The Effect of Supply Chain Factors on Market Participation Among Smallholder Cereal Crop Producers in Tanzania

Abstract

Studies that address the effect of supply chain (SC) factors on market participation are relatively inadequate. To bridge this gap, we employ marginal effects analysis based on the binary logit model to examine the effect of SC factors on market participation among smallholder cereal crop producers in Tanzania. Data were sourced from 359 smallholder cereal crop producers using a cross-sectional questionnaire survey. The findings of the study indicate that SC infrastructure negatively and significantly affects smallholders’ market participation decisions ( β = −0.0918, p < .0013). Furthermore, the results of marginal effects suggest that market participation by smallholder cereal crop producers is positively and significantly affected by the extent of competition between agricultural SCs ( β = 0.1729, p < .0001), SC distribution strategies ( β = 0.2911, p < .0015) and collaborative SC ( β = 0.1856, p < .0002). These findings provide sufficient evidence to conclude that SC factors are significant predictors of market participation among the surveyed smallholder cereal crop producers. Consequently, streamlined measures should be undertaken to help smallholders increase their odds of market participation. These measures may include upgrading road infrastructure to tarmac or bitumen standards, especially in rural areas where farming takes place, infusing farmers’ associations and agricultural extension services, promoting collective marketing and strengthening long-term relationships between farmers and traders. Finally, the study offers valuable information to policymakers and agricultural stakeholders regarding addressing smallholders’ market participation challenges from a SC perspective.