Socio-economic Benefits of Marketing Channel Choices by Smallholder Farmers in Tanzania

Abstract

Liberalization reforms in the early 1990s introduced various marketing channels for farmers, significantly impacting both the agricultural sector and its participants. This study aimed to analyze how farmers' choices of marketing channels affect the sustainability of Agricultural Marketing Cooperatives (AMCOS) for coffee and cashew nuts. Specifically, it investigated the characteristics influencing farmers' channel choices, assessed the socio-economic benefits of these choices for farmers and their households, and determined the effect of marketing channel choices to AMCOS. The study utilized both quantitative and qualitative data from primary and secondary sources, including surveys, Focus Group Discussions (FGDs), Key Informant Interviews (KIIs), and documentary reviews. Content and descriptive statistics were used for data analysis. Findings indicate that socio-demographic factors significantly influence coffee and cashew nut production among small-scale farmers and substantially affect the volume of produce sold to AMCOS, which in turn impacts AMCOS's sustainability. Coffee farmers have access to a variety of marketing channels, while cashew nut farmers are limited to a single channel, AMCOS. The study recommends that the government, through the Ministry of Agriculture in collaboration with Local Government Authorities, should ensure timely availability of subsidized agricultural inputs and funds for cooperatives at the beginning of the harvest season. Additionally, the Tanzania Co-operative Development Commission (TCDC) and AMCOS should implement nationwide programs to sensitize small-scale farmers, especially the younger generation, to actively engage in production processes. These measures are expected to boost agricultural outputs and ultimately enhance the sustainability