Pricing structure of agricultural products and sustainability of farmers in Tanzania: An empirical review

Abstract

This was a literature review on the pricing structures of agricultural products and the sustainability of farmers in Tanzania. The choice of the review was based on the availability of studies done in the area of agricultural products which is sufficient to analyse what is already known on the pricing structure. The study reviewed 18 papers that were related to the pricing of agricultural products in Tanzania basing on pricing theory. The study finding has concluded that agricultural products' pricing is viewed from two angles, the seller and the buyers' view point. The seller and or the buyer can influence pricing decisions; despite the pricing, the theory states that the pricing of agricultural products is determined by the demand and supply of a product in the market. The buyers and sellers have different objectives when setting prices; the buyer wants to maximise profit while seller wants to cover production costs with a small percentage profit margin. The study revealed that the product's demand and supply as part of pricing theory need to be used for the determination of the pricing structure of agricultural products. The study revealed that the principles of demand and supply are not well used in the pricing of agricultural products in Tanzania. The study comes with two recommendations; farmers creating a scarcity of products to increase demand for the products by establishing associations/cooperative societies for their sustainability. Strengthening the farmers' cooperative societies and having the same voice in the pricing of agricultural products