Analysis of governance of global value chain for organic ginger export market from Same and Lushoto Districts in Tanzania

Summary

The study examined the market with particular focus on North-Eastern Tanzania organic ginger farmers to sell into export organic market irrespective of existed supply that meet export requirements and high demand in export markets. Specific objectives were to: map the ginger value chain in North-Eastern Tanzania; to assess transaction costs that deter entry and participation of organic ginger farmers to export market and to assess the institutions influence on transaction costs and the market failure. Data collection was preceded by a preliminary survey that aimed to understand the industry and develop the value chain map. Data were obtained from organic ginger farmers in Mnazi and Mamba wards; from Non-Governmental Organizations namely Tanzania Organic Agriculture Movement and FAIDA Market Link and from Local Government Authorities. Interviews and observations were conducted between September 2011 and May 2012 using checklist and questionnaires. Analyses were done using SPSS version 16 where frequencies and estimates of logistic regression were computed. The findings were: ginger was sold in conversional and organic ginger markets that had different requirements. Part organic ginger was also sold as conventional and as non-certified organic in other markets; asset specificity, opportunism and frequency were significant in affecting framers’ participation. It also showed size of land owned and proximity to market to have negative relation to farmers’ participation. Contracts and vertical integrations were main governance structures with trust as main binding mechanism. Efforts were done by different organisations to reduce transaction costs. Redefining roles of the farmers associations and establishing new models of selling would help to improve the performance of the chain.