Analysis of Market Decentralization and Its Effects on Poverty Reduction in Smallholder Farmers: A Case of Periodic Markets in Dodoma Municipality”

Abstract

This study aimed at analyzing periodic markets in relation to decentralization and it effects to poverty reduction and also assessing perception of farmers towards periodic market infrastructures set by local government authorities (LGAs) in three wards (Msalato, Makutupora and Hombolo) of Dodoma municipality. Two types of analysis were carried out by this study; qualitative (descriptive) analysis and quantitative analysis (binary logit analysis). A binary logit analysis examined the poverty incidence in farmers and multiple response analysis (scoring method) was used in assessing the perceptions of farmers towards periodic market infrastructures.

The study fails to accept the null hypothesis because results show a perfect relationship between smallholder farmer’s characteristics and poverty reduction in decentralised markets. The probability of households being in poverty in relation to households characteristics found to be significant at p<0.1 and p<0.05. The data further show that households income generated through selling of crops and livestock in periodic markets had a positive relationship with poverty levels (β= 0.901), this implies that households which sold crops and livestock had a higher probability of not being poor.

It is the conclusion of this study that the overall functional efficiency of agricultural marketing is depended upon a comprehensive national/local marketing policy framework which recognizes the production realities and potentiality of the local economy, improvements in transport infrastructure, market information flows and marketing institutional structures are a pre-requisite for successful agricultural trade and marketing.

Keywords: Market decentralization, poverty reduction, smallholder farmers, periodic markets