Main Article Content

Felister Yakobo Tibamanya
Joseph Andrew Kuzilwa
Daniel Fabiano Mpeta

Keywords : liquidity limitation, self-financing, high-yielding sunflower seeds, productivity, smallholder farmers, Tanzania

This paper investigates the opportunities for smallholder farmers to self-finance the use of high-yielding sunflower seeds, by considering their marketable noncommercial asset levels and their perceptions versus the reality of liquidity limitations. The study used a cross-sectional survey covering 416 randomly selected smallholder sunflower farmers in the study area of Tanzania. It makes use of the crafted choice experiment approach to assess the degree of liquidity constraints among smallholder farmers in buying high-yielding seeds, and their willingness to receive a low-interest credit or loan to purchase high-yielding seeds given before or after sowing. Results reveal that liquidity limitation is a perceived rather than a real problem, and it is feasible for farmers to self-finance the use of high-yielding seeds using their own marketable noncommercial liquid assets like livestock and chickens. The results further indicate however, that smallholder sunflower farmers are lacking adequate knowledge of the value of their liquid assets and of the opportunity cost or benefit of taking a credit/loan to finance the use of high-yielding seeds. The implications of these findings is that educating and sensitizing farmers about their potential resources, financial base, and the real cost of credit may influence their choice for self-financing and borrowing options as a way to improve their productivity.

Article Details

How to Cite
Tibamanya, F. Y., Kuzilwa, J. A., & Mpeta, D. F. (2021). OPPORTUNITIES FOR SELF-FINANCING THE USE OF HIGH-YIELDING SUNFLOWER SEEDS AMONGST SMALLHOLDER FARMERS IN TANZANIA: PERCEPTIONS VS. REALITY OF LIQUIDITY LIMITATIONS. Acta Scientiarum Polonorum. Oeconomia, 20(1), 93–104. https://doi.org/10.22630/ASPE.2021.20.1.9

Afolami, A.C., Obayelu, E.A., Vaughan, I.I. (2015). Welfare impact of adoption of improved cassava varieties by rural households in South Western Nigeria. Agricultural and Food Economics, 3 (18), 1–17. (Crossref)

Amare, M., Solomon, A.S., Shiferaw, B. (2011). Welfare impacts of maize-pigeonpea intensification in Tanzania. (Crossref)

Agricultural Economics, 43 (1), 27–43.

Asfaw, S., Shiferaw, B., Simtowe, F., Lipper, L. (2012). Impact of modern agricultural technologies on smallholder welfare: evidence from Tanzania and Ethiopia. Food policy, 37, 283–295. (Crossref)

Bank of Tanzania (1997). Demand for Rural Financial Services in Tanzania, Working Paper at a Dissemination Workshop on Rural and Micro Financial Services, organized by the Bank of Tanzania, and held in Dar-es- Salaam, 9 –11 September.

Bravo-Ureta, B.E., Greene, W., Solís, D. (2012). Technical efficiency analysis correcting for biases from observed and unobserved variables: An application to a natural resource management project. Empirical Economics, 43 (1), 55–72. (Crossref)

Chibwana, C., Shively, G., Fisher, M., Jumbe, C. (2014).Measuring the impacts of Malawi’s farm input subsidy programme. African Journal of Agricultural and Resource Economics, 9 (2), 132–147.

Christen, R.P. and Anderson, J., (2013) Segmentation of Smallholder Households: Meeting the Range of Financial Needs in Agricultural Families. CAGP. Focus Note 85, Washington.

Diagne, A., Demont, M. (2007). Taking a new look at empirical models of adoption: Average treatment effect estimation of adoption rates and their determinants. Agricultural Economics, 37(2–3), 201–210. (Crossref)

Emerick, K., De Janvry, A., Sadoulet, E., Dar, H.M. (2016). Technological innovations downside risk, and the modernization of agriculture. American Economic Review, 106 (6), 1537–1561. (Crossref)

Gittinger, J.P. (1984). Economic Analysis of Agricultural Projects. Economic Development institute. Johns Hopkins University Press, Baltimore.

Hodgetts, R.M. (1980). Introduction to Business (second edition). Addison-Wesley Publishing Company, Miami, Florida.

Jayne, S.T., Mason, M.N., Burke, J.W., Ariga, J. (2018). Taking stock of Africa’s second-generation agricultural input subsidy programs. Food Policy, 75, 1–14, https:// doi.org/10.1016/j.foodpol.2018.01.003 (Crossref)

Kassie, M., Shiferaw, B., Muricho, G. (2011). Agricultural technology, crop income and poverty alleviation in Uganda. World Development, 39 (10), 1784–1795. (Crossref)

Khonje, M., Manda, J., Alene, A., Kassie, M. (2015). Analysis of Adoption and Impacts of Improved Maize Varieties in Eastern Zambia. World Development, 66, 695–706. (Crossref)

Kuzilwa, J.A. (2005). The Role of Credit for Small Business Success: A Study of the National Entrepreneurship Development Fund in Tanzania. Journal of Entrepreneurship, 14 (2), 131–161. (Crossref)

Kuzilwa, J.A., Fold, N., Henningsen, A., Larsen, M.N. (2017). Researching the potential and limitation of contract farming in sub-Saharan Africa. [In:] J.A. Kuzilwa, N. Fold, A. Henningsen, M.N. Larsen (Eds), Contract Farming and the Development of Smallholder Agricultural Businesses: Improving Markets and Value Chains in Tanzania. Routledge, London Mason, (Crossref)

N.M., Jayne, T.S., van de Walle, N. (2017). The political economy of fertilizer subsidy programs in Africa: Evidence from Zambia. American Journal of Agricultural Economics, 99 (3), 705–731. (Crossref)

Mpeta, D.F. (2015). Effects of Contract Farming on Production and Income of Sunflower Farmers in Kongwa District in Central Agricultural Zone in Tanzania. PhD Thesis. Mzumbe University [unpublished].

Nata, T. J., Mjelde, W.J., Boad, O.F. (2014). Household adoption of soil-improving practices and food insecurity in Ghana. Agriculture and Food Security, 3 (17), 1–12. (Crossref)

Schroeder, C., Onyango, K.O., Nar Bahadur, R., Jick, N., Parzies, H.K., Gemenet, D.C. (2013). Potentials of hybrid maize varieties for small-holder farmers in Kenya: a review based on SWOT analysis. African Journal of Food Agriculture, Nutrition and Development, 13 (2), 7562–7586. (Crossref)

Shiferaw, B. Kassie, M., Jaleta, M., Yirga, C. (2014). Adoption of improved wheat varieties and impacts on household food security in Ethiopia. Food Policy, 44, 272– 284. (Crossref)

Shiferaw, B., Kassie, M., Fisher, M. (2015). Market imperfections, access to information and technology adoption in Uganda: challenges of overcoming multiple constraints. Journal of Agricultural Economics, 46 (4), 475–480. (Crossref)

Takeshima, H., Liverpool-Tasie, L.S.O. (2015). Fertilizer subsidies, political influence and local food prices in Sub-Saharan Africa: evidence from Nigeria. Food Policy, 54, 11–24. (Crossref)

The Foundation for the Development Cooperation (1992). Banking with the Poor. Brisbane, Australia Tomecko, J. (1998). Optimizing the Use for Growing Enterprises in Africa. International Conference at the Kenya Institute of Management. Supporting Growing Businesses in Africa: a Challenge for the 21st Century, 17–20 March, Nairobi.

United Republic of Tanzania (2016a). Estimations of expenditures on the ministry of agriculture livestock and fisheries for the year 2016/2017. Technical report, Ministry of Agriculture Livestock and Fisheries (MALF), Dar es Salaam

United Republic of Tanzania (2016b). Sunflower sector development strategy 2016–2020. Ministry of Industry Trade and Investment. International Trade Centre.



Download data is not yet available.
Recommend Articles