Commercialization Pathways And Their Implications On Smallholder Rice Farmers’ Productivity And Welfare In Mbarali District, Tanzania

ABSTRACT

Agricultural transformation from low productivity to commercial agriculture has been a policy of concern in Sub-Saharan African countries whose economies depend on agriculture. Different pathways to commercialization have been adopted, including smallholder commercialization, medium and large scale commercial agriculture while others have adopted inclusive commercialization. However, the existing literature is inconclusive on which pathway should be adopted particularly in Sub-Saharan Africa. This study aimed at evaluating the most effective commercialization pathway (smallholder or inclusive) and its impacts on productivity and welfare on smallholder rice farmers in the pathways versus rain-fed farmers in Mbarali District. The study used cross-sectional survey data collected from a sample of 256 farm households. The data was analysed using output and input commercialization indices (CCI and ICI) and propensity score matching. Results indicated that, the overall output commercialization was more than half of the produced rice (CCI=59%) but the use of improved inputs in the study area was low (ICI = 27%). The proportion of rice sold was higher in the inclusive pathway (80%) relative to smallholder pathway (70%) and rain-fed scheme (41%). Total factor productivity ranged between 1.17 - 1.21 and 0.98 – 1.02 in the smallholder and inclusive pathways respectively more than the in the rain-fed scheme. Farmers in the smallholder and inclusive pathways earned between 7.65 – 7.68 million and 5.42 – 5.48 million TShs respectively more than farmers in the rain-fed scheme. For dietary diversity score, food consumption score and value of assets, inclusive pathway was better-off relative to smallholder pathway and rain-fed farmers. Based on these findings, smallholder pathway was effective in rice total factor productivity and income earned while the inclusive pathway was most effective in commercialization and welfare improvement. Since each pathway has some positive impact relative to the other, both smallholder and inclusive pathways should be adopted to explore the synergies.