SOKOINE UNIVERSTY OF AGRICULTURE SCHOOL OF AGRICULTURAL ECONOMICS AND BUSINESS STUDIES DEPARTMENT OF AGRICULTURAL ECONOMICS AND AGRIBUSINESS SPECIAL… [602634]

SOKOINE UNIVERSTY OF AGRICULTURE

SCHOOL OF AGRICULTURAL ECONOMICS AND BUSINESS STUDIES

DEPARTMENT OF AGRICULTURAL ECONOMICS AND AGRIBUSINESS

SPECIAL PROJECT REPORT

ASSESSMENT OF THE CONTRIBUTION OF GOVERNMENT SUBSIDIES ON
MAIZE PRODUCTION AND INCOME OF SMALLHOLDER FARMERS IN
MOSHI MUNICIPAL

BY
MWAKIBETE GWAMAKA J.

A SPECIAL PROJECT REPORT SUBMITTED IN PARTIAL FULFILLMENT OF
THE REQUIREMENTS FOR THE DEGREE OF BACHELOR OF SCIENCE IN
AGRICULTURAL ECONOMICS AND AGRIBUSINESS OF THE SOKOINE
UNIVERSITY OF AGRICULTURE (SUA), MOROGORO -TANZANIA

JULY , 2016

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DECLAR IATION
I declare that this report is my original work and has not been presented in any other university/institution
for consideration of any certification. This research report has been complemented by referenced sources
duly ack nowledged. Where text, data (including spoken words), graphics, pictures or tables have been
borrowed from other sources, including the internet, these are specifically accredited and references cited
using current APA system and in accordance with anti -plagiarism regulations.

Signature_________________________ Date: ____________________
Name. MWAKIBETE GWAMAKA J
Registration number. AEA/D/2013/0053
Department: AGRICULTURAL ECONOMICS AND AGRIBUSINESS
Supervisors’ declaration: This report has been submitted for appraisal with my approval as Supervisor.
Signature _________________________Date _________________
Name: Ms. INNOCENSIA D.PATO
Department: AGRICULTURAL ECONOMICS AND AGRIBUSINESS
University: SOKOINE UNIVERSITY OF AGRICULTURE

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DEDICATION
I would like to dedicate this work to my late Mother Rose Fredrick Mwakibete (R.I.P) and my
father Jasson Kenethi Mwakibete (R.I.P). My young brother Baraka Jasson Mwakibete an my
young sisters Rhoda and Upendo(R.I.P). As a family we do remember the pains and happiness
we used to share.

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ACKNOWLEDGEMENT
A considerable number of people played significant roles in making this work. Mentioning all of
them would need another chapter. However, I would like to express my sincere gratitude and
appreciation to my supervisor Ms. Innocensia D. Pato for her supervi sion, encouragement,
competent guidance, patient, constructive advice, criticism and assistance throughout this work.
Either I thank all respondents who I interviewed for their cooperation to the accomplishment of
my research. Finally would love to thank my entire fellow colleague for the good advices on
how well should I write this work. And their tolerance for my disturbance for asking them many
questions whenever I needed their help also for their encouragement whenever I felt like giving
up. May God bl ess you all.

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Table of Contents
DECLARIATION ………………………….. ………………………….. ………………………….. ………………………. i
DEDICATION ………………………….. ………………………….. ………………………….. ………………………….. ii
ACKNOWLEDGEMENT. ………………………….. ………………………….. ………………………….. ………… iii
LIST OF TA BLES ………………………….. ………………………….. ………………………….. ……………………. vi
LIST OF FIGURES ………………………….. ………………………….. ………………………….. …………………. vii
APPENDICES ………………………….. ………………………….. ………………………….. ……………………….. viii
ABBREVIATION AND A CRONYMS ………………………….. ………………………….. …………………… ix
ABSTRACT ………………………….. ………………………….. ………………………….. ………………………….. …. x
INTRODUCTION ………………………….. ………………………….. ………………………….. ………………….. 1
1.0 BACKGROUND OF THE STUDY ………………………….. ………………………….. ……………….. 1
1.2 STATEMENT OF PROBEM ………………………….. ………………………….. ………………………. 2
1.3.0 OBJECTIVE OF THE STUDY ………………………….. ………………………….. …………………. 4
1.3.1 General objective ………………………….. ………………………….. ………………………….. …………. 4
1.3.2 Specific objectives ………………………….. ………………………….. ………………………….. ……….. 4
1.4 Significance of the study (Rationale) ………………………….. ………………………….. ……………. 4
1.5 Limitations ………………………….. ………………………….. ………………………….. ……………………. 5
1.6 Assumptions ………………………….. ………………………….. ………………………….. …………………. 5
1.7 Theoretical and conceptual framework. ………………………….. ………………………….. ………… 6
2.1 Definition and concepts ………………………….. ………………………….. ………………………….. ….. 8
2.2 Meaning of smallholders ………………………….. ………………………….. ………………………….. … 8
2.4 Input subsidies‟ roles and objectives ………………………….. ………………………….. …………….. 9
2.5 Conditions affecting effectiveness of inputs subsidies. ………………………….. ………………. 11
3.0 RESEARCH DESIGN AND METHODOLOGY. ………………………….. ………………………….. . 13
3.1 Data analysis ………………………….. ………………………….. ………………………….. ……………….. 13
3.2 Data r equired. ………………………….. ………………………….. ………………………….. ……………… 14
3.3 Research design. ………………………….. ………………………….. ………………………….. ………….. 14
3.4 Research methodology. ………………………….. ………………………….. ………………………….. … 15
3.5 Location of the study. ………………………….. ………………………….. ………………………….. …… 15

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3.6 Sampling techniques and sample size. ………………………….. ………………………….. ………… 16
3.7 Data collection techniques. ………………………….. ………………………….. ………………………… 16
3.8 Logistical and Ethical Considerations ………………………….. ………………………….. …………. 17
3.9 Pre -testing/ Piloting study ………………………….. ………………………….. …………………………. 18
4.0 RESULTS AND DISCUSSION ………………………….. ………………………….. ……………… 19
4.1. Characteristics of respondents ………………………….. ………………………….. ………………………. 19
4.1.1. Gender of respondents ………………………….. ………………………….. ………………………….. . 19
4.1.2 Age of respondents ………………………….. ………………………….. ………………………….. ……. 19
4.1.3. Education level of farmers ………………………….. ………………………….. ……………………… 20
4.2. Type of subsidies received. ………………………….. ………………………….. ………………………….. 21
4.3. Quantity of inputs received ………………………….. ………………………….. ………………………….. 21
4.4. Extent use of subsidized inputs ………………………….. ………………………….. …………………….. 22
4.5. Effect of subsidy on maize production ………………………….. ………………………….. …………… 23
4.6 Accessibility of subsidies by smallholde r farmer ………………………….. …………………………. 26
4.7. Income from maize ………………………….. ………………………….. ………………………….. …………. 27
4.8. Income from other activities ………………………….. ………………………….. ………………………… 28
4.9. Problems associated with input subsidy in the study a rea ………………………….. …………….. 29
CHAPTER FIVE ………………………….. ………………………….. ………………………….. …………………… 33
5.0 CONCLUSION AND RECOMMENDATIONS ………………………….. ………………………. 33
5.1 Conclusions ………………………….. ………………………….. ………………………….. ……………………. 33
5.2. Recommendations ………………………….. ………………………….. ………………………….. ………….. 34
REFERENCES ………………………….. ………………………….. ………………………….. ………………………. 36
APPENDICES ………………………….. ………………………….. ………………………….. ……………………….. 39

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List of Tables
Table 1: Gender of respondents …………………………………………………………………………………. …… 16
Table 2: Age of respondents ……………….. ……………………………………………………….. ………… ….. 17
Table 3: Age categories of Farmers…………………. …………….. ………………………………….. ……. 17
Table 4: Education level of respondents ………… …………………… ……………. ……………………….. …… 17
Table 5: Type s of subsidizes received ……………. ………………………….. ………………………… ……. 18
Table 6: Bags of fe rtilizer received by farmers ………………………………… ……………………… ……… . 19
Table 7: kilograms of improved seed r eceived by the farmers……………… ……….. …………… … 19
Table 8: Rate of inputs used for farmers received inputs subsidies………….. ……………….. ………… 20
Table 9: Acreage maize yields in year 2011 /12and 2013/14 users and non -users of inputs……. . 21
Table 10: Regression results …………………………… ………………. …………………………………………….. 22
Table 11: Yield changes due to the use of subsidized inputs …………… …………………………23
Table 12: Accessibility of the subsidies by smallholder farmers ………….. …………………………. 23
Table 13: Use of maize produced by households………………………… …… …………………….. 23
Table 14: Income from other economic activities…………………… ……………. ………………. 25

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List of figures
Figure 1: Changes in household‟s income due to use of subsidies in year 2014/15……………..25
Figure 2: Proportion of maize income on the total household income… …………………….. ….26

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APPENDI CES
Appendix 1: Coefficients of a model of subsidized input with impact on maize produced…….53
Appendix 11 : Structured questionnaire administered to subsidies beneficiarie s…… ………………. .36

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ABBREVIATION AND ACRONYMS

ASDP – Agricult ural Sector Development Program
CAADP – Comprehensive African Agriculture Development Program.
FAO – Food and Agriculture Organization of the United Nations
MKUKUTA – Mkakati wa Kukuza Uchumi na Kupunguza Umaskini Tanzania
MKUZA – Mkakati wa Kupunguza Umasikini Zanzibar
NAIVS – National Agriculture Input Voucher Scheme
NSGRP – National Strategy for Growth and Reduction of Poverty
PADEP – Participatory Agriculture Development and Emp owerment Project
SAGCOT – Southern Agricultural Growth Corridor of Tanzania
SNAL – Sokoine National Agricultural Library literatures
SUA – Sokoine University of Agriculture
TDV – Tanzania Development Vision
URT – United Republic of Tanzania
WB – World Bank
WHO – World Health Organization
ZSGRP – Zanzibar Strategy for Growth and Reduction of Poverty

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ABSTRACT

The study was conducted to assess the effects of agricultural inputs subsidies on maize
production and easiest of accessing of inputs by the farmers in Moshi Municipal. The speci fic
objectives of the study were , (1) To assess the accessibility of the subsidized inputs to the
smallholder farmers.(2) To analyze the effect of agricultural input subsidies on maize production
in the study area. The study was done in a time of eight months which cover from t he time of
writing concept note , proposal writing, data collection , data analysis and report submiss ion.
Data for the study were collecte d using a structured questionnaire administered to 35 randomly
selected farmers from three villages in Moshi Munici pal. The collected data were entered and
analyzed using SPSS and Excel computer software to obtain means, frequencies, and
percentages . The results of the study reveal ed out the answers upon the laid down hypotheses.
Where by the study find out that there is contribution of the government subsidize inputs to the
maize produced by smallholder farmers in Moshi municipal since there were increase in maize
production to the users of the government subsidies . Either the study realized that there is
inefficiency of performance of the ways used to distribute government subsidies which resulted
to late delivery of the subsidies. Government subsidies ar e very important to smallholder farmers
and they should be increased. Either close government supervision is highly needed for the sake
of the program s to benefits the intended groups and for the government being able to achieve its
goals and objectives. The researcher sugge sted that government should come up with a system
which will use f armers‟ mobi le phone for registration and payment for subsidized input since it
is cost-effective and efficiency way of ensuring that all farmers are paying constant amou nt for
subsidies. Through this government w ould be able to ac hieve its pre -determined goals

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INTRODUCTION
1.0 BACKGROUND OF THE STUDY

Government subsidies implies acquisition of farming inputs by farmers at a lower price compare
to ongoing normal market price as being partly covered by the government, to make them
cheaper and able to be bought by the smallholder farmers who are the majority stakeholder in
agriculture sector (FAO,2012). Government of Tanzania has been subsidizing agricultural inputs
since1967 while spending about US$5 -8 million putting much emphasis in subsidizing
agricultural inputs especially, fertilizer and improved seed (Aman and Maro 1992). In 1978 and
early of 1980s‟ Tanzania government increased her spending on subsidie s to reach US$10 -17
million up to the late 1980s‟ which counted to 16 to 43 percent of government spending in
agriculture (Turukana,1995). And that emphasize was the response to food shortage that
Tanzania faced in 1973 -1974 due to drought. Whereby in 1967 Tanzania government through
Food Security Department in a ministry of Agriculture allowed Tanzania Fertilizer Corporation
to import and distribute subsidized fertilizer to smallholder farmers. Reaching in 1990 the total
cost for subsidized inputs was 70 p ercent (URT,2011). But subsidy tremendously reduced to zero
in 1994to the early of 1999 as due to progressive stabilization of nominal exchange rate
from425Tshs/US$ to 670Tshs/US$ and progressive inflation that occurred at the same time
(World Bank, 2012).
Later in the late of 1990‟s Tanzania government decided to continue providing agricultural
subsidies with two major aims. Which were to enable smallholder farmers to raise their
productivity which ensure food supply as well as rising their income and nati onal income as
whole as they will sell their surplus outputs (URT,2000). Tanzania government saw that as the

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only way to improve living standard of her people whose 80 percent have employed in
agriculture. While contributing 26 percent of total GDP and 75 percent of household of
Tanzanian income it is from agriculture activities ( Hepelwa, Selejio and Mduma,2013). That
made Tanzania government to put agriculture sector in a strategy for poverty reduction. One area
that remains very essentially and had drawn a very high attention of the government is input
subsidies. And that is to promote the use of modern agricultural inputs such as fertilizer and
improved seed in order to achieve the effort of the government to improve crop yields which
remain below the po tential of the readily available technology (Ahmed, 1994).
Tanzania government came up with various ways of distributing inputs subsidies which includes
using community development banks to provide farmers with inputs credits. After harvest
farmers were re quired to pay back their credits once they have sold their harvest. Either
government used farmers groups to get inputs loan from various companies assigned by the
government. And also used cooperative societies in early of 2000s‟ but currently government use
National Agricultural Inputs Voucher Scheme(NAIVS)(URT, 2007);Blanken et al., 1994). Which
has been already distributed over 15 million vouchers to over 2.5 million farm households in
2012,( Hepelwa, Selejio and Mduma, 2013). These inputs have increased production of 1.5
million tons of additional maize and rice reducing the country‟s dependence on costly grain
imports and food aid. (World Bank, 2012).
1.2 STATEMENT OF PROBEM
Government subsidies are very essential in improving the income and livelihoods of these
farmers and assuring t heir food security ( Nyikai, 2003; OECD, 2008 ). Over the past years the
subsistence farming has neither improved the livelihoods of the rural population as the
government subsidizes agriculture to stabilize household econom y. As the result, smallholder

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agricultural production has become a policy priority for the United Republic of Tanzania.
Through subsidizing agricultural inputs so that will lower costs for acquisition and increasing
inputs uses that will lead to the higher productivity. This will help smallholder farmers to
increase their inc ome and food security (URT, 1997 and 2008).
Effort have been put forward by the Tanzanian government on the process of inputs subsidizing
for smallholder farmers through various agricul tural policies and program such as, Agriculture
first (Kilimo Kwanza ) program, Southern Agricultural Growth Corridor of Tanzania(SAGCOT),
DADPS,PADEP and so forth. Besides, the strategic frameworks such as Tanzania Development
Vision 2025(TDV,2025),Nation al Strategy for Growth and Reduction of Poverty
(NSGRP/MKUKUTA) AND ZSGRP/MKUZA), Agricultural Sector Development Strategy
(ASDS), Comprehensive African Agriculture (CAADP) -TAFSIP)
All have been putting emphasis on agricultural transformation from subsis tence to commercial
production for archiving higher agricultural productivity, higher incomes, reduction of poverty
and improving food security. And all these are only possible to small farmers through adequa te
government subsidies ( Mbette et al.,2013 ).This is due to its great benefits of increasing
agricultural productivity, income of the rural dwellers and poverty reduction (Rahman and
Manprasert,2006). There few study that have been done to assess the contribution of government
subsidies to the smal lholder farmers in Moshi municipal. This study is set out to measure effects
of government subsidies on the income of smallholder farmers in Moshi Municipal.

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1.3.0 OBJECTIVE OF THE STUDY
1.3.1 General objective
To assess contribution of government subsidies on maize production and income of smallholder
famers.
1.3.2 Specific objectives
1. To assess the accessibility of the subsidized inputs to the smallholder farmers.
2. To analyze the effect of agricultural input subsidies on maize production in th e study area
1.3.3 Research questions
1. Does farmers get the subsidized inputs at a time needed ?
2. What are the impacts of subsidized inputs on maize production ?
1.3.4 Hypotheses
1. There are some difficulties for smallholder farmers accessing subsidized inputs
2. Changes in maize productivity is not influenced by the input subsidy provided by the
government.
1.4 Significance of the study (Rationale)
The study is contribute to the body of knowledge to identify the factors that leads to delaying of
subsidized inputs to reach to the particular farmers as well as other relating factors that hinder
expected achievements attainment due to mismatch of time between a time inputs needed and a
time inputs reaches to the farmers in Moshi Municipal.
Also th is study is useful to policy makers and planners as it bring policy measures to be
undertaken so as the farmers will be able to realize the high productivity from their farms which

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will ensure adequate food supply and increase their income. Either governm ent will be able to
assess impactions of its efforts toward improving smallholder farmers productivity.
1.5 Limitation s
The study faced the following limitations based on nature of the respondents.
Firstly, poor records keeping behavior by the farmers for what they produce , what they sells in
the market as well as what do they spend in their farms during production and lead to the wrong
information or missing of the information this have effect during a time of draw ing conclusion.
Secondly, fear for them to give out the production and income related information due to some
cultural believes such as fear to bewitch ed. Thirdly faced by the study is unwillingness some of
the respondents who need ed to be promised an allowance before giving out the information. Due
to their beliefs that research are given money to give to them which is not correct.
1.6 Assumptions
•The study assumed that respondent s are homogeneous since they are all facing the same
challenges on accessing inputs and they are sharin g similar effects of subsidized inputs. This
allowed to use random sampling technique method of data collection as well as for the findings
to hold true in the conclusion to be made.
•The study assumed that there was an increase in income as a result of su bsidized inputs
application which led to higher outputs and once sold increased farmers income.
•The study also assume d that there was the delay of the inputs and that is to say inputs farmers
do not realize expected results at a time w hich led to poor out puts despite of using improved seed
and fertilizer just because are delivered during wrong time.

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1.7 Theoretical and conceptual framework.
1.7.1 Theoretical framework.
Accord to Mor ris (2007) he said that, where subsidized inputs are rationed (as is common), then
such rationing leads to opportunities for those controlling subsidized inputs (politicians,
government officials, fertilizer suppliers, farmer organization office bearers, etc). To divert
subsidized inputs from their intended beneficiaries for a side payment or to demand payments
from beneficiaries in return for provision of subsidized inputs. The important point here is that
even if there are net gains from a subsidy (as a resul t of divergences between farmers‟ and
societies perceptions of costs and benefits from input use). Much of the subsidy cost may be a
straight transfer from the state (and hence from taxpayers) to producers and suppliers of land,
labor and inputs without an y economic gain.
Aaccording to Crowdford,(2006) the major concern with input subsides concerns the extent of
leakages and diversion of subsidized inputs away from their intended use. In the context of the
supply and demand analysis, this can be considered in three ways – (a) diversion between
products, (b) diversion from intended beneficiaries to others within the country, and (c)cross
border leakage.
Doward (2009) suggested that, subsidy can only generate a positive net economic return to a
country if ther e is some market failure which means that the downward shift in the supply curve
is greater than the cost of subsidizing production. Including the costs of subsidy administration
(that is Z, per unit cost of the subsidy to the government, is less than Z‟, the effective increase in
output price – or reduction in per unit costs – received by producers). This may occur where
farmers‟ perceived private cost of inputs is higher than the true social or economic cost, and/or

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the farmers‟ perceptions of private ben efits from increased input use are lower than the actual
social or economic benefits. Such situations can arise where (a) farmers‟ private costs of working
capital for input purchase are greater than the social cost of capital, (b) farmers‟ lack of
knowled ge about the benefits of inputs means that their expectation of the production benefits
from input use are less than the benefits that they will gain, (c) there are learning costs with input
use such that initial farmer returns are low but these will incre ase with experience.
1.7.2 Conceptual frame work.
The researcher conceptualize in the study in relationship between maize production and input
subsidizes (seed grains and fertilizer).Which means that maize production stood as a dependent
variable and subsi dized inputs which includes grains seed , and fertilizer as the independent
variables. Despite of other factors that had influence over maize outputs such as weather
condition, farm sizes, agronomic practices a nd soil fertility the study hold them constant by just
trying to look upon the influence of subsidized inputs over maize outputs in Moshi Municipal..
The relationship between the factors can be expressed as follows.
Y = β0 + β1X1+ β2X2+Ε
Where:
Y= maize output
β0, β1 and β2 ¸ = regression parameters
X1 and X2 = fertilizer and grain seeds respectively
Ε = an error term

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CHAPTER TWO
2.1 Definition and concepts
Crawford et al .(2005), in alternative approaches for promoting fertilizer use in Af rica, with
particular reference to the role of fertilizer subsidies defined agricultural subsidies as a
governmental subsidy paid to farmers and agribusinesses to supplement their income, manage
the supply of agricultural commodities, and influence the cos t and supply of such commodities.
In line with the above definitions,
Chris, E (2006) defined agricultural subsidies as the payments by the federal government to
producers of agricultural products for the purpose of stabilizing food prices, ensuring plenti ful
food production, guaranteeing farmers' basic incomes, and generally strengthening the
agricultural segment of the national economy.
Dorward et al.(2011) referred agricultural subsidies as an act of the federal government to
provides a "safety net" to a gricultural producers to help them through the variations in
agricultural production and profitability from year to year – due to variations in weather, market
prices, and other factors – while ensuring a stable food supply.
2.2 Meaning of smallholders
There is no clear cut definition of a smallholder farmer. Chambering(2008) pointed out that “the
sole consensus on small farms may be the lack of a sole definition.” The simplest and
conventional meaning of a smallholder is the case when the land available fo r a farmer is very
limited (Chamberlin, 2008 and Hazell et al., 2007). However, the meaning goes far beyond this
conventional definition and consists of some general characteristics that the so called small farms
or smallholders generally exhibit. Chamberl in (2008) has identified four themes on the basis of

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which smallholders can be differentiated from others. These themes include landholding size,
wealth, market orientation, and level of vulnerability to risk (Hazell,2007 ). Accordingly, the
smallholder is the one with limited land availability, poor -resource endowments, subsistence –
oriented and highly vulnerable to risk.
2.4 Input subsidies’ roles and objectives
i) Dynamic effects of subsidies on growth
There are, two important potential dynamic benefits of subsidies that have been given much less
emphasis in conventional which are;
First, subsidies those are effective in raising land and labour productivity (with overall increases
in on -farm labour demand). And in driving down food staple prices will raise t he real incomes of
large numbers of poor consumers and producers. Also this should expand demand for locally
produced non staple foods (horticultural and animal products) and non -farm goods and services,
driving up local labour demand and wages and improvi ng people‟s nutrition.
A second set of important potential dynamic benefits from input subsidies arises from their
stimulation of increased input and output trade and wider economic activity (as described above)
having positive spillover effects with „mark et thickening‟. This happens if the greater volume of
economic activity stimulated by the subsidy reduces coordination and transaction costs and risks
and promotes institutional and communications and transport service and infrastructure
development ( Dorw ard et al., 2004a, 2009; Dorward and Kydd, 2004).
ii) Soil fertility replenishment
One of the reasons put forward for implementing fertilizer subsidies is the need to
combat the alarming decline in soil nutrients in many parts of Africa and the need for

10
(and b enefits of) their replenishment. Crawford et al. (2006) summarize soil fertility
problems in terms of declining fallows, rapid deforestation, land degradation, and
declining nitrogen, phosphate, and potassium levels in arable soils. Subsidies to
promote fe rtilizer application may then be justified in terms of positive externalities
where increased fertilizer use, higher soil fertility, and higher farm yields provide a
number of benefits to society rather than to individual farmers, discussion of
subsidies‟ potential impacts.
iii) Input profitability
Input subsidies are just one of four ways of improving the profitability of input use, the others
being. (a) Raising physical productivity of inputs (through adaptation of technologies and
farmers‟ learning how to manage them, and when and when not to use them). (b) Reducing the
costs of input purchases by increasing efficiencies (for example, in fertilizer or seed production
and/or delivery systems). and (c) Increasing output prices (with either high consumer prices or
with subsidies funded by tax payers).
iv) Input affordability
As noted earlier, access to seasonal finance is widely considered to be a major constraint on
input use on staple food crops, especially among poorer farmers(see, for example, Newberry and
Dorward,1996,2006;Dorward et al., 2005b, 2009 ). We describe this in terms of difficulties with
the affordability of inputs. In theory farmers can finance input purchases from farm savings,
from non -farm income sources, or from borrowing. However small farm households are rarely
able to save enough to fund significant intensification, and few have access to sufficient non –
farm income sources for this purpose.

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2.5 Conditions affecting effectiveness of inputs subsidies
An effective input subsidy needs design and implementations that will ensure input sub sidies
reach and are used by beneficiaries that would not otherwise use these inputs. And that they are
used efficiently and effectively to increase crop production. The design features of targeting,
rationing, entitlement and distribution systems discusse d above are intended to promote the
effective and efficiency uses of subsidized inputs. We now consider three other issues affecting
the reach, use, and productivity of input subsidies which are as follows;
i) Leakages and secondary markets
Leakages were disc ussed earlier in terms of cross -crop, cross -farmer, and cross border leakages.
These are associated with the development of secondary markets where subsidy recipients sell
their inputs (or input entitlements) to others, at prices normally discounted agains t unsubsidized
inputs. Such markets may arise with targeted and rationed subsidies as a result of differences
between subsidy recipients and non -recipients in access to and needs for working capital (with
poorer, capital -constrained farmers selling inputs to less poor farmers) and/or differences in
perceived marginal benefits to input use (with farmers with more land, for example, requirin g
larger quantities of inputs).
ii) Subsistence production and net deficit producers
This discussion of input subsidy impacts on output supply and stakeholder welfare has
considered separately the subsidy impacts on output producers and consumers, linking them
through market prices. This analysis is, of course, highly stylized. While there is evidence that
many staple food markets in southern and eastern Africa are reasonably well integrated (Abdulai,
2007), they also tend to be characterized by high margins that inhibit exchange and incentives for

12
surplus production (Barrett, 2008). This, toge ther with variable staple food prices and limited
off-farm income opportunities, leads to substantial subsistence production and very large
numbers of African farmers who are poor deficit staple food producers and net staple food
buyers (Barrett,2008). Suc h farmers are both producers who can utilize an input subsidy and
consumers who benefit from lower food prices.
iii) Complementary integration, investments and policies
Positive impacts from input subsidies are determined by the on -farm physical productivity of
inputs; by input supply system efficiency, transport and communication systems and costs; and
by output market efficiency as well as by the effectiveness and effic iency of implementation of
the subsidy programme itself. Programme impacts can therefore often be enhanced by
complementary investments in agricultural research and extension that can raise input
productivity; by subsidies for complementary inputs (for exa mple, seeds and fertilizers); and by
investments in road, communications, and market infrastructure and service development.

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CHAPTER THREE
3.0 RESEARCH DESIGN AND METHODOLOGY
3.1 Data analysis
Responses from the inte rview after being collected were coded, summarized and entered in a
Computer. Data were analyzed using software such as Statistical Package for Social Science
(SPSS) and Excel.
Descriptive assessments were employed based on the objective to be tested. For descriptive
analysis the use of f requencies, mean, percentages and other summary stati stics were employed
to describe the characteristics and trends of some data and information.
Specific objective number one the study used relationship between number of days it takes for a
farmer to acce ss the inputs from a day he/she get the vouch er. And this was assessed through
judging the number of days it takes to get the inputs from the day a voucher was issued to the
farmer. Therefore more than a month is going to be taken as inefficiency of the system and less
than a month the efficiency of the system.
Specific objective number two m ultiple regression model was used to determine effects of inputs
subsidies on the maize production. W here by frequency and means were used to determine the
effect of agricultural input subsidies on maize production in the study area. Regression model
used farm size, fertilizer and grain seeds as the independent variables and maize production as
the dependent variables.
Y = β0 + β1X1+ β 2X2+Ε
Where:

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Y= maize output
β0, β1 and β2 = regression parameters
X1, and X2 = fertilizer and grain seeds respectively
Ε = an error term.
3.2 Data required
The information required from small farmers was in terms of quantitative. Information on
accessibility of subsidized input s by smallholder farmers were measured in terms of number of
days it takes from a day a voucher was issued to the farmers till a day farmers get the inputs.
Either the study measure d effects of subsidized inputs to farmers in terms of kilograms of maize
harvested as well as in shillings they earning after selling their harvests.
3.3 Research design
The study was undertaken using Cross secti on data design because it allowed the collection of
data a single point of time. The design can be used for description purpose and as well as
determination of relationship between variables. And this method is going to be used due to
limited resources that are available for the study to be undertaken.
This study intends to look upon the r elationship between subsidized inputs a nd its contribution
on outputs. Where by output was dependent var iable and subsidized inputs was an independen t
variable. Also the study dre w attention on observing effectiveness of the ways used to distribute
subsidi es by looking on time it takes for a farmer to access inputs from a day a voucher was
issued. That is to say a study show s a relationship between number of days it takes to access
inputs as and number of days it takes for a farmers to get inputs.

15
The study use both primary data that will be collected from the fi eld and secondary data that
were presented in quant itative form. Primary data were collected by using structured
questionnaires, observation and semi -structured interviews through prepared list of q uestion.
Secondary data were obtain from various Government report on subsidized inputs, International
organizations reports, journal, articles, research papers and books written on subsidized inputs in
Tanzania and Kilimanjaro region in particular.
3.4 Res earch methodology
The study used primary data (data collected from smallholder farmers) and secondary data in
quantit ative form. Primary data were collected through observation, structured questionnaires
and semi -interview. Secondary data were obtain from various Government report on subsidized
inputs, International organizations reports, journal, articles, research papers and books written on
subsidized inputs in Tanzania .
3.5 Location of the study
The study was carried in Kilimanjaro region which is located in the northern part of Tanzania
mainland. Kilimanjaro region has six districts which are Moshi Municipal, Moshi rural, Hai,
Mwanga, Same, Ro mbo and Siha. But the study dre w attentions in Moshi Municipal distr ict
which is found in longitude 37° 45‟00‟‟East and latitude 3° 45‟00‟‟. This region has about
population of more than 1,640,087 people. Moshi municipal is located on the fertile southern
slope of Mt.Kilimanjaro at an altitude of 950 meters above the sea l evel in the north and 700
meters above the sea level in the south. The area of Moshi municipality is 58 km2. The area has
divided into three unequal parts by two permanent rivers, river Rau to the East and Karanga to
the West while Kiladeda forms the weste rn boundary. Mean annual temperature is 25 C coldest
month is July with average of 17° C and warmest months is December with the average of 34ș C

16
the region receives short rain from October to December and long rain in march to May. And
Moshi Municipal has about 120 hectare used for farming.
3.6 Sampling techniques and sample size
3.6.1 Sampling techniques
For th is study random sampling was used to select division, wards, villages and stratified
sampling techniques were use d in selecting respondents within a village. The sam pling units for
this study were smallholder farmers. Who dependent only on agriculture as their sources of
income so as to enable the study to get answers for the hypothesis from the intended respondents
And the study select ed some villages found in Moshi Municipal to undertake the study because
of limited resources such as time and finance.
3.6.2 Sample size
The study have 35 respondents who were both male and female as sample size to get points for
analysis in research also d ue to limited resources particularly fund and time allocated for the
completion of the study, sample size of 35 respondents were suitable for the st udy. The sampling
frame was the smallholder farmers in the study area.
3.7 Data collection techniques
3.7.1 Questionnaire method
The questionnaires is structured in a way that enable d the research to get keen information from
smallholder farmers on contribution of subsidies on their outputs, sources of their income to buy
the voucher, contribution of subsidies on their income, well as the effectiveness of the ways used
to distribute the subsidies. The study is going t o use primary data which were collected using
interview and questionna ires comprise d open and clos ed ended questions which were responded

17
by smallh older farmers. Secondary data were obtained from Sokoine National Agricultural
Library (SNAL) literatures. Docu mentary review, the method involve d passing through
published materials such as books, records, and research report, government reports, journal,
article and international organizations reports . Where by the information were used to
supplement the obtained data from the field.
3.7.2 Interview
This is the oral conversation between interviewer (researcher) and interviewee (respon dent)
where by interviewer used this method to ask quest ions to the interviewee who ga ve out answers
as per questi on asked. R esearcher used this method to probe f or the questions that were not
understood by the respondents t o enhance collection of intended answers from the respondents.
3.8 Logistical and Ethical Considerations
3.8.1 Logistical considerations
The study is under the department of agricultural economic s and agribusiness hence it follow the
procedure and logistics required for the res earch to be conducted. This involve informing the
Moshi Municipal council about the study by using letter from DVC Academic and ask assistance
on any useful documents pertaining this study such as statistical data of government subsidized
inputs provision.
3.8.2 Et hical considerations
It seems that many respondents fear to give out important information but this study as it aim ed
to be used for academic pu rpose it ensure d confidentiality for the information provided by the
respondents. And to eliminate such feeling from the respondents this stu dy decided that
respondents were not required to give information that would made them to be identified

18
examp le they were not ask names in questionnaire . Therefore this study position ed itself on a
safe side from suffering any harm from the whole research process in terms of results from the
respondents.
3.9 Pre -testing/ Piloting study
3.9.1 Validity
To en sure validity, the study applied two approaches of data collection which are semi structured
interview, and semi structure d questionnaires. The dat a collection instruments were structured in
a way that enable d a researcher to collect data which measure d feelings, attitudes and views of
the respondents pertaining effects of subsidized inputs on maize outpu ts. And the efficienc y of
the approaches used to supply those inputs to the farmers. Whereby issues explained in a
conceptual framewor k were used to compared with the answers from the field through
questionnaires. Where by in the end of the study enable d a researcher to ensure validity and
statistical analysis such as correlation.
3.9.2 Reliab ility
To enable a researcher to collect reli able data, researcher de velop ed the interviews and
questi onnaires in such a way that follow ed all necessary procedures o f developing these tools.
Which enable d to collect data that answer ed the objectiv es of the study and this was ensured by
the project supervisor who e xamine d the questionnaire before collection of the data. Also quotes
from interview and statement from the questionnaires w ere used as the references to ensure
reliability.

19
CHAPTER FOUR
4.0 RESULTS AND DISCUSSION
4.1. Characteristics of respondents
4.1.1. Gender of respondents
Table 1 show the distribution of households who were interviewed in the survey area. The results
indicate that out of 35 respondents 17 were male, 48.6 % .Whereby out of them 42.9% were
users and 5.7% were non users of subsidies. Female were 18, which account for 51.4% out of all
respondents and 40.0% of them were users and 11.4% wer e non users of subsidies. The diversity
in percentages between male and female in the study area depicts that women are more involved
in taking subsidies than men and this is due to the prescribed conditions made by the government
for some special groups i n the society to be given priority including women . And this indicates
that government instructions were followed in these villages.
Table 1: Gender of respondents
Gender Subsidy user Percentage
subsidy users Non subsidy
Use Percentage non
subsidy users
Male 15
88.2%
2
11.8%
Female 14
77.8%
4
22.2%
Total 29
82.9% 6
17.1%
4.1.2 Age of respondents
The age of respondents ranged from a minimum age of 29 year to a maximum age of 90 years
with a mean of 46 years of age (Table 2). The age of interviewed farmers according to the data
below (Table 3) verify that people who are involving in agriculture are adults. And this situation

20
can be not ed for the policy makers to advice government to increase incentives in agriculture
sector so as to motivate youth to engage in agriculture activity.
Table 2: Age of respondents in the study area (Years)
Item N Range Minimum Maximum Mean Median

Age 35 61 29 90 46.46 45

Table 3.Age categories of respondents
Categories Frequency Percent

21-30 5 14.3
31- 40 16 45.7
41 above 14 40.0
Total 35 100.0

4.1.3. Education level of farmers
Table 4 Shows that most (54.3%) of the respondents had primary level education and 31.4% are
secondary education level. This is a bit different when compared to farmers in rural areas whose
education level varies from none to primary education. Therefore t he farmers in the study area
have potential to develop and expand their production by adopting new agricultural technologies.

21
.Table 3: Education of respondent
Frequency Percent
Not been at school 5 14.3

primary school 19 54.3

secondary school 11 31.4
Total 35 100.0
4.2. Type of subsidies received.
In facilitating maize production in the county the government of Tanzania aimed at providing
subsidies to small scale farmers on fertilizers, seed, pesticides and other. However, the results in
table 5 show that 100% of the all 39 farmers who have received input subsidies received only
fertilizer and improved seed with no pesticide or any other input subsidies.
Table 4: Type of subsidies received by farmers
Item No. of farmers Received subsidy Percentage of farmers
received Subsidy
Fertilizer 29
100%
Improved seed 29 100%
Pesticides 0 0%
Other subsidy 0 0%

4.3. Quantity of inputs received
The amounts of fertilizer bags recommended to be undertaken per household are not more than 2
bags of 50kgs in which one of them is planting fertilizer and the other one is top dressing
fertilizer. The results show farmers have received the mean of 2 bags of subsidized fertilizer (50
kg each) and 6.6 kg of improved seeds. However, there are farmers that received more than 5
bags of 50 kg of fertilizer and/or more than 10kg of seeds while other received only one bag of

22
fertilizer and/or less than 10 kg of im proved seed. This was due to fraud and favoritism which
was against the recommendation that farmers should receive 10kg of improved seed and 100 kg
of fertilizer.
Table 5: Bags of Fertilizer received by farmers
Number of fertilizer bags
received Frequency Percent
1 9 28.9%
2 11 34.2%
3 4 13.2%
4 3 21.1%
8 2 5.3%

Table 6: kilograms of improved seeds received by farmers
Subsidized Input Frequency Percent
Improved seed 100 kg 29 82.9

Fertilizer 10 kg 29 17.1

Total 29 100
4.4. Extent use of subsidized inputs
About 97.1% of the subsidized input users have indicated that, the extent of inputs use in the past
three years increased while 2.9% of them indicated that the extend of input use remained the
same due to the subsidies provided by the government to be in small quantities than the
requirement (Table 8). No farmer has indicated decline in the use of inputs due to subsidies

23
Table 7: Rate of inputs use for farmers received input subsidies
Frequency Percent
Valid

Increased 27 97.1

remained the
same
Decreased 2

0
2.9

0

29 100
Among 29 input user, more than half (52.3%) of the fertilizer applied was subsidized by the
government and 42.5% of the seeds used by farmers was the improved seeds subsided by the
government.
4.5. Effect of subsidy on maize production
Most of the respond ents had a farm size between 0.25 to 3 acres of land. Table 9 shows that
Farmer‟s average yield per acre was 7.75 and 8.66 bags for subsidy users in 2011/12 and
2013/14 respectively. While non -subsidy users had average of 6.32 bags which is equal to
(632kg s) and 6.78 bags which is equal to (678kg) bags per acre in 2011/12 and 2013/14
respectively, however median is similar for subsidized input user and non -users in 2011/12 and
there a slight difference (1 bag) in 2013/14 between users and non -users of subsi dized inputs.
This minor difference is due to fact that subsidized inputs are not enough compared with the
demand of farmers. Other reasons such as poor farming methods and poor tools used in
cultivation and equivalence in farm size are the rea sons for thi s small difference.

24
Table 9: Acreage Maize yields in 2011/12 and 2013/14 for users and non -users of subsidized
inputs (in bags)
Item Range Minimum Maximum Mean Median
Acreage Yield for
users in 2011/12 7 5 10 7.75 6
Acreage yield for
non users in
2013/14 7 3 11 6.32 6
Acreage yield for
non-users in
2011/12 7 5 12 8.66 9
Acreage yield for
non-users in
2011/12 4 3 7 6.78 7

Regression analysis show maize yield is determined by the use of subsidized inputs by 92.8%
(R2 = 0.928). However fertilizer and improved seed are the factors which led to significant
impact on the yield obtained by the farmers. This outcomes of subsidy users seemed not to be
significant different from subsidy non -user due to the fact that subsides provided by the
government are not enough. T his led to the differences on output between subsidy users and non –
users to be very small and mostly is influenced by farm size rather than fertili zer and improved
seed. Generally inputs subsidy have an effect on maize if it will b e provided accordingly to the
intended goal and follows all procedure stipulated in the program.
The unstandardized coefficient β 1 (0.400) means that for each one kg of improved seed increased
there is 0.400 increase maize yield bags. Unstandardized coefficient β 2 (0.987) means that for
each one kilogram of subsidized fertilizer there is 0.987 increase in bags maize yield. This was
insignificant at (p>0.05).

25
Table10. Regression results (significant if p<0.05)
Rate of inputs use Unstandadized β Signi ficance level (p)
Constant ( β0) 2.116
Quantity of subsidized
fertilizer received ( β1) 0 .400 0.059
Quantity of improved
seeds received ( β2) 0.987 0.001

The constant value 2.116 represents the amount of the total yield whic h is not explained by the
model. Further, Table 11 indicates response of respondents on their opinions to, If whether maize
yield has increased, decreased or remained the same after introduction of fertilizer and improved
seed subsidy in the area . Most (2.9%) of them indicated that maize yield has remained the same
since they started to use subsidized inputs since produced 500 kg to 1000kgs which is almost
equal to what they were producing before beginning receiving subsidies, w here by before
receiving of subsidies 60% of the respondents were producing 500 kg to 1000kg.
Table 11: Yield changes due to the use of subsidized inputs
Frequency Percent
Increased
Remained the
same
Decreased 28

1
0
97.1

2.9
0
Total 35 100.0

26

4.6 Accessibility of subsidies by smallholder farmer
According to the respondents interviewed showed that there were difficulties for farmers to get
access to the government subsidies since involves many procedures like registration, approved,
payments, as well as follow up on day of the delivering but either another problem is late
delivery of the inputs where by about 48.7% indicate that subsidies takes more than a month to
be delivered from a day a voucher was issued while 34% said it take less than five days to access
the inputs from a day a voucher was issued. Where by this late delivery indicate inefficiency of
the ways of distribution used to distribute the inputs. The table below shows the response of the
respondents on the efficiency of means of subsidies delivering.
Table 12: Accessibility of subsidies by smallholder farmers
Category Frequency Percent
More than 5 days but
Less than a month 12 34.3
More than a month 17 48.6
Not receiving 6 17.1
Total 35 100.0

4.7. Uses of maize produced by household
Generally 62% of all farmers sold their maize output while 38% of them did not sell their
produce. However the amount of total maize produced is mostly consumed by the households
(more than 55%) compared to what had been sold (less than 45%). (Table 13) Table 8:
Quantit ies of maize sold and consumed at home by households in 2012/13 and 2013/14

27
Table 13 : Uses of maize produced by household
Average of maize sold/consumed 2012/13 2013/14 2014/15
Sold By subsidy user 4.6 4.73 38.01 %
Consumed By subsidy user 7.5 7.72 61.99%
Total 12.1 12.45 100%
Sold By non -subsidy user 4.6 4.4 43.40%
Consumed by non -subsidy user 6 6.18 56.60%
Total 10.6 10.58 100%
4.7. Income from maize
In 2013/14 maize price was very low as a result of oversupply of maize in the country and the
export burn which lead to the fall in income of the farmer‟s even if production of maize
increased. But in year 2014/2015 Figure 1 below shows that majority (54%) of respondents
experienced increase in income from selling maize. Only 10% indicated that income from maize
has decreased as a result of use of subsidies. The increase in income from maize sales was
associated with high demand of maize in a neighbor country of Kenya this led to the ris e of
maize price in the market.
Figure 1: Changes in household’s income due to the use of subsidies in year 2014/15

28

4.8. Income from other activities
Most farmers in urban areas are engaging themselves in several income generating activities
other than farming. Some of them are employed in different organization, civil servants, others
are entrepreneurs. Despite the fact that maize is a major crop produced in the study area, other
crops such a s tomato, beans, vegetable and sell of livestock have a s ignificant contribution on the
total income generated by farmers. All together other economic activities contribute more that
75% of income generated by famers (Figure 2).
Table 14 : income from other economic activities
Item Range Minimum Maximum Mean Median
subsidy users
maize income in
2012/13 966000 0 966000 215818 260818
Non subsidy users
maize income in
2012/13 650000 0 650000 234512 334633
Subsidy users
maize income in
2013/14 766080 0 766080 207636 207100 10% 55%
35%
0%10%20%30%40%50%60%
Decreased Increased Remain the same

29
Non subsidy users
maize income in
2013/14 564000 0 564000 212554 94000

Figure 2: Proportion of maize income on the total household income

4.9. Problems associated with input subsidy in the study area
According to respondents interviewed the major problem is the little amount of subsides and the
distribution system used to supply subsidies. Farmers claims that the distribution of subsides is
not according to the recommendation of the government where some households have manage d
to receive more than 2 bags of fertilizer and 10 kilogram of seeds. The distribution system is very
bureaucratic and cumbersome especially during registration for those who will be given priority
in accessing subsidies which discourages most of farmers t o use subsidized inputs .Where by
62.9% of the respondents interviewed said that it takes more than a month from a day voucher
was issued to a day they get access to the subsidies , as shown in table 5.8 which indicate
inefficiency of the system used to sup ply subsidized inputs . On the other hand 99.9% of farmers 75%
25%
0%10%20%30%40%50%60%70%80%
income from other activities income from maize
Household's income in percentage

30
said that the amount of subsidies provided is very little as compared to their requirement in order
to improve their production. 77% of respondents argued that the amount of money they
contributed is still very high and some of them were unable to contribute such amount hence they
did not receive subsidies. Inputs do not reach at the right time with respect to the cultivation
season. Late delivery of input to farmers makes the subsidy program someho w useless to most of
farmers as they receive sub sidies very late in the season s.
4.10. Preliminary findings from the field.
On the preliminary analysis of the qualitative research, in some villages where the voucher was
distributed somehow according to the guideline of the programme as directed by the government,
the farmers and key stakeholders mentioned that there was positive impact of agricultural input
voucher where recipient farmers have increased maize production and increased income and
improved liv ing, while in other villages this impact is really unseen because of the corruption
where the benefits of the voucher were captured only by powerful people, such as government
officers, village voucher committees, agro -dealers and financially -able farmers. In the latter case,
the implementation is influenced by power and corruption.
In the villages where vouchers were distributed to farmers mostly according to the guideline,
recipient farmers in Moshi municipal district increased maize production substanti ally. On
average they have had about 5 or less bags of maize per acre before the programme. But with the
voucher they could have about 10 to 15 bags per acre, depending on the weather, places, and
their production practices.
Because of increased productio n the life of farmers in the villages was improved after the
program introduction, e.g. enough maize now for their own consumption as food, improvement

31
of the house either from mud to bricked, or thatched roof to cement, buying beds, mattress, and
bicycles, paying school fees for their children.
But there are several issu es that might have hindered the effective impact of voucher on maize
productivity and poverty.
Firstly is the late delive ry of vouchers. Vouchers have ca me late in agricultural season in the area
in 2012/13 and 2013/14, which made sometimes difficult the use of inputs for farmers and made
less use of inputs. The farmer s who had already planted with f irst application of fertilizers by the
time of delivery of vouchers sometimes use the fertilizer and seeds for next year.
The second is about targeting. Imple mentation of targeting criteria for beneficiaries of vouchers
and farmers‟ knowledge about targeting criteria slightly differ among villages, which sometimes
made targeting of vouchers to the people who wer e not intended by the program .
The third is incre ase of input price. The input market price increased so much since 2011/12,
meanwhile the voucher price maintained almost the same price, which made difficult the
continuous uptake of vouchers by poor farmers and their lives. Respondents mentioned that the
reasons for increasing input prices were: exchange rate; increase of fuel prices; and that some
agro-dealers want to maximize profit in monopolistic situation
The fourth is cheating by agro -dealers. Many small agro -dealers did not have enough capital, so
that they could not deliver inputs to the area after being contracted by the government and
getting loans from the input supplier companies. And some agro -dealers have so ld either fake
fertilizers, example mixing it with sold and less amount than indicate d in the bag. District
officials in some districts in Moshi municipal and Ministry of officials informed that they have
been making monitoring visits to the villages and caught some cheating cases. And they took
appropriate action.

32
In other villages the vo uchers were used not according to the guideline provided by the
government . In some villages when the vouchers were so few, almost no farmers in the village
get vouchers except for village leaders and government officials. For example, vouchers were
captur ed firstly by the village leaders and village voucher committees, in order for them to get
more vouchers the y write the names of dead individuals or children as beneficiaries, and even
they sold vouchers to agro -dealers to get some profits. Farmers in the village know about the
situation, but they are not willing to report the situation to the government, for they say that even
higher level of government officials know the situation and even them are involved in this
situation. Farmers fear about the distur bance to come from these powerful people after they
report about the situation.

33
CHAPTER FIVE
5.0 CONCLUSION AND RECOMMENDATIONS
This study aimed to determine the extent of use of subsidized inputs among smallholder farmers
in the Moshi Municipal, to analyze the effect of agricultural input subsidies on maize production
and efficiency of the ways used in subsidies distribution. The data was collected from 35
respondents in 4 different villages using questionnaires. Frequencies, mean, and percentages
were used to measure the extent of use of subsidized inputs among smallholder farmers and to
analyze the effect of agricultural input subsidize on the maize output of the small scale farmers.
Frequencies, mean, percentages and regression model were used to measure the effect of
agricultural input subsidies on maize production . This chapter presents the conclusions and
recommendations arising from the results of the study.
5.1 Conclusions
It have been found that input subsidy especially have a significant effect on maize production
evidenced by high difference in yield per acre obtained by subsidy users and as compared to
maize production before receiving of the subsidies where by respondents show that average
production of the maize bef ore subsidies were 5 to 7 bags compare to more than 10 bags
produced after subsidies Though the difference was not that much significant because it has not
yet achieved the desired outputs per acre this maybe attributed by poor methods of distributing it,
late delivery and small quantity provided per household. However, Farm size has shown
significant impact on the output produced while fertilizers and improved seed have insignificant
contribution toward yields produced by farmers.

34
Either the study find t hat the ways of distributing subsidized inputs were not efficiency since it
deliver in hands of the farmers very late. Leading to postponement of its use for the next growing
season. T his situation led to failure of realization of pre -determined goal of th e Government.
Most farmers in the study area have engaged themselves in taking subsidized inputs, and there is
a large extend of use of the subsidized input in the farms, thus if properly applied it will lead to
great improvements in maize productivity a nd income of small scale farmers therefore inputs
subsidy provision need to be effective and efficient so as to enable farmers to increase their
production
5.2. Recommendations
Maize is essential crop for both consumption and generating household income t o most farmers.
Generally there is a need for supply of subsidized inputs at right quantity and time necessary for
increasing maize production. The government should play an important role on improved inputs
provision with involvement of different institut ions that will ensured farmers obtains inputs at
right quantity, quality, timely and with efficient channels of distribution. This will improve the
use of fertilizer and improved maize varieties that have higher yield potential than local varieties.
Since maize is a very important crop in contributing to the total household income, it calls for
improvement in the marketing systems in terms of pricing and supply control in maize
marketing. Government through various institutes and polices has to influence ma ize price, this
can be done by setting the minimum price for the sack of maize. On the other hand the
Government cooperates and stakeholders has to efficiently use maize storage facilities in order to
control supply of maize which will reduce fluctuation o f maize prices and hence stabilize farmers
income .

35
The researcher suggests that government should come up with a new system which will enable
farmers to use mobile phone to paying for the subsidies. This will allow farmers to order as much
quantity of inpu ts as what they will need for the production. While farmers will record the code
number for their transactions then government will be able to know the quantity in need by the
farmers and will be able to timely delivery of the inputs. A nd on the day of del ivering inputs
farmers will only show code number of transaction and their names used in transaction. Through
this method government to able to cut down some costs that incurs , such as farmers registration
costs. Either it will ensure farmers are paying a constant amount of money as per government
directive. Differently to the current situation which farmers are paying different amount to access
the same amount of input.
Thus the government has to manage on going challenges on programme implementation inclu de
cost control, timing of input deliveries, effective targeting of subsidized inputs, reducing
diversion and fraud, improving marketing system and market returns with complementary
investments (for example in extension, research, organic soil fertility im provement, and in
roads) , so as to improve productivity and being able to realize the predetermined goals.

36
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39
APPENDICES

APPENDIX 1
Appendix with coefficient s of subsidized input with it relation on maize production.

Model R R
Square Adjusted R Square Std. Error of the Estimate
1 .843 .928 .751 .595
a. Predictors: (Constant), wha t quantity of seed grains received in year 2014/15, wh at
quantity of fertilizer received in year 2014/15

ANOVA
Model Sum of
Squares df Mean
Square F Sig.
Regression 876.357 4 219.089 14.600 1.424227E07
Residual 345.143 23 15.006
Total 1230.5 27
a. Predictors: (Constant), wha t quantity of seed grains received in year 2014/15, wh at quantity
of fertilizer received in year 2014/15
b. Dependent Variable: what amount of maize harvested in 2014 /15

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Model Unstandardized Coefficients t Sig.
B Std. Error
1 (Constant)
Quantity of fertilizer
received in year 2014/15
Quantity of seed grains
received in year 2014/15 2.116

.400

.987 .471

.174

.246 5.292

.450

.544 .000

.059

.001

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APPENDIX 11
SOKOINE UNIVERSITY OF AGRICULTURE
DEPARTMENT OF AGRICULTURAL ECONOMICS AND AGRIBUSINESS.
My name is Gwamaka Jasson Mwakibete; am pursuing B.Sc Agricultural Economics and
Agribusiness at Sokoine University of Agriculture in Tanzania. I am currently undertaking a
research on assessing contribution of government subsidies to the smallholder farmers income in
Moshi Municipal.
Part One: General information
1. Date of survey………………………………
2. Gender
a) Male (…….) b) Female (……..) Tick appropriately

3. Age of respondents Tick appropriately
a) Less than 20 years (……)
b) 21-30 years (…….)
c) 31-40 years (…….)
d) 41 years and above (…….)

4. Marital Status Tick appropriately
a) Single (…..) b) Married (……)
5. Education Level Tick appropriately
a) Never attended formal education (…….)

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b) Primary Level (…….)
c) Secondary Level (…….)
d) Diploma Level (…….)
e) Degree Level (…….)
Part Two: Information on using subsidized inputs.
6. Do you know, what government input subsidies ? Tick appropriately
a) Yes (……)
b) No (……)
7. Do you use subsidized inputs in your farm?
A. Yes [ ] B. No [ ]
8.If yes, when did you start usi ng input subsidies provided by the government?
…………….….
9. What type of subsidized inputs do you use?
A. Fertilizer
B. Grain seeds [ ]
C. Pesticides
D. Others, specify……………………….

10.Indicate quantities of subsidized inputs that you received during the past three seasons?
(Specify units: Kg, Bags, etc)
Type of input Farming Season

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2012/13 2013/14 2014/15
Fertilizer
Seeds
Pesticides
Others (Specify)

11.Please provide information on total quantities and prices of purchased inputs or services used
during the 2014/15 farming season.
Purchase input or service Quantity (Specify units) Price in shs per unit (Specify unit
e.g. kg, day. Acre, etc)
Seeds
Fertilize r
Manure
Pesticides
Tractor hire
Hired labour
Others (Specify) –––––

12.What amount of money do you contribute per unit of each of these subsidized inputs?
13.What is the source of this money?
A. Personal income B. Loan C. Grant

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D. elative support E. Others specify………………………..…….
14.Indicate the maize acreage cultivated and quantity of subsidized inputs used in the past three
seasons?
Item Farming Season
2012/13 2013/14 2014/15
Total quantity of fertilizer use
Quantity of subsidized fertilizer
Total quantity of maize seed used
Quantity of subsidized seeds
Total quantity of pesticides used
Quantity of subsidized pesticides
15.Has the use of fertilizer increased, decreased or remained the same after obtaining
government subsidy on fertilizer? A. Increased [ ] B. Remained the same [ ] C. Decreased [ ]
16.Please provide information on maize production/yield in the following farming seasons:
Farming season Total production Yield per acre
2012/13
2013/14
2014/15
17.Indicate quantity of fertilizer used, total maize production and yield per acre before use of
subsidized fertilizer.
Item

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Total quantity of fertilizer used
Quantity of fertilizer applied per acre
Total quantity of maize produced
Amount of maize produced per acre
18.In general would you say maize yield and total production have increased, decreased or
remained the same since you started using the subsidies? A) Increased…..…
B) Decreased……………… C ) emained the same ………..
19.Do you sell maize that you produce? Yes [ ] No [ ]
20.If yes, indicate the quantity of maize produced, sold, consumed at home and given away as
well as price received in last two farming seasons
Item Farming Season
2013/14 2014/15
Quantity produced
Quantity sold
Quantity consumed at home
Quantity given away
Price received per unit of maize sold

21.Has income obtained from maize increased, remained the same or decreased with use of
subsidized inputs?
A. Increased [ ] B. Remained the same [ ] C. Decreas ed [ ]

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22. Indicate incomes for your household from sources other than maize in the 2014/15 farming
season.
Source of income Amount received (Tshs.)
Crops other than maize
Livestock
Business
Wage labour (Specify)
Remittances
23. Do you get subsidized inputs through National Agricultural Inputs Voucher Scheme?
a) Yes (………)
b) No (……….)
24. If yes, how long does it takes for you to access inputs from a da y you get a voucher?
(a) Less than 5 days (…….) (b) More than 5 days but less than a month (…….)
(c) More than a month (…….)
25.What challenges or constraints have you been facing in the use of subsidized inputs?
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Thank you for your cooperation and may God bless you.