The development and significance of smallholder tea growing in Tanzania

Rapid growth has taken place In the smallholder tea sector in Tanzania. The Introductory chapter discusses the economic aspects of development of a newly introduced export cash crop in a low income country and goes further to introduce the theme of the study. The second chapter reviews the World Tea situation. It examines the impact of uncontrolled expansion of tea production on world tea prices in the absence of effective demand and discusses the role that ITA might play in maintaining favourable world tea prices. Chapter three traces the historical development and success of the tea industry in Tanzania and especially smallholder tea production, a crop originally thought to be suitable for estates only. The developmental aspects of foreign exchange generation, provision of rural employment and income are highlighted. The production function of tea is revisited in an attempt to include real producer price index in the function. This relaxes the earlier assumption of constant prices and concludes that whereas the constant price assumption was realistic at the time of earlier studies of the Kenya smallholder tea industry, in the wake of rising inflation and fall in real producer price earnings, it is important to incorporate the price indices as an additional variable while calculating yields in Tanzania. The study concludes with some suggestions on improving yields for smallholders following the rapid expansion of the tea area and increased maturity of the tea bushes over the last twenty years