Economic Analysis of Factors Affecting Maize Production in Tanzania: Time Series Analysis

Abstract

Maize is an important food and income earner for rural and urban dwellers in Tanzania. Despite efforts done by the government and private sector, the yield of maize has remained significantly below the average of less than 2 metric tonnes per hectare. This threatens food insecurity and poverty for rural people. This study analyses the economic factors affecting maize production in Tanzania for a period of 61 years. Time series data on aggregate maize production, fertilizer price, total area under maize cultivation, the total seed used, expected price of maize and average annual rainfall for the period 1961-2020 were analyzed using a vector error correction model. Empirical findings revealed that the total area under maize cultivation, the total seed used and average annual rainfall have a positive relationship with aggregate maize production; but fertilizer price and expected price of maize have a negative relationship with aggregate maize production. In terms of statistical significance, the study found that the area cultivated was statistically significant; but seed used, price of fertilizer, expected price of maize and average annual rainfall were statistically insignificant. The study recommends formulation of policies about intensive agriculture, fertilizer and seed subsidization and irrigation schemes to increase productivity.