Effects Of Cotton Market Liberalization On The Smallholder Farmers’ Livelihoods: A Case Study of Two Districts in Shinyanga Region, Tanzania

ABSTRACT

Market liberalization has been one of the most important and widely implemented aspects of the Structural Adjustment Programmes (SAPs) in sub –Saharan Africa (SSA). The general objective of the study was to investigate the effect of cotton market liberalization on the smallholder cotton farmers’ livelihoods in two districts in Shinyanga region, Tanzania. Specificically the study sought to assess cotton production and marketing, examine income change, and establish wellbeing of smallholder cotton farmers and their coping strategies resulting from the cotton market liberalisation. Data were from smallholder cotton farmers using a questionnaire and checklist directed to key informants. Furthermore Focus group discussions (FGDs) and observation were conducted in two districts Maswa and Bukombe, in which two villages were involved in the study. Furthermore 50 smallholder cotton farmers were randomly selected in each village making a sample of 200. The collected data were analysed using SPSS computer programme. The study found that there was a change in production and marketing after the cotton market liberalisation. Before the cotton market liberalisation there was a single channel of marketing and after the cotton marketing liberalisation there were multiple systems. It was also found out that there was an increase in smallholder cotton farmers’ income by 100% at an average of 8.3% per year from the sale of cotton after the cotton market liberalisation. There was improvement on the farmers’ wellbeing as smallholder farmers had more assets than before the cotton market liberalisation. Due to the problems confronting the co-operative as a coping strategy, smallholder cotton farmers were in the process of forming farmers associations that will enable producers to access required and affordable inputs, reduce costs through supply chain linkages and improve competitiveness. After the cotton market liberalization, the percentage of farmers who engaged in cultivativation of other crops for cash earning in addition to cotton increased from 11% before the cotton market liberalisation to 72% after the cotton market liberalization. It is therefore concluded that there was a significant improvement on

iii

smallholder farmers’ livelihoods resulting from market liberalisation. In view of the problems in the co-operative sector, it is recommended that smallholder farmers should form groups and associations to support their farming activities. On the part of the government, it should invest in rural infrastructure particularly rural roads and communication as they are among the major fundamentals to stimulating agricultural growth.