Abstract
This study aimed at examining the effect of crop commercialisation on rural households’ poverty in Tanzania. The household survey data was collected from a sample of 389 rural households. Commercialisation index was used to estimate the level of household crop commercialisation. The principal component analysis was used to develop a household welfare index which was then clustered to identify poor and non-poor households through cluster analysis, the method automatically guided the decision retaining two clusters by calculating the measure-of-fit that is Bayesian Information Criterion (BIC). To examine the factors affecting the household poverty status, a logistic model was employed. Results revealed that the majority (65.6%) of the households are poor. The level of crop commercialisation is averaged to 66% indicating a commercialised farming practice. The results further showed that crop commercialisation, women participation in crop income allocation, off-farm income, access to extension services and household size significantly reduce household poverty while household head’s age had an adverse effect. The study suggests that the small and medium agricultural processing units in rural areas should be given priorities and strengthened since they are crucial to promoting the level of commercialisation among rural households. Furthermore, in periods of sufficient and excess harvest, the crops trade restrictions with the neighbour countries should be eliminated to increase the level of commercialisation and earnings to the local rural farmers.
Highlights
Half of the total world’s population maintain their life in rural areas, that is 3.3 billion as compared to 3.9 billion in Urban areas in 2014 [1]
The results show that the majority (80%) of the respondents attained a primary education and the level of illiterate in the household head stood at 7.5%
This part of econometric analysis consists of the logistic estimation of the household welfare and several diagnostic tests of the model
Summary
Half of the total world’s population maintain their life in rural areas, that is 3.3 billion as compared to 3.9 billion in Urban areas in 2014 [1]. Among these rural dwellers, roughly 75%, earn their living from agriculture. In Tanzania, the agriculture sector accounts for 24% of the country’s gross domestic product [4] It further accounts for more than half of the employed workforce, and provides a means of livelihood to approximately two-thirds of the population [5]. Despite the huge contribution of agriculture sector to Tanzania economy, it does not suffice to eliminate poverty among Tanzanians in rural areas and the main reason is that they lack agriculture processing units and manufacturing plants which could have added value to the raw farm output [4]
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