The performance and determinants of rice export in Tanzania: a vector error correction analysis
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Date
2021
Journal Title
Journal ISSN
Volume Title
Publisher
Agricultural Economics Society of Tanzania
Abstract
The performance of rice export in Tanzania is inadequate despite the country being
the leading rice producer in the East African Community (EAC) region. Extensive
government interventions in the sector and existence of inward-looking trade
policies such as Common External Tariff within EAC region were expected to
increase rice exports especially intra-regional trade. The question is why the country
is performing poorly in terms of rice exports despite all the efforts and the favourable
environment for rice production. To answer this question, the present paper
analyses the determinants of rice exports in Tanzania. Specifically, it focuses on
examining the influence of price and non-price factors on rice export and assessing
the competitiveness of Tanzanian exported rice. The paper uses secondary data
collected from government institutions and other international data repositories.
Vector Error Correction Model was used to capture the dynamics of rice export in
Tanzania while the competitiveness of rice exported is assessed using Revealed
Comparative Advantage Model. Results show that, international rice price, quantity
produced and average GDP per capita of Kenya, Rwanda, Uganda and Burundi are
the key determinants for rice export performance in the country. Rice exported is
found to be less competitive within EAC regional market. The paper recommends
that the government should increase production to improve rice export performance
and achieve competitiveness. This will help to meet the export demand of rice to the
neighbouring countries and EAC region
Description
Conference proceeding
Keywords
Export performance, Competitiveness, Supply function, Tanzania, Vector error correction model