Factors affecting smallholder farmers' Decisions on Livestock Investment option in Mbulu and Bariadi Districts, Tanzania

Abstract

With the increased demand for livestock related products, Tanzania remains low in terms of livestock investment. Smallholder livestock farmers still suffer from low income levels and poverty. This may be due to the different aspects affecting choices of investment options. This study investigated factors affecting smallholder farmers’ choice of Livestock Investment Decisions (LIDe) in Mbulu and Bariadi Districts when exposed to other investment options. A cross sectional research design was used where 333 smallholder farmers were surveyed. A Multinomial Logit Model (MNL) was applied for the analysis. It was found out that, head of household age, female headed households and wage employment have negative effects, while household size, availability of labour, income levels, assets owned, distance from the markets and investment outcomes have positive effects towards LIDe. Moreover, calculations of marginal effects results correspond with the odds likelihood to select an investment option by smallholder farmers. It is concluded that the direction of LIDe in rural Tanzania can be predicted from the corresponding effect of the factors. It is recommended that smallholder farmers need to be assisted to the appropriate choice of investment options.