Enhancing rural livelihood in Tanzania through improvement of performance of agricultural crops marketing: experience from warehouse receipt system

Abstract

Implementation of the Warehouse Receipt System (WRS) in Tanzania started as a pilot project in the year 2000 with aim of addressing problems which were created by the introduction of trade liberalisation in crop marketing. Most of the studies which were conducted in the area investigated the importance and challenges of the systems in the country. However, little effort has been addressed in assessing performance of the system. The aim of this study, therefore, was to fill this knowledge gap by assessing performance of the system with special emphasis to rural livelihood. The study was carried out in Lindi, Mtwara and Kilimanjaro Regions and it adopted a case study design. Data for the study were collected by using documentary evidences. Both qualitative and descriptive statistics were employed in analysing data. Findings show that performance of the WRS in the country is influenced by availability of market information among all stakeholders; trustworthiness and reliability of actors in the system; existence of legal framework and conducive economic environment; and distribution of marketing benefits from agricultural crops. Achievements of the system in the country include: successful collection of all crops within the season; a steady increase of farm gate prices; crops sold according to their grades and quantities; and reduction of cash and crop losses. Despite the above-mentioned achievements, the WRS has been facing the following challenges: political interference by political leaders; competition between WRS and big private buyers who used to benefit from the unregulated system; contradictions between some sections of the WRS Act of 2005 and those of the Co-operative Societies Act of 2013; too many levies are imposed on crop which is sold through the WRS; and lack of established percentage of shrinkage in cashew nuts. Conclusions show that the WRS have the following advantages to farmers: creation of secured collateral from financial institutions; smoothening and stabilising prices of agricultural crops throughout the year. Under trade 181 181 liberalisation in crop marketing, it was observed that: farmers lacked the necessary marketing information; and there was unfair distribution of profits from agricultural crops between producers and buyers. Challenges of the WRS in the country include contradiction of sections between the two legal documents that are supposed to guide operations of the system; and plethora of taxes imposed on prices of agricultural crops sold through the WRS. The following recommendations were made from the study: producers of crops are encouraged to join the WRS; stakeholders of the system are urged to propagate importance of the WRS through seminars and workshops; government is advised to prepare simple Swahili versions of the legal documents that guide operations of the WRS in the country; and representatives of farmers and government are advised to form a team which will review and reduce unnecessary taxes and levies imposed on prices of crops sold through WRS.