The challenge of intermediary coordination in smallholder sugarcane production in Tanzania

Orthodox approaches to development view the market as a key institution for driving economic transformation and for fostering innovation and competitiveness. The working of markets alone, however, does not always lead to improved outcomes such as increase in productivity or production efficiency in the context of smallholders. The role of non-market institutions, therefore, remains important. This paper examines the role of intermediary coordination in addressing constraints to efficiency and productivity of smallholder sugarcane producers in Tanzania. It also makes a contrastive analysis of a different organisational arrangement for smallholder sugarcane producers in Malawi. The key proposition is that while intermediary organisations of cane outgrowers in Tanzania have played a significant role in promoting effective market linkage, an increase in productivity required for competitiveness is limited by the lack of effective horizontal coordination.