Assessment of efficiency in livestock markets in Tanzania: the case of primary livestock markets in Morogoro region

MSc-Thesis in agricultural EconomicsThis study assesses marketing efficiency of primary livestock markets in Morogoro Region. A market survey of 120 livestock farmers and traders (wholesalers and butchers) from Nanenane, Mkongeni, Melela, Parakuyo and Chakwale markets in Morogoro Region was conducted to evaluate the structure, conduct and performance of the markets. Two types of structured questionnaires one for the farmers and the other for the traders were used to collect data. Informal interview of the key informants, direct observation and secondary data from the key organizations in the sector were also employed to complement the data. The data collected were analysed using structure-conduct- performance model (SCP), gross margin (GM) and regression analysis. SCP revealed that the livestock markets were perfectly competitive and somehow vertically integrated, size of capital required served as the barrier to market entry 91%. First- come/ first served was the buying/selling practice in place, sales were through usual haggling over prices without weighing the animals or standardization, livestock prices were set by farmers 56%. Producers share was high 85.45% for cattle and 61.17% for sheep and goats (small ruminants). The average marketing margins for wholesalers were 13.06% for cattle and 37.63% for small ruminants, while for butchers were 13.89% for cattle and 32.39% for small ruminants. All markets were efficient but cattle markets were more efficient than small ruminants markets. GM analysis found that, cattle farmers got highest economic profit per livestock sold and wholesalers were the last while for small ruminants; wholesalers led in economic profit and farmers were the last. It is therefore recommended that, district councils should use available media to avail information about prices of livestock to the market participants, attract many buyers to the markets, provide physical infrastructure in the markets areas, enforce a decree on the use of weighing scales in all livestock markets and financial institutions should support the sector through credit financing schemes