Effects of Cotton Market Instability on Primary Agricultural Marketing Co-operative Societies

Abstract

This paper assesses the effects of cotton market instability on Agriculture Marketing Co-operative Society (AMCOS) in Tanzania. Specific objectives of the study were to examine the effect of instability of cotton farmers' revenue in AMCOS, evaluate the effect of decline in cotton farmers’ income in AMCOS, investigates the effect of cotton market instability in AMCOS, and analysing the factors contributing to cotton market instability. To gather data for the study, 207 respondents from ten AMCOS in Meatu District were interviewed. Questionnaires and interviews were the methods of data collection used. Descriptive statistics and inferential statistics were used to analyse data. The findings of the study reveal that market instability is directly related to fluctuations in crop prices, a decline in cotton production, and a poor input supply system, which in turn leads to poor crop quality. These factors significantly impact the prices and hence revenue that cotton farmers receive. Therefore concluded that, the existing cotton market leads to instability in AMCOS. The instability in revenue and decline in income lead to cotton market instability. Six factors have been concluded to contribute significantly to market instability and they include competition with other crops, low demand in the world market, low price levels, poor climatic conditions, poor input supply, and low production levels. This study recommends that AMCOS should provide up-to-date educational support to its members to enhance their understanding of the activities required to produce high-quality crops. There should be an emphasis on increasing cotton production through the effective use of extension services and the adoption of improved quality inputs. Finally, the government should continue to revise agricultural policies to address the issue of inadequate input supply, thus mitigating the risk of low production. This paper provides insights into cotton market instability ending interventions.