Smallholder Rice Farmers’ Technical Efficiency: Implication for Competitiveness through Agricultural Marketing Co-operative Societies in Tanzania

Abstract

Agricultural Marketing Co-operative Societies (AMCOS) are increasingly being advocated by the government of Tanzania as a way to  enhance smallholder farmers’ competitiveness countrywide. Yet, the smallholder rice farmers’ competitiveness is low. This paper  analysed the smallholder rice farmers’ competitiveness in terms of Technical Efficiency (TE) in Morogoro and Mbeya regions, Tanzania.  Data were collected from 382 smallholder rice farmers. The Cobb-Douglas stochastic frontier model was used to establish the frontier line  of the farmer’s production potentials by a single-stage Maximum Likelihood Estimates. The findings show that the mean TE indices  for Kapunga, Madibira and UWAWAKUDA AMCOS were 84.9%, 87.6% and 79.1% respectively. Across AMCOS, it was found that  intermediate costs, labor costs, fixed costs and amount of fertiliser influenced productivity ( P<0.05) while access to training, water  distribution, ploughing time, planting systems, and access to credit influenced TE (P<0.05). The mean TE for the whole sample was 83.8%  indicating that smallholder rice farms in the study area have been operating below the maximum level of production frontier and given  the available technology, farmers can increase their production by 16.2%. The rice production in terms of TE has not reached a plateau, hence there is a potential for improvement. This study recommends that policymakers should prioritize the implementation of targeted  training programs and enhance access to agricultural inputs and credit facilities to improve the technical efficiency of smallholder rice  farmers. The Local Government Authority and development partners espoused with improving smallholder farmers’ livelihoods should  ensure farmers’ access to credit and increase farmers’ linkages to credit providers in the rice farming schemes.