Value Chain Analysis of the Cotton Market in Tanzania: Application of structure-Conduct-Performance (SCP) Model

Using field data from the western cotton growing areas, this discussion paper applies Structure-Conduct-Performance Model to assess the value chain of the crop with a view to identifying competition issues along the entire cotton value chain in Tanzania. Several actors in the cotton subsector were identified along each of the main five nodes of the value chain addition vis input supply, production, buying, processing/ginning and export marketing. The structure, conduct and performance of the cotton market are strongly regulated, and only partially liberalized. However, the assessment on the other hand analyzed a number of opportunities from the economies of scale that have shown that cotton production has a significant profit-margin to the market actors. There is equally ample room for improvement by capitalizing on the advantages pegged on the contract farming, organic cotton production and new low cotton producing areas