Economic assessment of niche market arrangements in the fruit and vegetable value Chain in Tanzania
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Date
2013
Authors
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Journal ISSN
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Publisher
Sokoine University of Agriculture
Abstract
The main objective of this study is to create an understanding of the existing niche market
arrangements for high value products and to determine how small scale fanners can tap
into and sustain the niche markets channels. The study specifically assessed niche market
requirements for fruits and vegetables and the institutional arrangements that develop and
sustain trade relations between buyers and sellers. The study also analysed the effects of
transaction costs on market arrangements, linkages and relationship among traders, the
benefits of complying with the standards and factors affecting such benefits. Both primaiy
and secondary data were collected. Primary data was collected through questionnaires
which were administered to the niche markets, niche market suppliers (NMS) and the open
market sellers (OMS) through stratified simple random sampling technique with
proportionate allocation. Secondary data was collected from niche markets. By using
SPSS descriptive statistics analysed the data. Qualitative method using structural
theoretical analysis and quantitative methods using t-test and OLS regression were used as
tools for analysing the objectives. The study found out that niche markets demanded high
quality, mature, colourful and big but uniform size products. To ensure they obtain such
quality products niche markets were found working on contractual basis with NMS and
pay visits to where NMS source the vegetables. Most niche markets paid the NMS on
credit basis. The study found out that selling vegetables to the niche markets generates
more profit than selling in the open markets while NMS performing other businesses than
fruits and vegetables earn lower profit margins. To earn higher profit margins the study
recommended that farmers and NMS should trade directly with niche markets and
specialise in the fruit and vegetable business respectively. The government, financial
institutions and SACCOS should finance these farmers especially those working on credit
basis with niche markets.
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Keywords
Fruit and vegetable value, SOCIAL SCIENCES::Other social sciences::Labour market research, Economic assessment