Determinants of Smallholder Farmers Demand for Inputs: A Case of Paddy Growers in Kilombero Districts Morogoro

Publication Date : 03/07/2021

DOI : 10.22623/IJAPSA.2021.7005.UTFRW


Author(s) :

Franco J. Mbegallo , Ezekiel Kanire , Consolata Lukuvi.


Volume/Issue :
Volume 7
,
Issue 6
(07 - 2021)



Abstract :

Demand for input is derived from the production process and demand for the product being produced, and when the demand for product increases the most notable outcome is the increase in price and demand of the inputs until the equilibrium price and production number are met. Thus, the demand for all factors of production, including labor is derived demand as the demand for the factors of production is dependent on the demand for the outputs they produce. A farmer as rational producer they are theorized to maximize financial returns thus they would demand the amount of inputs that maximizes return, and the profit maximization occurs when the marginal costs of the last unit of input applied is equal to the value of the marginal return. In Kilombero district; Agriculture is one of the most important economic activity employing about 75% of the labor force, the district is one of the most important productive districts for paddy in Tanzania as it is one of the largest paddy producers in the region although the yield is persistently observed to be lower (average to 2 ton/ha) compared to other major rice producers in other districts, the low yield is said to be attributed by dependence on rain-fed agriculture and the use of local tools such as hand hoe and traditional practice. The study employed a cross-sectional survey designs and is built around the Neoclassical theory under the perfect competition model and the theory of the firm, where a farmer (firm) is assumed to be a rational producer that seeks to maximize profit from its production activities. The derivate of translog function concerning a factor input was obtained and the results in the cost share of purchased factor input in total cost was established and reported. Results show that both prices of pesticides and fertilizers portray a positive relationship with the share of fertilizer and a negative relationship with the share pesticides, Household size portrays a positive relationship with both share of fertilizer and pesticides. There is also a positive relationship between an income of the and amount of fertilizer purchased as one percentage increase on the income of the producer will increase the cost-share allocated for fertilizer while reducing the cost share for pesticides by the same amount. Policy measures such as intervention on the output and input market by the state that will increase the availability of inputs for farmers production are expected under situation and also land reform that encourages farm to increase the purchase for fertilizer should be adopted to improve the productivity of paddy in Kilombero districts


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