Profitability Analysis of Rice Production, Constraints and Consumption Shares by Small-scale Producers in Tanzania

Abstract

Aims: The study examines the profitability of rice production, its key factors, and the consumption shares at household level.
 Study Design: A cross-section study design was used in this research.
 Place and Duration of Study: The study was conducted in the two Districts of Mbarali and Kyela in the Mbeya Region of Tanzania from January to March 2018.
 Methodology: Structured questionnaires were used to collect primary data from 240 small scale rice producers. Data analysis was performed by descriptive statistics and Farm Budgetary Techniques was used to calculate farm economic viability variables including profitability index, return on investment, capital turn over and benefit cost ratio. The Kendall’s coefficient of concordance was used to pinpoint and examine the key factors affecting rice profitability by farmers in the study area.
 Results: Descriptive statistics revealed that majority farmers have 45 years and below, 95.8% of the farmers are married. Majority (83.3%) households have family size of 2-4 individuals indicating shortage of family labor. About 80.8% of the respondents allocated farm size of 1-3 hectares. The budgetary farm technique revealed that average total cost, gross margin, and net farm income was 846450 (~ US $ 368.08), 1484175 (~US $ 645.41) and 1357975 (~US $ 590.73) Tanzania Shillings respectively. The profitability index, return on investment, capital turn over and benefit cost ratio for producers were 9.5%, 160, 2.6 and 3.1 respectively. According to Kendall’s coefficient of accordance, the identified main constraints for economic viability of rice production were weather variability, lack of access to irrigation services, rice price instability, lack of access to agricultural information and technology, and poor access to the key production inputs.
 Conclusion: It indicates that rice production is a profitable business in the study area and still there is potential for improving from the current yield. It was demonstrated that most of rice outputs are for commercial purposes with regards to consumption shares. This shows that rice is highly growing as commercial food crop in the Tanzania.