Coordination and Structure of Agri-Food Value Chains: Analysis of Banana Value Chain Strands in Tanzania

Abstract

This (2014) study uses the value chain approach to analyze the coordination and structure of the banana value chain in Rombo district, Tanzania. Its objective is to provide information to decision makers for improving linkages within the value chain and between value chain actors and to help farmers receive a relatively larger share of the price paid by consumers. The study maps banana value chain actors, and collects the cross-sectional data from 209 farmers, wholesalers, retailers, brokers and processors.The marketing margin (the difference between the prices paid by consumers and prices received by farmers) was used as an indicator of efficiency of marketing the bananas along the banana value chain. The overall result showed that, the absence of contracts led to vertical coordination between actors of banana value chain to be weak. This loose coordination prevented the actors from fully benefiting from the economic incentives of the value chain. As a result farmers were not able to sufficiently supply bananas to processors and traders. Lack of banana farmers’ group associations resulted to poor functioning of horizontal coordination of the banana value chain. Prices and margins obtained by different actors along the chain varied significantly, with wholesalers capturing the higher mean price difference.