The integration of smallholders in agricultural value chain activities and food security: evidence from rural Tanzania

In Tanzania, about three-quarters of the population is employed in smallholder agriculture. In addition, about 70 percent of the population lives in rural areas, which are often characterized by food insecurity due to a reliance on less productive subsistence farming.  The integration of smallholders into agricultural value chains (AVCs) is seen as a way of improving smallholders’ food security and welfare.

A recent paper in Food Security investigates smallholder participation in traditional AVCs in Tanzania. Specifically, the paper investigates the effects of participation in various AVCs on household food security. This study is particularly important as most previous studies have focused on smallholder integration in high-value and export-orientated AVCs.

Value chains involve a series of activities such as production, processing, storage, transport, and distribution. AVCs can be traditional or modern, with modern AVCs having more well-established linkages among input suppliers, producers, processors, output suppliers, and retailers. By contrast, traditional AVCs are less coordinated, generally involve a large number of producers and retailers, and are mainly governed through informal markets.

The study area comprised six villages (Changarawe, Nyali, Ilakala, Ilolo, Ndebwe, Idifu) in two regions in Tanzania (Morogoro and Dodoma). These six villages were chosen because of their comparable but diverse their agro-ecological and socioeconomic conditions. Data was collected through a primary household survey covering 900 households (150 households per village) conducted in January and February 2014. Detailed information was collected covering linkages to input markets, the production of various crops, post-harvest management activities, and participation in output markets. For household food security, information on household food expenditure, food consumption and food security shocks was collected. Using this data, the study conducted a cluster analysis to explore different smallholder livelihood activities and the extent of participation in traditional AVCs (whether smallholders were involved in production, post-harvest, or marketing activities and whether they used improved inputs). Through various regression equations, the study analysed the food security effects of various AVC activities.

The results indicate considerable variation in the integration of smallholder farmers in traditional AVCs among different household groups. Overall, integration of smallholders in traditional AVCs is relatively low; only about 21 percent of households used improved inputs (improved seeds, fertilizer, and pesticides) and 26 percent of households undertook initial processing. About 47 percent of households stored their crops to sell at a later date and they stored crops for an average of 1.7 months. Regarding different income groups, the study found that low-income households (which were mainly involved in subsistence farming and the keeping of livestock) were least integrated into AVCs. Middle-income and wealthier households, on the other hand, were more integrated in all AVC activities (recorded higher levels of production, post-harvest processing and storage, marketing, and the use of improved inputs).

Similarly, regarding the effects of participation in different traditional AVC activities on food security, the study finds a positive correlation between a household’s integration into AVC activities and food security. In particular, households that used improved inputs and that stored production for later sale were found to be significantly more food secure than other households that did not partake in these activities. Possible explanations for this trend are that the use of improved inputs raises crop productivity and the selling of crops increases incomes and supports dietary diversification. Households that can store crops are often better able to time sales to receive higher prices or to better manage household consumption to avoid lean periods.   

Participation in multiple AVC activities (as opposed to just one activity) is also found to increase a household’s food security. The paper argues that this suggests that further integration of smallholders in multiple activities could lead to increased welfare and food security, compared to participation in individual aspects of traditional AVCs.   

Based on these results, policies that promote smallholders’ access to agricultural technologies and inputs and that support the creation of an enabling environment (through developing institutions and infrastructure) would facilitate smallholders’ access to and integration into AVCs. This would in turn improve smallholder welfare and food security in Tanzania. In addition, the paper argues that it is important that the design of policies takes into account the diversity of activities in traditional AVCs and does not solely focus on promoting one activity. Further research is needed on a broader set of AVC activities to develop a better understanding of the effects of integration into traditional AVCs on the welfare of smallholders.

By: Bas Paris