Supply chain, agricultural marketing, agricultural trade and market liberalization


This study describes the prevailing marketing arrangements in Tanzania at local, regional, national and export markets using Dar es Salaam and Ifakara in Morogoro as case study examples. The major impediments for trade in Tanzania have been categorized into three groups: 1) Physical infrastructure, 2) know-how and capital, and 3) institutional framework. Insufficient physical infrastructure in terms of roads increases the cost of transportation, works as an informal market barrier, forms a wedge between the supplier price and consumer price, and increases the loss of perishable products. Lack of know-how shows in poor market orientation and business skills, and leads to difficulties in managing and obtaining loans. Furthermore, the current institutional framework is unable to support the formation of strong traders and producers’ associations and other representative bodies to enhance capacity building and to bargain for fairer terms of trade. In addition, the lack of market information and the weak legal framework lead to difficulties in negotiating trade agreements and enforcing the existing contracts. Currently the necessary institutional framework has been substituted for by long supply chains of middlemen, and relying on personal relationships between producers, traders and brokers

Full Text : PDF

  1. Ashimogo, G. (1995) Peasant Grain Storage and Marketing in Tanzania: A Case Study of Maize in Sumbawanga District, Verlag Köster, Berlin.
  2. Badiane, O. (1998), Marketing Policy Reform and Competitiveness: Why Integration and Arbitrage Costs Matter, IFPRI Discussion Paper No. 22.
  3. Barrett, C.B. – Reardon, T. – Webb, P. (2001) Nonfarm Income Diversification and Household Livelihood Strategies in Rural Africa: Concepts, Dynamics, and Policy Implications, Journal of Food Policy, Vol. 26, Issue 4, pp. 315-331.
  4. Barrett, C. (1997) Food marketing liberalisation and trader entry: Evidence from Madagascar, World Development, Vol. 25, Issue 5 (May), pp. 763-777.
  5. Baulch, B. (2001) in Devereux, S. & Maxwell, S. (eds.) (2001) Food Security in Sub-Saharan Africa, ITDG Publishing, London, UK.
  6. Besley, T. (1995), Nonmarket Institutions for Credit and risk Sharing in Low-Income Countries, Journal of Economic Perspectives, Vol. 9, No. 3, pp. 115-127.
  7. Besley, T. (1994) How Do Market Failure Justify Interventions in Rural Credit Markets, the World Bank Research Observer, Vol. 9, Number 1, January 1994.
  8. De Janvry, A. – Fafchamps, M. – Sadoulet, E. (1991), Peasant Household Behaviour with Missing Markets: Some Paradoxes Explained, Economic Journal 101, pp. 1400-17.
  9. Delgado, C.L. (1995) Agricultural Diversification and Export Promotion in Sub-Saharan Africa, Food Policy, Vol. 20, No. 3, pp. 225-243. Economist, March 10th 2005, Calling Across the Divide.
  10. Ellis, F. (1998), Household Strategies and Rural Livelihoods Diversification, Journal of Development Studies, 35(1): 1-38.
  11. Fafchamps, M. & Pender, J. (1997) Precautionary Saving, Credit Constraint, and Irreversible Investment: Theory and Evidence from Semi-Arid India, Journal of Business and Economic Statistics, Vol. 15, Issue 2, pp. 180-194.
  12. Fafchamps, M. (1996) The Enforcement of Commercial Contracts in Ghana, World Development, Vol. 24, Issue 3, (March), pp. 427-448.
  13. Furubotn, E.G. & Richter, R. (1997) Institutions and Economic Theory: The Contribution of the New Economic Theory, Ann Arbor: The University of Michigan Press.
  14. Gabre-Madhin, E.Z. (2001) Market Institutions, Transaction Costs, and Social Capital in the Ethiopian Grain Market, International Food Policy Research Institute, Research Report 124.
  15. Geertz, C. (1978) The Bazaar Economy: Information and Search in Peasant Marketing, The American Economic Review, Vol. 68, No. 2, Papers and Proceedings of the Ninetieth Annual Meeting of the American Economic Association, (May), pp. 28-32.
  16. Government of Tanzania (2003), National Transport Policy (NTP), Ministry of Communications and Transport.
  17. Government of Tanzania (2001), Agricultural Sector Development Strategy (ASDS).
  18. Government of Tanzania (2000a), National Micro-finance Policy.
  19. Government of Tanzania (2000b), Poverty Reduction Strategy Paper (PRSP).
  20. Government of Tanzania & Ministry of Cooperatives and Marketing (2005), Agricultural Marketing Policy (Second draft).
  21. Hendley, K. – Murrell, P. – Ryterman, R. (2000) Law, Relationships and Private Enforcement: Transactional Strategies of Russian Enterprises, Europe-Asia Studies, Vol. 52, No. 4. (June), pp. 627 – 656.
  22. Heltberg, R. & Tarp, F. (2002) Agricultural Supply Response and Poverty in Mozambique, Food Policy, Vol. 27(2), pp. 103-124.
  23. Hoff, K. & Stiglitz, J. (1990) Introduction: Imperfect Information and Rural Credit Markets: Puzzles and Policy Perspectives, World Bank Economic Review Vol. 4, No. 3, pp. 235-250.
  24. Huang, J. – Rozelle, S. – Chang, M. (2002) The Nature of Distortions to Agricultural Incentives in China and Implications of WTO Accession, Discussion paper.
  25. Jayne, T.S. – Govereh, J. – Mwanaumo, A. – Nyoro, J.K. – Chapoto, A. (2002) False Promise or False Premise? The Experience of Food and Input Market Reform in Eastern and Southern Africa, World Development, Vol. 30, Issue 11 (November), pp. 1967-1985.
  26. Key, N. – Sadoulet, E. – de Janvry, A. (2000) Transactions Costs and Agricultural Household Supply Response, American Journal of Agricultural Economics, Vol. 82, pp. 245-259.
  27. Kherallah, M. – Delgado, E. – Gabre-Madhin, E. – Minot, N. – Johnson, (2000) Agricultural Market Reforms in Sub-Saharan Africa: A Synthesis of Research Findings, revised draft, International Food Policy research Institute, Washington D.C.
  28. Kweka, J. (2004) Transport Cost and Trade Policy in Tanzania, A draft final report to Credit, Economic and Social Research Foundation, Dar es Salaam, Tanzania.
  29. Lele††, U. (1971) Food Grain Marketing in India, Ithaca, N.Y, Cornell University Press.
  30. McMillan, J. – Woodruff, C. (1999) Interfirm Relationships and Informal Credit in Vietnam, Quarterly Journal of Economics, Vol. 114, No. 4 (Nov., 1999), pp. 1285-1320.
  31. Milner, C. & Morrissey, O. (1999), ‘Measuring Trade Liberalisation in Africa’ in McGillivray, M. & Morrissey, O. (eds), Evaluating Economic Liberalisation, London: Macmillan, pp. 60-82.
  32. Milner, C. – Morrissey, O. – Rudaheranwa, N. (2001) Policy and Non-Policy Barriers to Trade and Implicit Taxation of Exports in Uganda, Journal of Development Studies 31, pp. 505-28.
  33. Moore, C. & de Bruin, A. (2004) A Transaction Cost Approach to Understanding Ethical Behaviour, Paper presented at the World Congress of Social Economics, Albertville, France, June 2004.
  34. NBS (2002) Morogoro Regional Socio-Economic Profile, Second edition, National Bureau of Statistic, Dar es Salaam.
  35. Pedersen, P.O. (2003) Development of Freight Transport and Logistics in Sub-Saharan Africa: Taaffe, Morrill and Gould revisited, Transport Reviews, Vol. 23, No. 3, pp. 275-297.
  36. Ponte, S. (1998) Fast Crops, Fast Cash: Market Liberalization and Rural Livelihoods in Songea and Morogoro Districts, Tanzania, Canadian Journal of African Studies, Vol. 32, No. 2, pp. 316-348.
  37. Putterman, L. (1995) Economic reform and smallholder agricultural in Tanzania: A discussion of recent market liberalisation, road rehabilitation, and technology dissemination efforts, World Development, Vol. 23, Issue 2 (February), pp. 311-326.
  38. Sadoulet, E. & de Janvry, A. (1995) Quantitative Development Policy Analysis, Baltimore, Md. John Hopkins University Press.
  39. Shechambo, F. (1993) The Search for Transaction Mechanisms for Agricultural Products in Tanzania: The Case of Lushoto District, Verlag Köster, Berlin.
  40. Temu, A. - Winter-Nelson, A. - Garcia, P. (2001) Market Liberalisation, Vertical Integration and Price Behaviour in Tanzania’s Coffee Auction, Development Policy Review 2001, 19(2), pp. 205-222.
  41. Von Braun, J. (1995) Agricultural Commercialization: Impacts on Income and Nutrition and Implications for Policy, Food Policy, Vol. 20, No. 3, pp. 187-202.
  42. Williamson, O. (1985) The Economic Institutions of Capitalism, Collier Macmillan Publishers, London.
  43. Williamson, O. (1983) Credible Commitments: Using Hostages to Support Exchange, American Economic Review, Vol. 73, No. 4, pp. 519-540.
  44. Williamson, O. (1981) The Economics of Organization: the transaction cost approach, American Journal of Sociology 87, pp. 548-577.
  45. Winter-Nelson, A. & Temu, A. (2002) Institutional Adjustment and Transaction Costs: Product and Inputs Markets in the Tanzanian Coffee System, World Development Vol. 30, No. 4, pp. 561-574.