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International Journal of Agricultural Marketing

IJAM

Vol. 2(3), pp. 045-056, June, 2015. www.premierpublishers.org. ISSN: 2167-0470

The role of middlemen in fresh tomato supply chain in


Kilolo district, Tanzania
1*

Leonada Mwagike and 2Ntengua Mdoe

Department of Procurement and Logistics Management, Mzumbe University School of Business, P.O. Box 6, Morogoro
Tanzania.
Department of Agricultural Economics and Agribusiness, Sokoine University of Agriculture, P.O. Box 3151, MorogoroTanzania
The paper aimed to analyze the role of middlemen in linking smallholder tomato farmers with
Dar-es-salaam markets, Tanzania. Semi-structured questionnaires were administered to 133
small vegetable farmers and 109 traders. Data analysis was done using descriptive statistics
such as frequencies, percentage, chi-square and one way analysis of variance. The study
revealed that majority (58%) of smallholder tomato farmers sold their produce to middlemen due
to being geographical separated from the markets, poor local road network and poor access to
market information. This study concluded that the use of middlemen to sell tomato produce
cannot be avoided unless smallholder farmers are linked with urban markets. In order to
enhance farmers access to markets, it is recommended that the government should strive to
improve feeder roads. Improvement in feeder roads is likely to bring about large welfare gains
in terms of large volumes of tomatoes traded and can make assembling of tomatoes easier and
less costly for traders.
Key words: Kilolo, tomato supply chain, Tanzania, smallholder farmers, middlemen
INTRODUCTION
Vegetable subsector in Tanzania has the potential to
advance Tanzanias objectives of economic growth and
poverty reduction (Amani, 2005). This is because the
subsector is largely dominated by smallholder farmers
and the dominance of smallholder farmers in the
subsector offers an opportunity for making an impact on
Tanzanias poverty reduction efforts (Kawa and Kaitira,
2007). Besides being dominated by smallholder farmers,
the potential of the subsector to alleviate poverty
particularly income poverty stems from the high demand
for vegetables in urban markets (Weinberger and
Lumpkin, 2007). Most of the demand for vegetables in
Tanzania is in urban areas like Dar es Salaam. Like
producers of vegetables elsewhere in Tanzania, tomato
farmers in Kilolo District depend on Dar es Salaam as the
major market for their tomatoes. It is estimated that Dar
es Salaam absorbs about 60% of the tomatoes from

Iringa Region (URT, 2012). This proportion is likely to


increase because the demand for vegetable crops in
urban areas has the potential to increase due to increase
in urban population and incomes of urban dwellers.
However, there are critical issues that constrain full
exploitation of the urban markets for tomatoes including
scattered nature of smallholder farmers in the study area,
small quantities of tomatoes produced by individual
smallholder farmer, long distances between the tomato
supply demand areas and perishability of tomatoes and
lack of storage facilities.
*Corressponding Author: Leonada Mwagike, Department of
Procurement and Logistics Management, Mzumbe University
School of Business, P.O. Box 6, Morogoro Tanzania. Tel:+255 23
2604380-4, Telefax:+255 23 2604382, Mobile:+255 784 607 322

The role of middlemen in fresh tomato supply chain in Kilolo district, Tanzania

Mwagike and Mdoe

046

The scattered nature of the smallholder tomato farmers


and the long distance between the tomato producing
villages to the major tomato consumption centers appear
to be the major constraints for tomato farmers and
traders in the study area. Besides costs of transporting
tomatoes to major consumption centers like Dar es
Salaam, tomatoes in the study area are produced on
small farms scattered over a large area. This situation is
exacerbated by poor road network that links the tomato
farms to collection centers and markets in the study area,
making assembling of tomatoes difficult and costly for
traders. Most roads in the study area other than a few
well maintained roads including the Dar es Salaam Zambia highway are in poor condition. Farmers who are
far from the good roads are marginalized not only
because they have difficulty in reaching the tomato
markets, but more so because tomato traders avoid
farms in areas off the good roads where transport costs
are too high (Eskola, 2005). Difficulties faced by farmers
in reaching markets contribute to post-harvest losses.
According to MMA (2008) and MUVI-SIDO (2009),
approximately 30 - 40% of the tomatoes are lost due to
poor post-harvest handling including transportation. The
long distance from the tomato farmers to the urban
markets like Dar es Salaam makes smallholder tomato
farmers who cannot sell their tomatoes at nearby local
markets to depend on middlemen who buy tomatoes for
the urban markets. The middleman trader exercises the
essential entrepreneurial functions of exploring and
creating market exchange opportunities and bears the
risk entailed in this task. It operates in two markets
helping the smallholder tomato farmers access
customers and the customers get the products.
Banson et al., (2014) found that in many African
countries, cultivation and production of crops is produced
by smallholder farms with limited mechanization and
capacity, leading to high transaction cost and poor yields.
In addition the research revealed that fragmented
markets, price controls, and poor infrastructure also
hamper production and development.
Inefficient
agricultural marketing system has been observed to have
major drawbacks in the development of the agricultural
sector (Mdoe et al., 2001). Vegetable marketing system
is prone to various sources of inefficiencies. Farmers in
vegetable producing areas are unable to attract
competitive buyers. Many of the farms are located in
relatively isolated areas, a considerable distance from
improved roads making access to competitive markets
difficult and costly (Massawe, 2007). Lack of bargaining
power along with various credit bound relationships with
the buyers has lead to farmers being exploited during
transaction.
Eskola, (2005); deputter, (2007) reveals

that lack of market information and the weak legal


framework lead to difficulties in negotiating trade
agreements and enforcing the existing contracts.
Previous studies on vegetable supply chain found that
smallholder farmers sell their produce to various
middlemen (assemblers, wholesalers and retailers) due
to high transaction costs. Lambert and cooper (2000)
and Robinson and Kolavalli (2010).
MUVI (2009)
conducted a study on tomato value chain analysis in
Iringa region. The study found that smallholder farmers
relied on middlemen to sell their produce due to high
transaction costs such as transportation and imperfect
market information. Suryavanshi et al., (2006) reveals
that 80% of the vegetable was sold through middlemen
due to high transportation costs incurred in transporting
produce from rural areas to urban markets. Eskola (2005)
found that most farmers sold their agricultural products
either to the local traders who are the residents of the
villages who in turn sold the produce to other buyer
coming from Dar es Salaam. Local traders act as
facilitators between many local producers and a few Dar
es Salaam buyers. Thus middlemen are needed in
several parts of the supply chain to transfer information of
the quantities and prices supplied and demanded, and
acting as guarantors of the two parties. Gabre-Madhin
(2001) found that institutions of middlemen in the
Ethiopian grain market play an important role in trade
facilitation in terms of market information dissemination
between producers and other buyers.
A number of studies in vegetable supply chains have
mainly documented that smallholder farmers incur high
transactions costs linked to search for buyers, market
information and negotiation and other costs associated
with marketing their vegetable produce (Lamber and
Cooper, 2000; Eskola, 2005; Eaton et al., 2007;
Robinson and Kolavalli,2010). However, there is limited
information on analytical dimensions on how farmers
overcome transaction costs associated with marketing of
their produce. This paper looked at tomato supply chain,
actors and their function, the role of middlemen in linking
tomato producers and traders in Dar-es-salaam and
challenges facing chain actors. It is very crucial that both
policy makers and development practitioners understand
the status of vegetable supply chain if small scale farming
is to be profitable business at a local level, national level
and for future inclusion in global supply chains.

METHODOLOGY
The study was conducted in Kilolo District in Iringa

The role of middlemen in fresh tomato supply chain in Kilolo district, Tanzania

Int. J. Agric. Mark.

047

Figure 1. Map showing Iringa Region, Tanzania

Region (see Fig. 1).


The main economic activity in
Iringa Region is agriculture. It is estimated that more
than 80% of its population depends on agriculture.
According to Putheti, (2015), a variety of crops are found
in the Region. Maize is the main staple food. Horticultural
crops comprising of onions, tomatoes, fruits and cabbage
are grown commercially mainly in Iringa Rural and Kilolo
districts. Kilolo District was selected for the study due to
its potential for tomato production.
Tomato is an
important cash-earning commodity for Iringa region. It
can be estimated that 60 000 farmers are involved in
tomato production in the region. According to regional
agricultural statistics, Kilolo District accounted for 51% of
the 107 000 MT of tomatoes produced in the 2007/08
season while Iringa Rural accounted for 44% (URT,
2012). Tomato farmers in Kilolo District are small scale
farmers who cultivate an average of 0.25-0.50 acres of
land per household.

A multistage sampling technique was used to select


sample areas. The first stage involved selection of one
district from Iringa Region. At this stage Kilolo District
was selected from the four districts in the region on the
basis of volume of tomato production. According to the
Kilolo District Agricultural officer, Kilolo District was the
leading District in terms of planted area and volume of
tomatoes produced. It accounted for 51% and 69.3% of
area planted with tomatoes and volume of tomatoes
produced in the region during the 2007/2008 season
(URT, 2012).
In the second stage, one division
(Mazombe) was selected out of three divisions in Kilolo
District on the basis of volume of tomatoes produced.
According to the Kilolo District Agricultural Officer,
Mazombe Division was the leading producer of tomatoes
among the three divisions. However, the researcher
failed to get up to date data on volumes of tomato by
division. The third stage involved selection of sample

The role of middlemen in fresh tomato supply chain in Kilolo district, Tanzania

Mwagike and Mdoe

048

Table 1. Sample size for the study


Village

No of tomato household

Sample
size

Sample size as % of the tomatoes


growing households

Madizini

840

44

Masukanzi
Lugalo

860
890

44
45

5
5

Total

2 590

133

Source: Village register book (2010)

villages from Mazombe Division. The selection criteria of


the study villages were; to cover areas that represent
typical tomato farming in the Division while the last stage
involved selection of tomato farming households from the
sample villages. With the assistance of the division
officer, random sampling technique was employed to
simple random sampling technique was employed to
select a sample of tomato producing households from the
lists of tomato growers in Madizini, Masukanzi and
Lugalo villages. The sampling frame was the village
register book. The total sample size comprised of 133
households. The sample size for farmers was obtained
by using the following formula n/N5% (Sudman, 1976).
Table 1 shows the distribution of the sample households
by village. A lottery method was employed to select
respondents from the sampling frame. The researcher
wrote names of the tomato farmers in pieces of papers,
the pieces of papers were put in a box, they were mixed
them up and then the researcher picked one piece of the
paper randomly. The procedure was repeated until the
researcher got the sample required.
Two wholesale markets namely Tanzania Social Action
Fund (TASAF) markets located in Ilula ward and Mlamke
markets located in Lugalo ward were purposely selected
out of three markets in the division. These markets are
the two main tomato collection points in Mazombe
Division where farmers/assemblers bulk tomatoes waiting
for traders from urban areas especially Dar es Salaam.
Snowball sampling (from one actor, the other actors were
contacted) to identify traders for interview who came to
the markets (TASAF and Mlamke) to purchase tomatoes.
A total of 109 traders comprising 36 assemblers 40
wholesalers and 33 retailers were selected. Out of 109
traders, 35 were traders from Dar es Salaam. According
to Bailey (1994) regardless of the population size, a
sample or sub-sample of 30 cases is the bare minimum
for studies in which statistical data analysis is to be done.
Both primary and secondary information were collected
for the study. Data from the sample farmers and traders

select three villages namely Madizini, Masukanzi and


Lugalo out of the 12 villages in Ilula and Lugalo wards.
The target population included all households involved in
tomato production in the sampled villages. With the
assistance of the Village Executive Officers (VEO) a
were collected using the pre-tested questionnaire. The
questionnaire was administered to respondents through
face-to-face
interviews.
Besides
questionnaire,
discussions guided by checklists were held separately
with groups of farmers, assemblers, wholesalers.
Secondary information for the study was obtained from
published and unpublished reports from different sources
such as Iringa Regional Agricultural Office, District
Agricultural and Livestock Development Office (DALDO)
in Kilolo District, Sokoine National Agricultural Library
(SNAL) and web sites.
Both qualitative and quantitative methods were used in
data analysis. Below is a description of the analyses
carried to achieve the objective of the study. Qualitative
data analysis was used to analyze the challenges actors
faced in marketing their produce. In analyzing the
challenges in the study area, the researcher organized
the information according to emerging themes and subthemes. The recorded dialogue was broken into smallest
units of information and theme (Corbin and Strauss,
2007). Content analysis was used to analyze qualitative
information obtained from focus group discussions. In
groups, the following questions were asked: (i) to whom
did you sell your produce? (ii)Where did you sell your
produce? (iii)Why did you prefer to sell to this particular
buyer?(IV)Do you always sell all the vegetables
produced? (V)What were the problems of vegetable
marketing in the area? (VI) How do you preserve
vegetables produced?
The structure of the fresh tomato supply chain was
analyzed using a supply chain analysis (SCA). The SCA
examines all the actors involved in the chain, the linkages
between them, and the activities in each link (Gereffi et
Int. J. Agric. Mark.
049

The role of middlemen in fresh tomato supply chain in Kilolo district, Tanzania

Consumers

Tomato supply
chain functions

Retailers
Retailing
Consumption

Processing and
wholesaling

Wholesalers

Assemblers
Bulking
Packaging
Transportation

Tomato Farmers

Production

Input supply
Input suppliers and service providers

Figure 2. Structure of the fresh tomato supply chain in Kilolo District

al., 2005 and Putheti, 2015). In this study the SCA


examined two key actors in the fresh tomato supply chain
-farmers and traders who were involved in production and
marketing of tomatoes, the linkages between them and
the activities within each link. Distribution of tomatoes
was traced from farmers to the final consumers. The flow
chart was used to trace the fresh tomato supply chain
used by farmers and traders to market their produce.
The percentage of tomatoes sold to different chain actors
was analyzed using frequency counts and percentages.
Actors share of the price paid by consumers along the
longest fresh tomato supply chain was calculated by
dividing the farm gate price to the subsequent price levels
along the chain.

AS=Actors share
AP=Actor price
Pi= Price of tomato at market level i in Tshs/per tenga.

Mathematically actors share (AS) was calculated as


follows,
AS= AP/Pi,
Where
Mwagike and Mdoe
050

Input supply and service provision

RESULTS AND DISCUSSION


Figure 2 shows the fresh tomato supply chain map
encompassing the key actors and the functions they
performed. The functions performed include input supply,
tomato production, assembling, sorting, packaging,
transportation, wholesaling, processing and retailing of
tomatoes. Details of these functions are provided in
subsequent sections below.

At the base of Figure 2 input suppliers and service


providers played the role of supply chain supporters.

The role of middlemen in fresh tomato supply chain in Kilolo district, Tanzania

Table 2. Distribution of farmers by land area under tomato production (acres) during 2010 tomato growing season

Madizini

Masukanzi

Lugalo

Whole sample

Minimum
Maximum

0.25
1

0.25
0.50

0.25
2

0.25
2

Mean

0.28

0.27

0.35

0.30

SD

0.13

0.07

0.20

0.15

Table 3. Tomato varieties planted by sampled farmers in 2010 tomato growing season

Seed
variety
Tanya
Roma

Village
Madizini
No
19
25

%
4.3
18.8

Masukanzi
No
%
14
5.3
30
22.6

Lugalo
No
7
38

%
5.3
8.6

Total
No
40
93

%
30.1
69.9

2=8.169 **, df=1, P<0.05, *1US$ Dollar= 1,650Tanzanian shillings

They supplied seeds, fertilizers and pesticides to farmers.


They sold these inputs but also provided information
concerning their use. During focus group discussions
farmers reported major constraints regarding the quality
of seeds they buy. They reported that in some cases the
quality of seeds sold by input suppliers was not poor.
Some of the input suppliers sold seeds with expired dates
of use.
Tomato Production
Tomato production in Kilolo District was dominated by
smallholder producers. Table 2 presents minimum and
maximum land area under tomato production during the
first main 2010 tomato growing season across villages.
One way Analysis of Variance (ANOVA) test was
conducted to determine whether there is significant
difference in the land area under tomato production for
the farmers in three sample villages. The ANOVA results
in Table 2 show that the variation in mean land area
under tomato production during the 2010 tomato growing
season for the farmers in the three villages was
statistically significant (p <0.05) for the mean pairs
compared.
Tomato producers in Kilolo District have the opportunity
of producing tomatoes three times per year. The first
opportunity is during the main season in which harvesting
takes place between April and June. The second
opportunity is between July and September while the
third opportunity is production of irrigated tomatoes which
are planted during the dry season between July and
October and harvested between November and March.
Smallholder tomato farmers in the study area were found
to grow two major varieties of tomatoes depending on the

type of seed available during the planting season as well


as the cost of the different tomato seed varieties. Table 3
shows the proportion of sampled farmers who grew the
two tomato varieties during the 2010 tomato growing
season. Majority (69.9%) of the sampled farmers planted
Roma tomato variety. The remaining 30.1% of the
sampled farmers planted Tanya tomato variety. The
findings in Table 3 suggest that Roma variety was the
most popular tomato variety grown in the study area.
Chi-square test (2=8.169, p<0.019) revealed that there
was significant difference in the proportion of farmers
who grew the two tomato varieties in the 2010 tomato
growing season.
Apart from tomato seeds, successful production of
tomatoes requires other purchased inputs such as
fertilizer, pesticides and hired labor. Tables 4 and 5
present the price and costs of these inputs during the
2010 tomato growing season. On average a farmer
incurred Tshs 19 969 per packet of 100 gram of seeds
(=12.10 USD dollars, )Tshs 60 504 per bag of 50 kg of
urea fertilizer (36.66 USD dollars) and Tshs 7 000 (4.24
USD dollars) per liter of pesticides. Producers got
supplies of seeds, fertilizers, pesticides and fungicides
from inputs stockiest who are available normally within 10
kms radius. The stockiest do also provide information on
the best practice in tomato seedbed management.
Table 4 shows the mean variation of the labor charge
paid by smallholder tomato farmers across the three
villages. The results of one way ANOVA test conducted
to compare the wages paid to hired labor across the
three sample villages show that the variation in mean
wage paid to hired labor by farmers in the three sample
villages during the 2010 tomato growing season was
Int. J. Agric. Mark.
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The role of middlemen in fresh tomato supply chain in Kilolo district, Tanzania

Table 4. Cost of tomato seeds and fertilizer paid by sampled farmers in 2010 tomato growing season

Madizini
Masukanzi
Lugalo

N
44
44
45

Seeds (Tshs pkt 100 gram)


Min
Max
Mean
20 000
20 000
20 000
15 000
30 000
19 800
15 000
30 000
20 000

SD
0 000
2 771
1 894

Fertilizer Tshs 50kg


Min
Max
Mean
45 000 68 000 60 200
55 000 68 000 60 500
45 000 70 000 59 700

SD
4 317
3 940
4 606

Table 5. Cost of pesticides and hired labour paid by sample farmers in 2010 tomato growing season

Village
Madizini
Masukanzi
Lugalo
F = 7.808***

N
44
44
45

Pesticides Tshs per litre


Min
Max
Mean
7 000
7 000
7 000
7 000
7 000
7 000
7 000
7 000
7 000

SD
000
000
000

Labor charge
Min
Max
15 000
80 000
20 000
85 000
10 000
140 000

Mean
38 600
43 300
56 300

SD
17 399
18 009
26 955

***Significant at 1%

Table 6. Volume of tomatoes harvested per household during April-June 2010 tomato growing season (In tenga)

Minimum
Maximum
Mean

Madizini
50
120
87

Masukanzi
45
110
85

Lugalo
70
120
94

Whole sample
50
120
88

SD

18.68

15.599

13.72

16.50

F = 3.619**, ** Significant at p <0.05, 1 tenga in Kiswahili=1bucket =20 kg

statistically significant (p<0.01) for the mean pairs


compared (Table 5). The reason for the difference could
be due to difference in farm size and the activity for which
labor was hired such as land preparation, planting, spray
of pesticides, weeding and harvesting. According to
MUVI (2009) about 95% of the farmers manage their
plots using household (family) labor or with the help of
casual workers. It is common for farmers to employ
casual workers in times of heavy workloads such as land
cultivation, stocking, weeding and harvesting.
Harvesting of tomatoes in the study area takes place in
piece meals as they mature and ripe. The main tomato
harvesting season is April and June. The second season
tomatoes are harvested between July and September
while the dry season irrigated tomatoes are harvested
between November and March. One way ANOVA test
was conducted to compare the volume of tomatoes
harvested by farmers in the three sample villages. The
ANOVA results in Table 6 show that the variation in the
mean volume of tomatoes harvested per farmer during
April-June 2010 tomato growing season in the three
sample villages was statistically significant (p<0.05) for
the mean pairs compared. The difference in the volume
of tomatoes harvested across the three sample villages
Mwagike and Mdoe
052

was largely due to differences in farm size but may also


be attributed by differences in the rate of application of
inputs such as fertilizer and pesticides which influence
total output.
Harvested tomatoes are normally spread in an open
space at the markets or put in tengas to maintain
freshness while waiting for the buyers who have placed
orders. The tomatoes can be stored in the open space for
up to two weeks without rotting. However, this depends
on weather conditions and handling practices after
harvest. Sorting of tomatoes before selling them is a
common practice among farmers in the study area.
Farmers sort out tomatoes that have deteriorated in
quality and leave the good ones for the market. If the
produce is sold at the farm gate the traders do re-grade
according to market needs before transporting them to
the distant urban markets. In most cases farmers use
carts (mkokoteni in kiswahili) pulled by animals for
ferrying the harvested tomatoes to collection centers
where traders and farmers interact. During focus group
discussions it was revealed that there were high levels of
post-harvest losses (about 40 - 50%) of tomatoes in the
course of loading, unloading and transportation.

The role of middlemen in fresh tomato supply chain in Kilolo district, Tanzania

Marketing channels and the role of middlemen in the


tomato supply chain
Figure 2 above further illustrates the various marketing
channels through which farmers in the study area sell
their fresh tomatoes. There are five market channels
through which farmers sell their fresh tomatoes.
According to Figure 2 the most important channel
comprises of farmers who sale through assemblers.
Approximately 58% of the farmers sold their tomatoes
through this channel during the April-June 2010 tomato
growing season. This is the longest channel in the fresh
tomatoes supply chain in the study area with more
intermediaries than the other market channels.
Assemblers played a very crucial role in the fresh tomato
supply chain since they had several close links with many
local producers and wholesalers who came from different
parts of the country to purchase tomatoes. Farmers
wanted to save transport cost, loading and unloading
costs thats why they sold their tomatoes to assemblers
at farm gate. The study found that on average farmers
sold about 65 tengas out of 88 tengas harvested. This
indicates that losses were about 20 tengas (26%) of the
tomatoes harvested. Average selling price was Tshs 7
515 per tenga of tomatoes. This finding supports finding
by Suryavanshi et al. (2006) who found that 80% of the
tomato produce was sold through assemblers because
farmers wanted to save transport cost, loading and
unloading costs.
The second important market channel comprises
farmers who sell their fresh tomatoes through
wholesalers instead of passing through assemblers.
Approximately 18% of the sampled farmers sold their
fresh tomatoes to wholesalers in the April-June 2010
tomato growing season. The farmer-wholesaler
arrangement is similar to the farmer-assembler
arrangement in that transacting parties meet at the farm
gate or collection centres. The pricing system of
wholesalers depends on current market prices. The
shortening of the distribution chain by having a direct
buying-link between farmers and wholesalers implies that
few negotiation and bargaining transactions take place
among smallholder farmers and wholesalers. When
disagreements occur, farmers and wholesalers can
directly re-negotiate with each other instead of depending
on assemblers as intermediaries. Wholesalers are
generally well funded; and for this reason, provided
farmers with loans which was used by smallholder
farmers to purchase production inputs such as seeds,
fertilizers, or chemicals for pest and disease control.
Wholesalers assistance however, does not come without

consequences because farmers are compelled to pay the


loans or give priority to their wholesaler-financier when
tomatoes are ready for harvesting. Thus they are forced
into an agreement that can be referred to as a kind of
locked-in effect.
According to traders
We could lend to farmers up to 300,000 Tanzanian
shillings with 5% interest per month. Payment was made
after harvest or through agreed sales. Traders reported
that some farmers diverted the purpose of loan accessed
to other businesses hence failed to pay the loan on time.
During focus group discussions farmers were asked to
give their opinion about the informal contractual
arrangement with traders. It was established that the
arrangement was good because farmers had a certain
degree of assured market and income security through
agreed sales.
According to farmers
We consider the contractual arrangement to be good
because we are assured of selling our produce to traders
who have provided credit to us. However, sometimes we
are forced to sell our produce for low market price
because of the contractual agreements. This makes us to
get low cash income from tomato produce
The above two market channels handled slightly above
three quarters (76%) of the fresh tomatoes produced in
the study area during the April-June 2010 tomato growing
season. The remaining 24% were channeled through
processors, retailers or sold directly to ultimate
consumers. Approximately 1%, 13% and 10% of the
sampled farmers reported to sell their tomatoes through
processors, retailers and directly to consumers
respectively. Consumers of fresh tomatoes include
individual households and organizations such as schools,
colleges and hospitals. During focus group discussion it
was revealed that there were high level of losses about
40 - 60% of the tomatoes were lost due to poor post
harvest handling.
According to farmers:
Limited access to markets for our produce is the most
challenging problem we face. Most of us sell our
tomatoes to middlemen at below market price because of
limited access to urban markets. We do not have the
capacity to sell our tomatoes to places where can get
better prices, because of high transportation costs. We
also lack storage facilities for conserving tomatoes. This
result into big losses thus we dont have choice other
than selling at the price determined by middlemen on a
specific date.
Int. J. Agric. Mark.
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The role of middlemen in fresh tomato supply chain in Kilolo district, Tanzania

Table 7. Volume of fresh tomatoes handled by assemblers in April-June 2010 tomato growing season

Quantity bought
Quantity sold

Quantity in tengas per assembler per season


Min
Max
Mean

SD

400
395

2 054
2 049

7 760
7 750

2 226
2 218

Table 8. Fresh tomato prices paid and received by assemblers in April-June 2010 tomato growing season

Buying price
Selling price

Prices per tenga in Tshs


Min
Max
6 000
12 000
1 0000
25 000

Mean
7 861
1 6611

SD
1 663
4 114

Table 9. Volume of tomatoes handled by wholesalers in April-June 2010 tomato growing season

Quantity bought
Quantity sold

Quantity of tomatoes in tengas per wholesaler per season


Min
Max
Mean
SD
150
2 000
608
437
135
1 995
597
434

Table 10. Prices paid and received by wholesalers in April-June 2010 tomato growing season

Prices per tenga in Tshs.


Buying price

Min
7000

Max
18000

Mean
11200

SD
2665

Selling price

18000

40000

25850

5907

There are three main trader categories in the fresh


tomato supply chain in Kilolo District. The first category is
assemblers. Rural assemblers play a crucial role in the
supply chain since they have close links with many local
producers and buyers who come from different parts of
the country to purchase tomatoes. Exchange of tomatoes
from producers to assemblers takes place at the farm
gate or collection centers near areas where tomatoes are
being grown. Assemblers have to bear the cost of tomato
loading, transportation to their buyers and unloading.
Assemblers sell the fresh tomatoes to wholesalers,
retailers or directly to consumers. Majority (55.6%) of the
assemblers sold their tomatoes at village markets to
wholesalers from urban areas such as Dar es Salaam,
Morogoro, Ruvu, Mtwara, Chalinze, Tanga and
Mombasa. Approximately 25% of the assemblers sold
their tomatoes to retailers and the remaining 19.4% sold
their produce to final consumers. Quantities of tomatoes
handled by the assemblers varied greatly as indicated in
Table 7. On average assemblers bought approximately 2
226 tengas and sold 2 218 tengas per season. Similarly
prices paid to producers (buying price) and prices
received by the assemblers varied greatly with mean
buying price of Tshs. 7 861 and selling price of Tshs. 16
Mwagike and Mdoe
054

611 per tenga in April-June 2010 tomato growing season


(Table 7).
The second category of traders is wholesalers.
Wholesalers purchase tomatoes from farmers and/or
assemblers at the farm gate or collection centers.
Wholesalers ensure that the purchased tomatoes are
properly packed, stored ready for transportation to selling
points in urban area. About 70% of the wholesalers
reported that they sold their produce to retailers and the
remaining 30% sold their produce directly to consumers.
Quantities of tomatoes purchased and sold by
wholesalers are shown in Table 9 while prices paid and
received by wholesalers are indicated in Table 10. As
revealed from the two tables both quantities handed and
prices paid/received varied greatly. On average
wholesalers bought and sold 608 tengas and 597 tengas
per season respectively (Table 9). Each tenga was
bought and sold at an average price of Tshs. 11 200 and
Tshs. 25 850 per tenga respectively in the April-June
2010 tomato growing season (Table 10).
The third category of traders is retailers. Retailers are
known for their limited capacity of purchasing and

The role of middlemen in fresh tomato supply chain in Kilolo district, Tanzania

Table 11. Volume of fresh tomatoes handled by retailers in April-June 2010 tomato growing season

Quantity bought
Quantity sold

Quantity of tomatoes in tengas per retailer per season


Min
Max
Mean
150
600
265
70
400
167

SD
135
11

Table 12. Prices paid and received by retailers in April-June 2010 tomato growing season

Buying price
Selling price

Prices in Tshs per tenga


Min
Max
7 000
14 000
21 000
32 000

Mean
9 424
26 200

SD
1 723
2 719

Table 13. Losses among traders category during April-June 2010 tomato growing season

Type of trader
Assemblers
Wholesalers
Retailers

% losses among traders


0.3
2.0
37

Table 14. Actors share of the price paid by consumers along the longest fresh tomato supply chain in April-June
2010 tomato growing season

Marketing node
Farm level
Assembling level
Wholesale level
Retail level

Price (Tshs)
7 515
16 611
25 850
26 200

handling products. At retail level the operators are


differentiated according to their location and/or the
volume of tomatoes they trade. The retailers can be
categorized into two groups, sedentary and hawkers. The
sedentary retailers sell fresh tomatoes at open markets
and along roadsides in small wood made kiosks while
hawkers sell fresh tomatoes along the roadside but do
not have a permanent stand (booth). They move around,
approaching potential customers and advertising to
attract them. They provide the necessary services to their
customers including parking tomatoes in nylon or plastic
bags. The roadside markets are strategically located at
stop over places along trunk roads such as roadside
hotels or restaurants like Kitonga, Bismilahh and Al
Jaazira along the Dar es Salaam-Tunduma highway.
Other roadside markets are located in highway junctions.
On average retailers handled smaller quantities of fresh
tomatoes than assemblers and wholesalers. They bought
an average of 265 tengas at an average price of Tshs
9,424 per tenga and sold an average of about 167 tenga

Marketing margin
8 596
9 739
350

at an average selling price of Tshs. 26,200 per tenga


(Tables 11 and 12).
The findings presented in Tables 12 and 14 indicate
differences in quantities bought and sold by assemblers,
wholesalers and retailers respectively. The difference
was due to wastage during transportation as a result of
poor storage facilities especially at the retail node of the
supply chain. Table 13 shows losses incurred by the
three categories of traders along the fresh tomato supply
chain. The table shows that approximately 37% of the
fresh tomatoes were wasted at the retail node of the
supply chain due to lack of storage facilities. These
findings support the findings reported by MUVI (2009)
that about 48-50% of the horticultural produce is wasted
at retail level due to lack of markets and lack of storage
facilities.
Apart from losses, quantities handled and prices
paid/received varied greatly among the three categories
Int. J. Agric. Mark.
055

The role of middlemen in fresh tomato supply chain in Kilolo district, Tanzania

of traders with retailers handling the smallest quantities of


tomatoes per season but paying/charging the highest
price per tenga of tomatoes, probably due to
transportation costs reflecting spatial differences between
the supply and demand centers. During the field survey,
traders indicated that the major risk in tomato marketing
is oversupply or undersupply of fresh tomatoes caused
by weak market intelligence and inability to forecast. In
order to minimize losses from such fluctuations many
traders have established social networks that provide
indicative supply and demand situation. During focus
group discussions farmers and traders reported that
prices of tomatoes are higher between March and May
when there is low supply of tomatoes while prices are low
from June to September. Again the prices increase in
December because of the end of year festivals when
consumption of fresh tomatoes increases.
The share of the producer of the price paid by the
ultimate consumer depends on the length of the market
channel (number of actors). For example the producers
share of the price paid by ultimate consumer of fresh
tomatoes in the longest market channel for fresh
tomatoes in April-June 2010 tomato growing season was
28%. On the other hand, producers who sold their
tomatoes directly to consumers received the largest
share 100% of the price paid by consumers.
The vegetable supply chain in Tanzania is complex and
disorganized. Supply chains are based on the contacts
and knowledge of the people involved in the trading. The
finding indicates that smallholder farmers lack access to
urban market due to naturally poor location and thus rely
on middlemen (traders) to market their tomato produce.
The findings suggest that traders play significant role in
facilitating smallholder farmers access to markets. These
results support the findings of Eskola (2005) and MUVI,
(2009) who found that local traders act as facilitators
between many local producers and a few Dar es Salaam
buyers. However, the findings show that the tomato
supply chain is very long and disorganized. Long supply
chains are costly in terms of time and money. In the
Tanzanian context, the use of middlemen is often the
only viable way to trade in absence of enforceable and
foreseeable contracts. The use of middlemen to reduce
transaction costs has also been found in the country
context of Ethiopia (Gabre-Madhin, 2001).
The tomato supply chain has no lead firm at any level of
the chain (i.e. production, marketing, trading and
consumption) that govern and control the system and
instead it is governed and controlled by the supply and
demand conditions in the market that set commodity
Mwagike and Mdoe
056

prices only (Fig. 2). There is no lead firm that coordinates


the supply chain in relation to markets and other
important information shared among the actors. The
tomato supply chain in Kilolo district is characterized by
lack of formal governance. The governance mechanism
in the tomato supply chain is underdeveloped. Supply
chain actors operate in an un-coordinated manner.
These results support the findings of Banson et al.,
(2014) who found that there is lack of coordination
management plans in the governance structure of
agribusiness in Africa which leads to disjointed
government policies with unintended consequences such
as unstable agri-business and loss of revenue.
Furthermore, the findings revealed that unreliability of
markets for tomato produce was linked with the poor
conditions of feeder roads. This had caused difficulties in
transporting the produce from the farms to the markets.
Due to largely varying condition of the road network, the
ongoing market price for transportation is often higher.
Smallholder farmers can successfully exploit the market
opportunities for fresh tomatoes if measures like
improvement in road infrastructure are taken to reduce
transaction costs.
CONCLUSIONS
The findings of the study have shown that smallholder
tomato farmers in Kilolo District rely on middlemen who
purchase their tomatoes for sale at the terminal market in
Dar es Salaam about 500 km from Kilolo. The distance
of the terminal market from the study area suggests that
selling through middlemen cannot be avoided unless the
smallholder tomato farmers are directly linked with buyers
at the terminal markets. Furthermore the findings have
shown that smallholder farmers sold their produce at
lower prices in order to ease congestion. There is
therefore a need to promote formation of vegetable
farmers cooperative groups. Being in strong cooperative
groups will not only increase their bargaining power with
the middlemen but groups can also bulk their vegetables,
organize transport and transport vegetable to Dar-essalaam without relying on the middlemen.
The findings of the study have shown that smallholder
farmers in remote vegetable growing villages have limited
access to urban markets due to poor road network
leading to high transportation costs that limit number of
traders going to these villages. In order to realize the full
potential of agricultural trade as a tool in the fight against
poverty, the suggested policy interventions are to
prioritize and increase funding for physical infrastructure.

The role of middlemen in fresh tomato supply chain in Kilolo district, Tanzania

Improvement in feeder roads is likely to bring about large


welfare gains in terms of large volumes of vegetables
traded and can make assembling of vegetables easier
and less costly for traders; improve equitable access to
credit; enforce laws and support formalization of
contracts to diminish risks of trading; and finally improve
dissemination of market information to allow markets to
work efficiently. Further studies should look at vegetable
supply chain at national level and investigate how
vegetable supply chain can operate at global level.
ACKNOWLEDGMENTS
The authors acknowledge with gratitude, Mzumbe
University, Tanzania that provided the financial support to
this research.
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Accepted 10 May, 2015
Citation: Mwagike L, Mdoe N (2015). The role of
middlemen in fresh tomato supply chain in Kilolo district,
Tanzania. International Journal of Agricultural Marketing,
2(2): 046-056.

Copyright: 2015 Mwagike and Mdoe. This is an openaccess article distributed under the terms of the Creative
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The role of middlemen in fresh tomato supply chain in Kilolo district, Tanzania