Regional Markets

Regional Markets for Local Development
the country’s capital Dar es Salaam being the most important. RUDI identified three
major types of cereal value chains:
The traditional farmer–trader chain has the greatest number of actors (growers, traders
and millers) and supplies the largest amount of cereals to the market. The chain is
relatively disorganised and its farmers are less commercially oriented.
The small irrigated rice farmer–trader chain is the most dynamic chain with many
MSEs involved. The smallholder rice producers achieve higher yields and more regular
output volumes than other rice producers. They purchase many services and have
a good understanding of the market. They are interested in growing more cereals and
searching for new techniques and technologies to use on their farms;
The integrated miller–trader chain is very important for getting cereals to the formal
urban markets. It can however be a destabilising factor for local markets. Next to buying
and milling cereals, the firms attached to this chain are involved in many other
activities, including import of cereals. They will arbitrage the price of local cereals versus
price of imported cereals, and will continuously review the opportunity cost of their
investments. These firms can disappear from the market for a couple of years when
margins are too low or when it is more favourable to import, and then will re-enter
when the margins improve.
Producers
Almost all farmers interviewed for the baseline survey are smallholders who own
between 2 and 20 acres of paddy (rice) or maize, mainly for subsistence production. A
distinction is made between three main types of farmers. First, subsistence smallholders
are the most numerous farmers in the region and in the country as a whole. These farmers
cultivate one to five acres using traditional methods: they will either plough the field
by hand or will hire oxen with a plough (occasionally renting a tractor). Many local
labourers are hired during peak periods for planting, weeding, and harvesting/threshing.
The second type of smallholder, the small irrigation farmer, grow about one hectare
of rice in an irrigation scheme, often controlled by the government. Such farmer rents
a piece of land from the scheme, and is provided with water for his crops. He will
hire labour as required to meet key functions (ploughing, planting, weeding), and then
rents out his services, in turn, to neighbours to earn extra income. There are some scattered
small informal irrigation schemes too, such as the 100 acres in Mkula (Kilombero
District) which are farmed on very small plots (which have often been supported by
the Ministry of Agriculture and Food Security (MAFS). Irrigation provides the farmers
with the opportunity to produce more than one crop per annum and allows them
to control the timing of their production to harvest when prices are at their highest.
52