Browsing by Author "Claude Maeda"

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    Impact of smallholder farmer horizontal and vertical linkages on ac-cess to prime markets and household welfare in sub-Saharan Africa: the case of Tanzania
    (2015) Raoul Herrmann; Ephraim Nkonya; Anja Faße; Claude Maeda; Khamaldin Mutabazi; Lutengano Mwinuka
    Agricultural development policies and investments in sub-Saharan African (SSA) countries have largely focused on crop and livestock production (Almond and Hainsworth 2005). Only about 6% of full-time equivalent researchers are socio-economists (ASTI raw data). Additionally, in a study of five SSA countries, Benin and Yu (2012) observed that total expenditure on marketing, feeder roads and regulation as percent of total public agricultural expenditure (PAE) was lower than 32%. This clearly shows the production orientation of PAE and apparent neglect of market development, which is key to increasing farmer incentives for land investments (Barrett et al 2010; Barrett 2008). Moreover, Schmidhuber and Bruinsma (2011) estimated that to achieve food security by 2025, 37% of the additional US$50.2 billion investments required will be for developing rural infrastructure and market access. Past experience has shown that investment in smallholder farmer production that is not supported by strategies to enhance access to markets does not lead to long-term adoption of improved agricultural practices. For example, work in Ethiopia, Tanzania, Zambia and elsewhere to push hybrid maize and inorganic fertilizer through on-farm demonstrations by organizations like Sasakawa Global 2000 (SG2000) led to significant productivity growth and almost 100% adoption by participating farmers. One of the important attributes of SG2000 that led to the large impact on adoption rate was its in-kind input loan. Access to credit and marketing services was required for adoption of expensive external input by smallholder farmers. However, beneficiaries of SG2000 program reverted back to the old practices of using unimproved maize seeds and non-application of fertilizer after the project ended (Stepanek et al 1999). In Ethiopia, for example, the government adopted SG2000 in its national extension program (NEP) that targeted 3.6 million farmers (out of a total of 10 million rural households) to use the SG2000 model by 1998 (ibid). The resulting high adoption of improved maize seed and inorganic fertilizer, however, resulted in a production glut that pushed maize prices to a level that rendered unprofitable use of purchased maize seeds and fertilizer. This experience has resulted into renewed attention to the value chain 4 approach in support of the agricultural sector and a new surge of public support with accompanying measures for infrastructure development (World Bank, 2007).1 Developing horizontal and vertical linkages is often argued to be an effective organizational innovation in FVCs to overcome constraints for small-scale producers and traders to participate in high value markets (e.g. Biénabe, & Sautier, 2005; Kaganzi et al 2009). Horizontal linkages is a long-term cooperative social capital formed to accomplish common goals among farmers or agricultural traders/processors with beneficial interdependence, trust and resource pooling (USAID 2015; Berkes, 2002; Trienekens, 2011 and Faida, 2006). Vertical linkage is a social capital across non-competing actors – i.e. actors at different levels of the value chain (Ibid). For example, cooperation of producers (farmers) with processors is a vertical linkage since the two are not competing and are at different levels along the value chain. Using Tanzania as case study, we analyze the impacts of horizontal and vertical linkages in food value chains (FVCs) (specifically among smallholder farmers and traders) on market access, household welfare assess the drivers of participation in horizontal and vertical linkages by producers and traders. The study contributes to the literature since very few past studies on horizontal and vertical linkages have analyzed their impacts on income and food security. Additionally, the present research contributes to analysis of the impact of social capital and other group characteristics on the marketing performance of lower-tier organizations such as producer groups, an aspect which has not yet received significant attention in past studies. We use econometric approaches to analyze the drivers of the horizontal and vertical linkages. In addition, qualitative interviews were conducted in the sunflower value chain, which is used as a case study on horizontal and vertical linkages in Tanzania. The rest of the paper is organized as follows. The next section lays out the conceptual framework for addressing constraints that inhibit smallholder farmer access to prime markets. This is followed by a review of agricultural marketing policies related to horizontal and vertical linkages. The data and methods and quantitative results are discussed in the fourth section. Section 5 presents the sunflower case study. Finally, conclusions and policy implications are drawn based on the empirical evidence and institutional and policy analysis.