Multi-level marketing system with industrial food processing in Africa: smallholder tomato farmers in Tanzania

Abstract

There are few challenges greater than the puzzle of how to move perishable goods from smallholders’ fields to final consumers, particularly where transportation barriers abound. Industrial processing can relax the perishability constraint and improve smallholders’ options. In Iringa, Tanzania, multiple tomato processing establishments and traditional marketing agents are available for farmers to use. Information about the channels is expected to be vital for producers to choose optimally. In this study, we collected field data from 286 smallholder farmers and analyzed their market channel choice using the random utility model implemented with multinomial logit regression. Revenue performance was further evaluated. Our results confirm that access to market information and extension services were associated with higher farm revenue. Women farmers had more concerns than men about lacking information. Market participation differed by size of the business. Farmers with higher harvested quantity were more likely to choose industrial processing. Producers with small farms preferred full marketing service and mid-size farms chose wholesale markets. Agribusiness management scholars may follow similar research design with future attention paid to elicitation of producers’ information about the marketing channels.