Tanzania Agricultural Research Institute

Author(s) : Kangile, R. J and Mpenda, Z. T.

Abstract

Smallholder rice farmers purchasing inputs through irrigation scheme cooperative is vital since collective purchasing of production inputs reduces unit input cost and economizes transaction cost. This study was conducted to analyze factors underlying farmers’ decision making level on choosing (contractual choice) whether to purchase production inputs through the cooperative or other input providers. It also ascertains whether it makes differences in production cost for farmers purchasing inputs through cooperative and those who do not. Data were collected from 200 farmers that are members of rice specialized irrigation schemes in Morogoro and Coast regions. Descriptive statistics and choice model (logit model) were used for data analysis. Results revealed that, distance from the cooperative to the nearest town, number of organizations in which a farmer is a member, extension services, input quality satisfaction and availability of cash and credit as payment mode at the irrigation scheme cooperative are factors influencing smallholder irrigated rice farmers’ choice of production inputs provider. It was shown further that, farmers purchasing inputs through irrigation scheme cooperative have lower production costs than farmers purchasing from other input providers. It is therefore plausible to encourage farmers to purchase inputs through irrigation scheme cooperative of which will contribute to reduction of their production costs. This can be enhanced through ensuring that, inputs provided are of satisfactory quality and both cash and credit payment methods are used. In encouraging farmers to purchase inputs through the irrigation scheme cooperative, it is important to provide price incentive in the purchase of inputs.