Abstract:
Tanzania is an agrarian economy. On the average, the agricultural sector accounts for about 50% of the
Gross Domestic Product (GDP) and 80% of the recoded export earnings per year (Kashuliza and Ngailo,
2000). According to the Agricultural Sector Development Strategy (2001), agriculture employs about 82%
of the country's labour force, the majority of who are rural small holds farmers who operate between 0.2
and 20 hectares. The small holds farmers have formed rural producer organizations (RPOs) for addressing
problems associated with economic activities and other welfare issues. The RPO is the only platform
whereby people in the associative economy can voice their own interests and be heard. They are the only
organisations that can lead to social and economic development in the total areas. These rural producers’
organisations are formed such that the small scale farmers realize economics of scale and reduce transaction
costs in marketing and supply of inputs.
