The Impact of Alternative Vertical Coordination Mechanisms for the Development of Small Scale Farmers. A Case Study of Bindura District.

Author(s)

Victoria Mudavanhu , Benjamin Musindo , Lazarus Muchabaiwa , Samuel Bindu , Lloyd Chigusiwa ,

Download Full PDF Pages: 86-99 | Views: 313 | Downloads: 93 | DOI: 10.5281/zenodo.3466168

Volume 5 - October 2016 (10)

Abstract

The study sought to assess the impact of the alternative vertical coordination mechanisms for the development of small scale farmers. Zimbabwean government has put small scale farmers as an important key to fight against poverty, create more wealth through increasing productivity in the agricultural sector. The study used descriptive design, questionnaires were distributed to a sample of 50 small scale farmers. Data was analyzed using the multiple linear regression. The research found that the production of tomatoes under contract was associated with significantly higher incomes compared to those who sold on the spot markets or open marketing. Spot markets, while providing occasional high returns to farmers have in turn high price risks and risk of non-sale of products or loss of quality. Contract price were significantly higher than open market prices, but trading on the later involved extra transaction costs such as transport and accommodation. The main conclusion was that contract production and marketing was more profitable and effective than open marketing. The research recommended that government should facilitate the development of small scale horticulture sector through improving the road networks that link rural and urban areas. Access to capital should be improved, government should provide relevant information so that farmers can use timely information to make production and marketing decisions. Government to rehabilitate the national research institutions and link them with extension service, provide efficient markets and intellectual property rights protection through regulation and enforcement of contracts in the horticultural market to ensure sustainable development of small scale farmers.

Keywords

 Vertical coordination, Small scale farmers, Open marketing, Contract markets, Zimbabwe. 

References

  1. Arrow, K.J (1969) The Organistion of Economic Activity: Issues Pertinent to the Choice of Markets issues versus nonmarket allocation, in the Analysis and evaluation of public Expenditure: the PBB System Vol. 1, U.S joint Economic Committee. Washington D.C.
  2. Baumol, W.J et al (1982) Contestable Markets and Theory of industry and Structure. Harcourt Brace Jovanovich. New York.
  3. Boland M. el ta (2002). Agricultural Marketing Resource Center. Kansas State University.
  4. Boland, M.A, Lusk, J. and Barton. D (1998) Factors Underlying producer Investments in processing cooperatives Research Report #31, Department of Agriculture Economics, Kanas State University. Manhattan.
  5. Coase, R.H, (1937) The nature of the Firm, Economica, Vol 4.
  6. Dahmlman,C.J (1992) the problem of externality, journal of Law and Economics, Vol 22.
  7. Fischer,S (1998) Long – term Contracting, Sticky Prices, and Monetary Policy: A Comment., Journal of Monetary Economics., Vol 3.
  8. Foster, D.L (1996) Capital structure, business risk, and investor returns for agribusiness. Agribusiness: An international Journal 12: 429 – 442.
  9. KImenye, L.N (1993) the Economic of smallholder flower and French Beans production in Kenya, Ph.D. Dissertation, Michigan State University, East Lansing.
  10. Kotler, P. (1991) Marketing Management, Engelwood Cliffs, Prentice Hall, NI.
  11. Mabaya, E. (1998) smallhoulder Horticultural Markets in Zimbabwe: Market Organisation and price Movements, MS Thesis, Cornell University.
  12. Malik S. (2006) Women welfare projects and development, Sindh Minister for women. Karachi, development publishers.
  13. Martinez, S. and A Reed. (1996) From farmers to consumers: vertical coordination in the food industry. AIB – 720, Economic Research Service, U.S. Department of Agriculture.
  14. Martinez, W.S. 1996. Vertical coordination in the food industry. Agricultural Economics Report Noo. 720.
  15. Rukuni M.(2001), “Getting Agriculture moving in East and Southern Africa and Framework for action” CIMMTY.
  16. Takavarashe, T. (1994) Zimbabwe’s Agricultural Revolution, edited by Mandivamba Rukuni and Carl Eicher, University of Zimbabwe Publications, Harare.
  17. Thomas L. Sporleder, 1992. American Journal of Agricultural Economics. Vol 74, No. 5 1226-1231.
  18. Todaro MP, (2003). Economics for a Developing World. Burnt Mills, Harlow, Essex, UK. Washington: ERS/USDA

Cite this Article: