Factors Influencing Cashew Farmers' Marketing System Choice Between Contract Farming and Warehouse Receipt Systems in Mkuranga District, Tanzania

Ezekiel Isidor Lyimo, Joseph Hella and Silver Hokororo
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Ezekiel Isidor Lyimo: Department of Agricultural Economics and Agribusiness, Sokoine University of Agriculture, Morogoro, Tanzania
Joseph Hella: Department of Agricultural Economics and Agribusiness, Sokoine University of Agriculture, Morogoro, Tanzania
Silver Hokororo: Department of Business Management, Sokoine University of Agriculture, Morogoro, Tanzania

Journal of Agriculture and Rural Development Studies, 2026, issue 1, 184-191

Abstract: This study examines the underlying drivers behind smallholder cashew farmers’ choice between contract farming (CF) and warehouse receipt system (WRS) arrangements in Mkuranga District of Tanzania. Using cross-sectional survey data from 354 farmers during the 2023/2024 production season, a binary logit approach was applied to estimate the probability for choosing CF relative to WRS, with marginal effects computed for interpretation.The results show that transport cost is the most influential factor, substantially increasing the likelihood of CF participation, while distance to market also exerts a significant positive effect. Having access to reliable information on markets shows a weaker but positive influence. In contrast, socio demographic attributes such as sex and age, educational attainment, and landholding size do not significantly shape marketing system choice. These findings suggest that farmers’ decisions are driven primarily by transaction related and spatial constraints rather than personal characteristics. The study concludes that improving rural transport infrastructure and strengthening market information dissemination within the WRS framework are critical for enhancing its effectiveness and promoting balanced participation. By highlighting the dominance of transaction costs and information asymmetries over demographic factors, the study contributes empirical evidence to debates on institutional marketing arrangements in Tanzania’s cashew sector and informs broader discussions on agricultural commercialization in developing economies.

Keywords: Cashew farmers; Contract farming; Warehouse receipt system; Marketing system choice; Transaction costs; Tanzania (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:ddj:ejards:y:2026:i:1:p:184-191

DOI: 10.35219/jards.2026.1.11

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