Smallholder rice farmers profitability in Agricultural Marketing Co-operative Societies in Tanzania: A case of Mvomero and Mbarali districts
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Date
2023
Authors
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Publisher
Heliyon
Abstract
mallholder rice farming in Tanzania is an important economic activity that has the potential to
livelihood improvement of smallholder farmers, yet their profitability remains low due to several
challenges they face. This study analyzed costs and benefits associated with smallholder rice
farming, determined profit distribution among farmers and assessed risk bearing ability of
smallholder rice farmers under changing circumstances of total variable costs, price and yields.
The study was conducted in Mvomero and Mbarali districts and adopted a cross-sectional
research design, the sample size was 382 smallholder rice farmers selected from three Agricul
tural Marketing Co-operative Societies during 2021 cropping season. Data were collected through
a questionnaire-based survey and key informant interviews. Data were analyzed using Statistical
Package for Social Sciences (SPSS) and excel whereby Enterprise Budgetary Technique and
Sensitivity Analysis were performed. The study found an average Return on Investment of 0.42,
Benefit Cost Ratio of 1.42 and Profit Margin of 24%. The level of profitability differed among co-
operatives where ‘Umoja wa Wakulima Dakawa’ (UWAWAKUDA) had the highest return per acre
(524 417 TZS) followed by Kapunga (414 111 TZS) and Madibira (316 638 TZS). Furthermore,
smallholder rice farmers’ Gross Margins were significantly affected by changes in Total Variable
Costs, output price and yield per acre. The study concludes that rice production is a profitable
business in the study area. Therefore, the local government, co-operatives and other stakeholders
should improve drivers that lead to increased profitability such as the water infrastructures,
organize markets and build farmers’ capacities to improve yields and profitability among
smallholder rice farmers.
Description
Research article
Keywords
Profitability Rice Smallholder farmers Co-operatives, Smallholder farmers, Co-operatives