Pricing-Supply Chain Issues of Staple Food Crops in Rural-Urban Tanzania

Abstract

The current study explores the effect of supply chain issues (SCIs) on the market prices of staple food crops in rural-urban Tanzania using a cross-sectional questionnaire survey and simple random sampling. Data were sourced from 313 farmers and traders of staple food crops from five regions in rural and urban markets within Tanzania. Exploratory factor analysis (EFA) and marginal effect based on a binary logit model were used for data analysis. The results revealed that SCIs do not offer an equal and uniform effect on market prices of staple food crops. Specifically, deficient SC infrastructure, inflated farming costs, SC and logistics costs and an indirect distribution strategy demonstrated a significant positive effect on market prices of staple food crops. Conversely, intensive competition within agricultural SC and the bullwhip effect had a significantly negative influence. Towards stabilizing the market prices of staple food crops, the authors recommend centralizing market demand and supply information among farmers and traders, thereby eliminating the use of intermediaries by establishing and joining farmers’ associations and cooperative societies. Also, to make transportation and distribution of staple food crops easier and more cost-effective, local governments should take streamlined measures to improve road conditions, especially in rural areas where farming mostly takes place. While previous studies address the causes of fluctuation in market prices of agricultural products from climatic, economic and legal perspectives, this study contributes to a better understanding of the causes of variations in market prices of staple food crops from SC perspective in rural-urban Tanzania.