Abstract:
This paper focuses on the nature of contractual arrangements among vegetable traders of
Lushoto district using new institutional economics. The study employed a cross-section
research design. Purposive sampling followed by Institutional sampling Economics. followed
by systematic sampling technique was used to select vegetable trading centres and traders
respectively. The sample consisted of 78 traders participating in vegetables supply chains.
Descriptive statistics were used during data analysis. The study identified two buying
arrangement. These were spot market which involved buying at the farm gate or using village
open markets and another arrangement was by using brokers situated at the villages. It was
found that, a large number of traders dealing with distant dynamic markets contract village
transport broker and. farm gate buying was more preferred to village open market. Using the
prevailing governance system, both product and process upgrading were possible however very
low upgrading initiatives were evidenced. It is also important to highlight that, in term of
policy, this imply that it is very important for public private partnership to improve village road
networks so as to increase market access. Moreover, more action researches are needed in order
to improve vegetable quality and information relating to vegetable upgrading so that traders
join profitable vegetable chain and hence be able to alleviate poverty.
