Market access for smallholder tomato farmers in Mashonaland East Province of Zimbabwe: an economic analysis

Abstract

Linking small primary producers with markets has been identified as one of the major issues in policy and practice in improving livelihoods for millions of poor in Zimbabwe. Hence this study assessed the current market situation as a way of tracking and tracing efficacy and efficiency failures leading to more informed decision making with regard to redesigning of the matching market for smallholder farmers. The objectives of the study were to identify the tomato supply chains, analyse the price behaviour of tomato, assess the economic performance of the major supply chains, evaluate the institutional innovations in the supply chains and suggest viable supply chain options for smallholder tomato farmers in Zimbabwe. Tomato crop was chosen for the study as it is among the most important vegetables grown by smallholder. The study was based on both primary and secondary data. The study was conducted in Mashonaland East Province. Primary data were collected by means of formal interviews and structured questionnaire from farmers, market-intermediaries and government officials. Multi-stage random sampling technique was used for sample selection. Descriptive analysis was employed to provide a snap shot of the situation under study, which consisted of household level information. The Random Utility Model was employed to determine the factors which significantly influence the market accessibility. The price behaviour was studied using the techniques of classical time series. The Supply chain mapping was done to identify the actors. The study employed Data envelopment analysis to assess economic performance of supply chains and allocation of resources. Volume mapping results indicated that the supply chain, which involved hawkers, was handling the largest volume of tomatoes approximately 409.4 tonnes in one production cycle in 2013 season. The chain that included wholesalers/processors was the least in terms of quantity handled (39.4 tons) showing that it was not accessible. Data envelopment analysis results indicated that the chain that included wholesalers and processors was the only efficient chain when constant return to scale was assumed. Supermarket chain was efficient when variable returns to scale was assumed. The chains that included passers-by and hawkers were inefficient under both constant returns to scale and variable returns to scale technologies. The seasonal index results showed that the tomato prices were highest and lowest in July and November respectively when prices were 31 percent higher than the annual average price and 43 percent below the annual average' price. Spatial markets were not efficient in the short run although showing stable equilibrium in the long run. The price changes were transmitted from one market to another at a rate between 22 percent and 24 percent in the short run which proved to be low. There was no centre market among six municipal markets since price changes were to be set around more than one market. Random Utility model results showed that credit, greenhouse and cooperative membership were significantly influencing participation of smallholder farmers in formal markets. Data envelopment analysis results showed that farmer, on average could reduce input consumption by 12 percent and 27 percent at production and marketing stages respectively. The study concluded that the opportunities to improve profits lie in the marketing perspectives rather than production for tomato producers under study. Farmers can gain better income by reducing consumption of inputs without necessarily asking for high prices. The higher market price cannot compensate the value loss incurred by the high level of transaction costs. Tomato producers should pursue the low transaction costs marketing chains rather than ask for a higher market price. The chain that included hawkers should be given due attention and modem matket infrastructures should be established in rural areas in order to relay reliable, relevant and correct information to the farmers.