Abstract:
Warehouse Receipt System (WRS) was officially introduced since 2005 with the pilot
crops of coffee and cotton in some areas such as Ruvuma and Mwanza as a response to
farmers’ income instability due to price fluctuations resulting from liberalisation and in
actual use since 2007. The study objective was to assess the effect of Warehouse
Receipts System for Economic Welfare of Smallholder Cashew nut Farmers in Mtwara
District, Tanzania with its specific objectives that were to determine the impact of
Warehouse Receipts System on farmer’s income improvement, examine the effect of
Warehouse Receipts System on smallholder cashew nut farmer’s accessibility to
markets, examine the impact of Warehouse Receipts System on the improvements of
quality cashew nut produced and Determine the challenges facing smallholder cashew
nut farmers on adapting Warehouse Receipts System. The study employed cross-section
design where the study was conducted at once in Mtwara district and it used the sample
size of 302 farmers. Multi stage sampling technique was employed to select five wards
where the study used the systematic sampling to obtain representative sample. Survey
questionnaire and interview method was also employed to obtain quantitative and
qualitative data. Multiple regression models were also used to assess the effects of
Warehouse Receipts System for Economic Welfare of Smallholder Cashew nut Farmers
in Mtwara District. Pilot study was conducted to test research instruments employed.
The study revealed that WRS brought improvement to farmers income through
accessing financial institutions and insurance services. It was also found that the key
and vital role played by WRS such as accessing farmers to advanced storage facilities,
well packaging materials had improved the quality of cashew nut produced in spite of
some challenges that WRS had and eventually farmers’ income have increased to some
extent. It was also revealed that delaying in payments and being paid for instalment was
not satisfied the farmers. Age of the respondents, family size and the land size owned
was found to have significant impacts to farmer’s economic welfare. The study
concludes that farmers value WRS in its role which ultimately benefits farmers by
increasing income that leads to improve living standard but the unethical behaviour of
operators reduces the trust of WRS. The study recommended to policy makers including
stakeholders like farmers, AMCOS and CBT to deal with the aspects of markets, price
setting, post-harvest losses and challenges facing farmers accordingly.