The results are discussed based on the main research question which was trying to find out what are the roles of contract farming organizations in facilitating smallholder farmers to access privatized advisory soil testing services.
This section will elaborate what is the implication of the findings and reference is made to literature reviewed and other researchers’ findings. The farmers’ livelihood assets, transforming policies and processes, soil testing advisory services and vulnerability context in crops are discussed in relation to contract farming in northern Tanzania.
5.1 Farmers’ livelihood assets
5.1.1 Importance of testing soils
Soil is the major natural capital among farmers’ assets which is the basic media used by smallholder farmers to produce various crops for consumption and sell. The use of this capital over time in producing crops may require conservation strategy to maintain its nutrition status(Ellis, 2000). The importance of testing soils has to be considered in order to maintain the value of soils and crop production. Natural capital is not static as being confined for gathering products for survival as it was in the past rather it should be enhanced and improved under human control in order to increase productivity (Ellis, 2000).
According to the findings, the majority of the smallholder farmers from four different contract farming organization are aware of the importance of testing soils (Table 2). They clearly enumerate a number of reasons including the status of the soils, to know the type and correct amount of fertilizers to be used, to know how to maintain soil health for productivity and make it sustainable in production as being noted by FAO (2014). All eight contract farming organizations are aware and know the importance of testing soils (Table 9). The majority of contract farming organizations are not using soil testing advisory service due to many reasons like no availability of reliable service(FAO, 2012). When farms produce low yields farmers shift to another fertile land (FAO, 2001). The area left will not produce better yield even for the food crops due to the destructions and accumulation of industrial fertilizers (Horneck, et al., 2011). In Tanzania including the northern part of the country as agricultural production yields for food crops like maize is averaging below 1 t/ha contributed by factors like declining of soil fertility, soil and water loss through erosion (Shetto; Owenya, 2007).Only one contract farming organization is using soil testing advisory service where they access it in Nairobi, Kenya where the service is more reliable (Table 9).
5.1.2 Willingness to pay for soil testing advisory services
The financial capital refers to the reserve of money a household has access to, as well as credit and loans and other economic assets (Ellis, 2000). Smallholder farmers showed willingness to use their financial assets to pay between 21,000/= to 30,000/= Tanzanian shillings for the soil testing advisory services(Ellis, 2000). Being a comparative advantage the smallholder farmers are eager to do changes in their farms using soil testing advisory services (Davis, 2003). In Tanzania people are aware of paying advisory services these days although during the Socialism period most services were provided free of charge by the Government (Wobst, 2001). Few respondents wanted contract farming organizations to guarantee them in paying for the service while many smallholders wanted to pay in cash to avoid their money to be deducted during of selling their crops to the organizations.
The majority of contract farming organizations are willing to pay between 41,000/= to 50,000/= Tanzanian shillings. Very few contract farming organizations whose smallholder farmers own small plots of sunflower oil seed production in central Tanzania wanted to pay under 10,000/= Tanzanian shillings (Table 4). In Arumeru, Arusha where horticultural crops are grown by smallholder farmers the size of farms owned by majority ranges from 1 acre to 2 acres and size of land owned by few smallholder farmers may go above 7 acres (Table 7). This is in line with the statement of a smallholder farmer in horticultural crops in northern Tanzania that their farms have an average size of 1-2 acres (roughly 0.5 – 1 ha), although some may have gone up to 4 ha (MAFC, 2013).
5.1.3 Smallholder farmers access to loans
According to the findings (Table 4) there are Savings and Credit Co-operative Societies (SACCOS),Village Community Banks (VICOBA) and credit organizations in Arumeru district which support its members for loans to improve their lives. Few smallholder farmers are members of both credit organizations while the majority are not members due to various reasons such as lack of commitment and scarcity of credit organizations in some areas of the district (Maghimbi, 2010; Masanyiwa, 2014). The social groups who live in the area are diverse with different religious denominations. It implies that when social groups and networks are built among members of the same ethnic or religion on trust it is likely they will undertake collective action together (Masanyiwa, 2014).
5.1.4 Non availability of recommended fertilizers in near stores
The findings in table 5 show the majority of smallholder farmers will abide with the recommendations of the soil testing analysis through ordering fertilizers and other inputs themselves. The smallholder farmers will benefit from the recommendations and improve their crop production rather than continue applying the national blanket recommendations(IFPRI, 2012).Some rely on their contract farming organizations to supply them and a very few who do not abide with the recommendations and all together it counts for 55% of uncertain farmers. In Tanzania the country imports large amount of Nitrogenous fertilizers annually for instance in 2010 the importation was 58% metric tonnes which composed of Urea (IFPRI, 2012). Most fertilizers available in the agricultural shops are Nitrogenous which accessed by smallholder farmers to use in their farms (IFPRI, 2012).It is a challenge for smallholder farmers to follow and apply the recommendations even after they receive soil testing advisory service for them. It is not an automatic action as many smallholder farmers with fertile farms tended to apply less nitrogenous fertilisers as application of such fertilisers is done when a farmer observes the change of colour of plat leaves to yellow which is an indication of nutrient deficiency (Nkonya, Schroeder and Norman, 1997). Smallholder farmers required to be supplied with correct fertilizers with effective techniques in soil management (MAFC, 2013). According to World Bank (2012), ‘small holder farmers does not follow soil testing advisory services because they follow the national blanket recommendations’.
5.2 Transforming policies and Processes
5.2.1 Contracts and agreements
In Arumeru district the contracts between smallholder farmers and contract farming organizations are prepared in Swahili and signed with the condition on the farmers to use their land and labour to produce crops to the organizations while supplied with inputs by the organizations. Supplied inputs includes fertilizers, insecticides, fungicides and basic seeds where the price for selling the products is predetermined beforehand (MAFC, 2006). Another contract type is the verbal agreement done between the two smallholder farmers in the sense that one of them has already signed the contract with contract farming organization. This implies that in Tanzania the definition of contract farming is often confused because there are so many different types of contracts and actors like private sector firms, public sector firms and parastatals, international aid agencies (MAFC, 2006). In other parts of the world like in India Contract farming has three scenarios (i) procurement contracts under which only sale and purchase conditions are specified; (ii) partial contracts wherein only some of the inputs are supplied by the contracting firm and produce is bought at pre-agreed prices; and (iii) total contracts under which the contracting firm supplies and manages all the inputs on the farm and the farmer becomes just a supplier of land and labour (Sing, 2004).
5.2.2The policies regarding private soil testing advisory service
Very few contract farming organization has the policy compatible to the soil testing advisory services (Table 9). Those who do not have this policy are planning to include it in their programmes in the future pertinent to the availability of the reliable service in the country. Other policies include provision of agriculture inputs like fertilizers, basic seeds insecticides and fungicides and extension advisory services (MAFC, 2006). Other agreements include pre-harvest, provision of inputs agreements marketing on a pre-harvest agreement between producers and contractors on the conditions governing the sale of the crop/animal (MAFC, 2013). The contract farming organizations inspect production processes and specifies input usage as part of its extension advisory services (Singh, 2004). The organization not only provides a market outlet for the products but also the key inputs under credits, the cost of which is recovered upon product delivery (Bijman, 2008).