Abstract:
Smallholder rice farmers purchasing inputs through irrigation scheme cooperative is vital since
collective purchasing of production inputs reduces unit input cost and economizes transaction
cost. This study was conducted to analyze factors underlying farmer's decision making level on
choosing (contractual choice) whether to purchase production inputs through the cooperative or
other input providers. It also ascertains whether it makes differences in production cost for
farmers purchasing inputs through cooperative and those who do not. Data were collected from
200 farmers that are members of rice specialized irrigation schemes in Morogoro and Coast
regions. Descriptive statistics and choice model (logit model) were used for data analysis.
Results revealed that, distance from the cooperative to the nearest town, number of organizations
in which a farmer is a member, extension services, input quality satisfaction and availability of
cash and credit as payment mode at the irrigation scheme cooperative are factors influencing
smallholder irrigated rice farmer's choice of production inputs provider. It was shown further
that, farmers purchasing inputs through irrigation scheme cooperative have lower production
costs than farmers purchasing from other input providers. It is therefore plausible to encourage
farmers to purchase inputs through irrigation scheme cooperative of which will contribute to
reduction of their production costs. This can be enhanced through ensuring that, inputs provided
are of satisfactory quality and both cash and credit payment methods are used. In encouraging
farmers to purchase inputs through the irrigation scheme cooperative, it is important to provide
price incentive in the purchase of inputs. |
