oa Business Management Review - Income inequality between grassroots farmers and food processors: the case of Mwanza District

Volume 11, Issue 2
  • ISSN : 0856-2253



The objective of this paper is to evaluate the entire effect of the linkage between rural grassroots tomato producers and urban food processors. Based on that, the study determined the income inequality within and the two groups as a whole. Specifically, the study evaluated the nature and structure of the linkage, and established income inequality by considering the groups individually, as well as combining both groups. By the use of network analysis, the linkage has been established to be in form of product flow, information and knowledge transfer, capital flow (credit/finance) and through forms of contact and social relations. However in as much as the linkage reduces income inequality within the groups, thus alleviating poverty, as measured by Theil Index, inequality in both groups considered as a whole increases. The preliminary conclusion is that this could be a result of unfair prices paid by processors to farmers, or due to adjustment programmes that disfavour the rural area setting. The study therefore recommends that concerted efforts should be made to support farmers by investing in rural infrastructure, and assistant in farming and marketing practices.

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