Estimating NTBs Costs Incurred by Maize Farmers in Tanzania

Estimating NTBs costs of Maize Production and Marketing for Smallholder Farmers in Tanzania: A Case of Mbozi and Momba Districts in Mbeya region
IJPBCS
Estimating NTBs costs of Maize Production and
Marketing for Smallholder Farmers in Tanzania: A Case
of Mbozi and Momba Districts in Mbeya region
Petro Maziku
Department of Business Administration, College of Business Education- Dodoma Campus Box.2077, Dodoma, Tanzania
Email: pemaziku@yahoo.co.uk Mobile phone: +255 754 932 960; Tel: +255(0) 26-2321200; Fax: +255 (0) 26-
2322121
This paper estimated Non-Tariff Barriers (NTBs) costs of maize production and marketing of
smallholder famers in Mbozi and Momba districts of Mbeya region in Tanzania. A cross sectional
design survey was used in collecting data from farmers in the two districts using structured
questionnaires. Stratified and simple random sampling procedures were used in selecting a total
of 120 smallholder farmers. Descriptive measures were used in summarizing the NTBs costs
incurred by farmers. Results indicated that, estimated NTBs costs of farmers in Mbozi district
were higher when compared to those in Momba district. It also observed that, farmers in Mbozi
district paid a total of TZS. 73/Kg as NTBs costs to reach the Tunduma maize market while farmers
in Momba district paid TZS.48/Kg to reach the same maize market. The difference was explained
by spatiality being that Momba district is closer to Tunduma market. Based on these results, it
can be concluded that, effects of NTBs costs were higher for farmers of Mbozi district than those
of Momba district. It recommended that, protective food policy such as weighing bridges and road
blocks should be reduced in order to maintain reasonable high prices in rural and low prices in
urban deficit areas.
Key words: NTBs Costs, Maize smallholder farmers, Mbozi and Momba districts, Tanzania
INTRODUCTION
In the last few decades, maize has emerged as a crucial
staple crop to guarantee food security in Sub-Saharan
Africa countries (SSA) (Friedrich and Kassam, 2016). In
most of these countries, maize is produced mostly by
smallholder farmers for self-consumption and partly to be
sold on the domestic markets (IFPRI, 2013; FAO, 2015;
Friedrich and Kassam, 2016). However, the maize
production sector in these countries exhibits a very low
productivity and even with improved seeds; with the
average yield of about 1.1 ton per hectare (Jayne et al.,
2010; Minot, 2014). Similar to other SSA, maize production
estimates in Tanzania has been varying significant from
year to year depending on the weather condition prevailing
on those periods (NBS, 2008; FAO, 2013). For example,
maize production has shown fluctuation trends of positive
and negative growth rate for the period ranging from 2005
to 2014 as shown in Fig 1. Generally, maize production in
Tanzania has been averaged at 4.1 million metric tons
over the period ranging from 2005 to 2014 (Minot, 2010;
Indeximundi, 2015). The negative growth rate experienced
in maize production in the respective years can be linked
to the implemented NTBs policies and strategies by the
government in that year. For example in year 2008 and
2011 the government of Tanzania banned exports of
maize to neighboring countries viz. (Kenya, Zambia, DRC
and Malawi) as food security strategies. This situation
discouraged famers especially in the major producing
regions viz. (Mbeya, Iringa, Ruvuma, Rukwa and Katavi)
to allocate more productive resources on maize production
in the year 2009, making maize production to be less than
the previous year of 2008 (Fig 1).
Although maize is produced by farmers from all over the
country in Tanzania, about 40% of national production
International Journal of Plant Breeding and Crop Science
Vol. 4(2), pp. 261-267, July, 2017. © www.premierpublishers.org.ISSN: XXXX-XXXX
Case Study

Maziku P. 262
Figure 1: Trend of Maize Production in Tanzania for period of ten years (2005-2014)
Source: Indeximundi (2015) and FAOSTAT (2015)
comes only from few regions in the Southern Highlands
namely Mbeya, Songwe, Iringa, Njombe, Ruvuma and
Rukwa followed with Arusha and Manyara from the
Northern Highlands (Match Makers Associates, 2010;
Mkenda and Van Campenhout, 2011; FAO, 2012). Of the
total produced maize outputs, only 30% of maize
surpluses from these regions are reported to reach
markets both at the region level and main consumer
markets in big cities like Dares Salaam and Arusha
(Rasmussen, 2009; Minot, 2010; FAO, 2013). The low
percentage of maize supplied by farmers can also be
associated with high transaction costs been attributed to
NTBs which limits farmers to access markets in the urban
centers where they could secure high prices (World Bank,
2009; Gilson and Charalambides, 2011; Moctaret al.,
2015).
Moreover, maize farmers are also uncertain on the extent
of their markets because the Tanzania government has a
history of instituting export bans arbitrary on maize trade
depending on the maize harvest and expected level of
prices to protect consumers (World Bank, 2012). This
policy in most cases has led to negative impacts on maize
producers in the sense that, they cannot even export
maize grain to take advantages of high world prices and
different market opportunities created by different
economic integrations such as East Africa Community
(EAC) and Southern Africa Development Community
(SADC) (KI, 2011; Minot, 2013; Msumba and Costa,
2015). Findings by Gabagambi (2013) and Gilson and
Charalambides (2011) indicated that maize from Tanzania
was highly demanded in Kenya, Democratic Republic of
Congo (DRC), South Sudan and Somalia where consumer
prices were reported to be almost twice as much as local
market prices. Therefore, the arbitrary imposition of NTBs
on staple crops like maize by the government, would limit
market access of poor rural farmers to only village and
nearby town centers markets.
In addition, high transaction costs are also linked with
small households’ difficulty to access inputs and good
markets for their produce (Makhuraet al., 2001; Bwalya et
al., 2013). These transaction costs on the other hand,
could reduce the space over which food crops are
marketed and thus affecting household decisions such as
production diversification, consumption preferences and
investment (Minot, 2010; Mkenda and Van Campenhout,
2011). Similarly, Mbise et al. (2010) supported the
argument by claiming that, the size of transaction costs
related to NTBs could also affect the decision of farmers
on how much quantity to supply to the market. This was
revealed in the study of Bwalya et al. (2013) who found
that, in developing countries including Tanzania, small
holder farmers only contribute 20% to 30% of marketable
surplus. The low rate of supply and market participation
can be explained by high transaction costs faced by
smallholder farmers in accessing adequate and timely
markets as well as fair prices. In addition, market
participation for maize smallholder farmers in Tanzania
was highly influenced by multiple factors related to
production as well as market transaction costs (Mbise et
al. 2010; Sitko et al., 2014). Such market transaction costs,
apart from transport costs, may include NTBs such as
costs that are derived from road blocks, weighing bridges,
bribery, local government permits, custom procedures and
other factors. These costs are difficult to measure and
quantify; but they are measured indirectly from the action
of market actors (Trader and farmers). Thus, their
presence along maize supply chain often leads to farmers
being exploited by middlemen or brokers as all the costs
involved in moving maize to market are shifted to farmers
as compensation. This situation discourages farmers’
involvement in maize production and marketing (FAO,
2012; Haug and Hella, 2013; Baffeset al., 2015).
Moreover, high transfer costs may result in lower prices
received by a selling household and higher prices paid by
a buying household (Key et al., 2000; Karfakis and
Rapsomanikis, 2008). Furthermore, Key et al. (2000) have
alluded that high transaction costs is one of the key
reasons for smallholder farmers’ failure to participate in
markets and supply the right quantity of produce. This

Int. J. Plant Breed. Crop Sci. 263
Figure 2: Map showing Study Areas in Mbozi and Momba Districts in Tanzania
often leads to exploitation of farmers by middlemen or
brokers who discourage farmers’ involvement in maize
production and marketing (Rasmussen, 2009; Minot,
2010; FAO, 2012). Therefore, in order to link rural food
surplus production zones such as Mbozi and Momba
districts to major deficit urban areas and consumer
markets, a well-functioning domestic market is necessary.
This could only be possible if obstacles and costs created
by NTBs are clearly determined and understood by both
policy makers and government. This situation need a
scientific enquires of knowledge on the actual costs of
NTBs both on production and marketing as incurred by
farmers. It was against this background, that this study was
intended to estimate the actual costs of NTBs on
production and marketing of maize in Mbozi and Momba
districts. This outcome would contribute to the body of
knowledge on the existing literatures of NTB.
MATERIAL AND METHODS
Study area and sampling procedures
The study was conducted in the Southern Highlands Zone
of Tanzania covering two major surplus maize producing
districts, namely Mbozi and Momba in Mbeya region.
Mbozi and Momba districts were selected based on their
agricultural potential of being surplus-producing areas for
maize in Mbeya region. The two districts also depends
more on external markets (Malawi, Democratic Republic
Congo (DRC) and Zambia) for their surplus maize (Minot,
2010) and are also situated far from major domestic
markets such as Dares Salaam and Arusha. In this regard,
Tunduma international maize market at the border of
Tanzania and Zambia in Momba district was used as the
reference in estimating the costs of NTBs on maize
production between rural and urban markets.
A cross sectional design survey was employed in data
collection and the two-stage stratified sampling was used
in the selection of the sample size. In the first stage, wards
from the available list at the districts office were stratified
into two strata, first stratum was for wards close to the
district markets and the second for those located far from
the district markets. Then, four wards were randomly
selected, two from each district namely Igamba, Ihanda in
Mbozi district and Nkangamo and Chiwenzi from Momba
district. In the second stage, two villages from each ward
were randomly selected making a total of 8 villages. A total
of 120 small householder farmers were randomly selected
from the eight villages and interviewed. The collected data
were analyzed using descriptive statistical measures.
Measuring of NTBs Costs
According to Karfakis and Rapsomanikis (2008)
transaction costs have a large unobservable component
which includes costs related to NTBs. Therefore, their
measurement can only be indirectly revealed from the
behavior of potential agents (farmer or trader) in these
markets. Basing on this argument at the first instance,
market transaction costs of maize per ton were estimated
by summing up all costs incurred by farmers or traders in
transporting their maize merchandise from the point of
origin to the final destination (market). These costs were
further split into two groups: non-NTB transaction costs
(costs that are not NTB related such as vehicle hire and
maintenance, loading and offloading, and transporters’
allowances) and NTB transaction costs such as cost
derived from weighbridges, road blocks, customs
clearance, Council/ Municipal permits, police check point
paid as corruption. Because the focus of this study was
on estimating the actual cost of NTBs incurred by maize
farmers, then the estimation of NTBs cost was done by
adding all costs incurred by farmers in term of money and

Maziku P. 264
Table 1: Estimated Costs of various NTBs as Experienced by Maize Farmers in Mbozi and Momba Districts (in TZS/Kg)
From To Distance (Km) Road block Weigh bridge Custom Police
Council
permit
Total
Itepula village in Mbozi district Tunduma 60 10.38 26.30 12.71 18.56 5.00 72.90
Isanga village in Momba district Tunduma 40 6.95 17.60 8.52 12.44 3.35 48.84
Source: Author calculation from Field data, 2016; the exchange rate of USD/ TZS = 2,110.46
time wasted at various NTBs. However, amount of money
paid by traders or farmers for accommodation and meals
in a day were used as proxy for time wasted at the
weighing bridges, road blocks and custom points.
Amount of money paid to overcome road blocks and police
check point barriers as corruption (in mean value) were
also added to get the sum of cost incurred by a trader or
farmer at such NTBs. However, most of empirical finding
from previous studies (World Bank, 2009; Karugia et al.,
2009; Mkenda and Van Campenhout, 2011; Minot, 2014)
ascertain that, traders in most cases are more informed
about NTBs costs than their counterpart smallholder
farmers in rural areas. Therefore, information on NTBs
costs used in this study to large extent were taken from
traders, this is because costs of NTBs are felt first by
traders and then transferred to farmers in term of lower
prices (KI, 2011; Gabagambi, 2013; Moctar et al., 2015).
Moreover, to take note on the spatial effects of NTBs, the
distance from village markets to Tunduma maize market
was used in measuring the NTBs costs incurred by farmers
in Mbozi and Momba districts. This is because Tunduma
is located at the border of Tanzania and Zambia through
which maize from the two districts also cross the border to
Zambia, Malawi and Democratic Republic of Congo
(DRC).
RESULTS AND DISCUSSION
Estimated NTBs Costs for Smallholder Farmers in
Mbozi and Momba Districts
Results as presented in Table 1 indicate that, farmers in
the two districts experienced similar types of NTBs costs
in production and when accessing maize market at
Tunduma border and Mlowo centre. However, the size of
NTBs costs were higher for farmers in Mbozi district as
compared to those in Momba district whereby a farmer in
Mbozi district has to pay a total of TZS. 73 per kilogram of
maize to reach the maize market at Tunduma town. While
in Momba district farmers pay only TZS.48 per kilogram to
reach the market (Table 1). It was also found that, farmers
in the two districts paid the highest NTBs costs when
clearing weighing bridges obstacles which were amounted
to TZS.26. 30 and 17.60 per kilogram for Mbozi and
Momba districts respectively (Table 1). The higher value of
NTBs costs in Mbozi district can be attributed to poor rural
roads and more NTBs created by long distance to reach
the Tunduma market (about 60 km) which in turn translate
into high transfer costs. This requires farmers or traders
who transporting maize from Itepula or Shiwinga villages
in Mbozi district to Tunduma market to pass through five
road blocks. These road blocks will include Igamba,
Mlowo, Vwawa, Ihanda ,Mpemba road blocks and one
weighing bridge at Mpemba village. While a farmer or
trader from Isanga village in Momba district has to pass
only two road blocks namely Nkangamo and Tunduma and
one weighing bridges at Nkangamo village. These findings
concur with those of Karugia et al. (2009); KI (2011) and
Gabagambi (2013) who found similar results in Tanzania,
Kenya and Uganda for maize farmers.
Moreover, among the costs incurred by farmers in clearing
NTBs obstacles, more money were paid at weighing
bridges, police check points, custom and road blocks for
both two districts. This is because weighing bridges, police
check points, custom and road blocks were reported to be
time consuming and staffed by unfriendly police officers or
council officers whereby transporters or traders were
bribed them in order to pass the barrier easily (Coulson,
2010;Porteous, 2012; Haug and Hella, 2013). These
findings are in line with those of Karugia et al. (2009) and
KI (2011) who found that, money paid by maize traders
and transporters as corruption were high at weighing
bridges and police check points in Tanzania and Kenya.
According to Karugia et al. (2009), the percentages of
money paid by traders and transporters at weighing
bridges in Tanzania and Kenya were estimated at 0.97 and
2.41% respectively. These results further imply that,
farmers especially in the rural areas will continue to get the
lowest prices from traders if no extra efforts would be made
by the government on reducing or removal these obstacles
created by various NTBs on the staple food trade like
maize. This is because most of smallholder farmers in rural
areas in Developing countries like Tanzania are said to be
price takers and therefore compensates traders from the
transaction costs related to NTBs already incurred by
traders (KI, 2011; FAO, 2013; Minot, 2014). Also, the
findings coincident with those of Magrinia et al. (2014) in
Africa that the effects of NTBs various with the size and
distance of the country from the importing country.
Prices Received by Maize Farmers With and Without
NTBs in Mbozi and Momba Districts
Table 2 presents the actual prices that farmers could
receive in the absence of NTBs in the two districts.
Findings indicated that, farmers in the two districts could
receive higher prices if the government will not impose
NTBs on maize trade. This is because the lower prices
with NTBs cost received by smallholder farmers in the two

Table 2: Prices received by Farmers with and without NTBs in Mbozi and Momba Districts
District Price without NTBs Price with NTBs NTBs cost %NTBs of Farm gate
price
Decrease in price
due to NTBs
Mbozi 362 290 72.71 25% 72
Momba 369 320 48.84 17% 49
Dar es Salaam 528 550 22.00 04% 22
Source: Author calculation from Field data, 2016
districts denotes the higher transaction costs as attributed
by NTBs faced by traders in moving maize to urban
markets. Moreover, the higher price without NTBs can also
be explained by the tendency of traders to shift the extra
NTBs costs incurred in moving maize from the village to
district markets to famers in term of lower prices. These
arguments support findings by KI (2011) and Gabagambi
(2013) in their studies in Tanzania on trade barriers to
smallholder farmer that, the incidences of trade barriers
like NTBs falls on farmers’ shoulder and not on final
consumers as assumed to be by the policy. Thus, an
increase in the application of NTBs strategies will imply
more reduction in farmers’ income through the lowered
farm-gate prices and hence the poverty differences
between rural and urban areas will continue to expand.
More interesting, it was found that, the differences in price
without NTBs between the two districts becomes very
small (about TZS. 07 per Kg) compared to that with NTBs
(about TZS.30 per kg). This implies that, the spatial price
differences to some extent were created by the imposed
NTBs in the two districts (Table 2). These findings were in
line with those of World Bank (2009) and Minot (2014) that,
price difference between two spatial markets under market
failure is created by transaction costs related to NTBs
policies and strategies. Also, the findings are consistence
to the transaction theory as explained by Law of One Price
(LOP) that, the differences in prices between two markets
under the market failure are explained by the size of
transaction costs involve in moving a product between
them.
Results as presented in Table 2 further indicated that, the
contribution of NTBs costs on producer prices were very
low (only 4%) between district and main consumer
markets i.e. Tunduma and Dar es Salaam consumer
markets. While that of rural to district markets (Itepula and
Isanga to Tunduma market) was 25% and 17% in Mbozi
and Momba distinct respectively. This can be explained by
the facts that, Tunduma and Dar es Salaam markets are
well integrated and connected with a good road networks
which allow changes in price and information to be
transmitted quickly between the two markets. These
findings concur with those of FAO (2013) in Tanzania that,
price margins between Dares Salaam and Arusha were
lower in the period of export ban in year 2011 because the
two markets were connected with a well road networks and
more integrated.
Moreover, the low prices for smallholder farmers in the
rural areas denotes the higher transaction costs as
attributed by NTBs and poor roads faced by traders in
moving maize to urban markets. This is because traders in
most cases has to ensure that the extra costs incurred in
transporting maize from village markets to district markets
are shifted to farmers in forms of lower prices(Gabagambi,
2013; Minot, 2014). Furthermore, these findings also
coincide with those of Karugia et al. (2009) and Porteous
(2012) on the effects of NTBs on maize trade in East
African Countries (EAC). Their findings indicated that, the
cost of NTBs applied on maize imported into Tanzania
were about TZS 187 per ton per kilometer.
CONCLUSIONS AND POLICY IMPLICATION
This study estimated the costs of NTBs on maize
production and marketing among smallholder farmers in
Mbozi and Momba districts of Mbeya in Tanzania.
Findings from this study indicated that, the size of NTBs
costs experienced by farmers differed between farmers in
the two districts. Costs of NTBs were higher for farmers in
Mbozi district as compared to those in Momba district.
These findings carry a policy implication that,
implementation of NTBs strategies by governments would
harm more farmers in the rural areas than those who live
close to the urban markets. Therefore, in order to
encourage farmers to allocate more resource on maize
production and access markets especially in surplus
areas, the study recommend removal of destructive NTBs
strategies such as weighing bridges, road blocks and
police check points in the study area. This will help the
government to achieve its goals of creating high prices in
surplus districts and low consumer prices in deficit urban
centers. Additionally, improvement of physical
infrastructures such as rural feeder roads and highway
which links smallholder farmers with major markets could
reduce much of the transaction costs attributed to NTBs.
This could contribute much to government efforts of
reducing food insecurity and poverty among rural
populations.
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Accepted 8 August 2017
Citation: Maziku P. (2017). Estimating NTBs costs of
Maize Production and Marketing for Smallholder Farmers
in Tanzania: A Case of Mbozi and Momba Districts in
Mbeya region. International Journal of Plant Breeding and
Crop Science 4(2): 261-267.
Copyright: © 2017 Maziku Petro. This is an open-access
article distributed under the terms of the Creative
Commons Attribution License, which permits unrestricted
use, distribution, and reproduction in any medium,
provided the original author and source are cited.

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