Rice Commercialization in Mngeta Kilombero District, Tanzania: Policy Implications for Inclusive Poverty Reduction

Abstract

Agricultural commercialization is sought for its effect on productivity, income and livelihood improvement. Rising agricultural commercialization also contributes to employment, foreign currency and government revenue through taxes. It may however have various undesirable outcomes. Rising commercialization from area expansion may increase the smallholders’ vulnerability if they sell part or all of their land. Meanwhile, intensification can have negative effects from increasing use and poor handling of agrochemicals. This paper used pooled cross section data on rice commercialization from Mngeta division in Kilombero valley, Tanzania; collected in two waves (2017 and 2019), to assess commercialization levels among different farmer categories and its impact of on livelihoods and social inclusion. The paper addresses three basic questions; Are commercialization levels dynamic over time? Do commercialization levels differ across farmer categories? Is rice commercialization poverty reducing at all levels? The analysis compares across farmer categories, the effect of commercialization influencing factors and the subsequent effect of rice commercialization on livelihood outcomes. The findings show that commercialization is happening through intensification and extensification but it is not yet on a steady increasing trend and both options have sustainability implication. Meanwhile, poverty reduction is observed across all farmer categories due to rice commercialization and diversified livelihood options, however it is only significant above the fourth quintile (>60% with a social difference). Gender, age and cultural norms are identified as exclusion barrier that need to be addressed in order to enhance inclusion of those benefiting less from agricultural commercialization processes. These finding inform village, district and national level decision makers as they strive to overcome inclusion barriers Keywords: Commercialization, inclusion, diversification, rice, poverty reduction, Kilombero, Tanzania DOI: 10.7176/DCS/12-7-04 Publication date: September 30 th 2022