questionnaire and interview method was also employed to obtain quantitative and qualitative data. Multiple regression models were also used to assess the effects of Warehouse Receipts System for Economic Welfare of Smallholder Cashew nut Farmers in Mtwara District. Pilot study was conducted to test research instruments employed. The study revealed that WRS brought improvement to farmers income through accessing financial institutions and insurance services. It was also found that the key and vital role played by WRS such as accessing farmers to advanced storage facilities, well packaging materials had improved the quality of cashew nut produced in spite of some challenges that WRS had and eventually farmers’ income have increased to some extent. It was also revealed that delaying in payments and being paid for instalment was not satisfied the farmers. Age of the respondents, family size and the land size owned was found to have significant impacts to farmer’s economic welfare. The study concludes that farmers value WRS in its role which ultimately benefits farmers by increasing income that leads to improve living standard but the unethical behaviour of operators reduces the trust of WRS. The study recommended to policy makers including stakeholders like farmers, AMCOS and CBT to deal with the aspects of markets, price setting, post-harvest losses and challenges facing farmers accordingly.