Challenges in the Era of Globalization - iaabd

Proceedings of the 12th Annual Conference © 2011 IAABD
The search for poverty reduction and sustainability in agribusiness in Tanzania: Will value chain
approaches provide the insight?
Abstract
Lettice Rutashobya, letticer@yahoo.com
University of Dar es Salaam Business School and Lennart Bangens, Goteborg, Sweden
Informed by the value chain, socio economic, sociological, networks, linkages/relationships and systems
perspectives/theories, our theoretical analysis in this paper acknowledges that improving productivity at the farm
level will not suffice to improve the situation for the rural poor in Tanzania. That, an analysis of agriculture as a
system incorporating the whole value chain, is necessary. Hence, we argue that the failure of agriculture to function
as an engine of growth stems not only from ‘production’ considerations but from the organization and performance
of the value chain as a system. E.g. coordination with urban markets, relations between farmers and traders,
diffusion of knowledge, processing, etc are all part of the bigger picture. Hence, access to markets is about
identifying and trading with the right partners as well as promoting processing rather than just an infrastructural
issue as often claimed. More specifically, assessment of backward and forward linkages in agriculture, and the
whole value chain as a system should help identify constraints to agricultural sustainability and hence poverty
alleviation among farmers. Consistent with the network theory, we pay special attention to the role of long term
interaction amongst the actors in the value chain. Such analysis will enhance our understanding of agro-based
value chains in general and how the farmer fits in the chain.
Introduction
A lot of the debate on agricultural sustainability has focussed on how to improve farm productivity in a
very narrow sense. Subsequently government policies have concentrated on upstream part of the value
chain such as supply of fertilizer, credit to farmers, etc. Such narrow approach has not enhanced farmers’
ability to generate revenue, eradicate poverty and improve their livelihood. We argue that for agriculture
to be sustainable a more holistic view is required. To increase our understanding on the problems farmers
face research needs to take a systems perspective that will enhance our understanding of agro-based value
chains from socio-economic, sociological, environmental, linkage/relationship, attitude and culture
perspectives. The socio-economic perspective includes analysis of how economic value is created in
various stages of the chain from raw material to end products. The sociological aspect maps gender
distribution and the type of economic actors operating in the value chain. The environmental perspective
focuses on two main aspects: the sustainable use of resources, and the impact on the environment.
Environment includes the close micro-environment such as nearby forests, water resources, bio-diversity
but also issues of climate change at a wider level. The linkage /relationship perspective takes off from the
notion that it is more than discrete business transactions that control the behaviour and performance of
value chains. Attitude and culture represent the inner circles of behavioural determinants that influence
how economic actors perceive each other, and hence will indirectly affect the way linkages emerge and
are maintained.
Socio-economic perspective further concerns the value created which normally starts with an analysis of
the activities each actor perform along the chain. For agribusiness this could be such as land preparation,
planting, weeding, irrigation, harvesting, post-harvesting, processing, marketing, etc. The various costs
are calculated as well “value” from a strict economic viewpoint but also from a knowledge perspective.
Such an analysis enables a discussion of income generation and wealth creation in agro-based sectors.
Issues that address weaknesses in certain parts can be highlighted. E.g. is it the farming or marketing that
is the weak link or are most activities done in inefficient manner? Can the value chain absorb price
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