Effectiveness of collective action in reducing transaction cost for smallholder paddy farmers in Tanzania Online publication date: Tue, 21-Apr-2020
by Tosin K. Gbadegesin; Labode Popoola
African J. of Economic and Sustainable Development (AJESD), Vol. 7, No. 4, 2020
Abstract: The majority of smallholder farmers (SHF) in developing countries are located in remote areas with poor infrastructure and they often fail to participate in markets due to the high-transaction costs involved. Collective Action (CA) has become an important strategy for SHF in developing countries to remain competitive in rapidly changing markets and has been tagged as a popular means of reducing transaction costs. This study was carried out to show the multifaceted problems of CA and to access the effectiveness of CA in reducing transaction costs for smallholder paddy farmers. The target populations for the study were members of Msalala Paddy Farmers Company (MPAFAC) belonging to five different wards, 35 groups, and different villages. It was found that the total amount spent by smallholder farmers on a transaction before joining MPAFAC was 205 USD by 45.7% of the respondent while 9.2% spent below 100 USD after joining MPAFAC.
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