A comparative economic analysis of tobacco and groundnut farming: a case study of Urambo district, Tabora region

Tobacco farming is well established as the traditional cash crop in Tabora region. However, in recent years, groundnut is one among the cash crops which have been introduced in the area as an alternative source of income for smallholder farmers. Using 2007/2008 cropping season survey and the data from 121 randomly selected smallholder farmers from three villages, this study provides a comparative economic analysis for tobacco and groundnut farming systems. The analysis of quantitative and qualitative data from the survey was done by using Cobb-Douglas production function, gross margin analysis, independent sample t-test, and descriptive statistics such as frequency and multiple responses. The results of the study indicate that gross margin per acre for groundnut was lower than that of tobacco by 569 231.90 Tshs. Gross margins and household’s income contribution by the two crops were tested using independent t-test, and revealed a significant difference with the P-value of < 0.007 and P-value