Managing Institutional Innovations through Farmers Organizations in the Sugarcane Subsector in Tanzania: Potentials and Limitations

Abstract

Institutional innovations such as contract farming are essential for facilitating agricultural transformation with smallholder farmers being key players. While contract farming (CF) provides smallholder farmers with access to production and marketing opportunities, the role of farmer organizations (FOs) that are entrusted to manage CF arrangement remains less understood. In this paper, the potentials and limitations of FOs in managing institutional innovations are assessed based on a qualitative study involving farmer organizations, Kilombero Sugarcane Company Limited and government institutions between June and October 2021. The study used thematic analysis to analyze the collected data in order to generate new insights and concepts. The findings suggest that proper management of CF enables smallholder farmers to access credit and improved agricultural inputs as well as extension services and improved infrastructure from the sugarcane companies. While access to output markets at reasonable prices remains a major incentive mechanism for improving technical efficiency and productivity, FOs strengthen social cohesion and hence, the social capital for smallholder farmers. The study indicates that, insufficient market facilities and information, inadequate extension services as well as bureaucracy in the distribution of input credit through FOs are some of the limitations facing smallholder farmers in CF. Based on the foregoing, it is pertinent to recommend that concerted efforts are needed from diverse stakeholders to strengthen FOs thus enabling them to effectively deliver services to the members. Limitations and avenues for further research are also discussed in the text.