The Warehouse Receipt System (WRS) offers an opportunity to smallholder farmers by providing collateral guarantees to financial institutions to provide credit for agricultural inputs through their crops stored at the warehouses. The objective of this paper was to examine the contribution of agricultural inputs credit accessed through WRS on coffee farms productivity in Mbinga District, Tanzania. A household survey from a sample of 390 smallholder coffee farmers was conducted. Ordinary Least Squares (OLS) was used to examine the impact of WRS agricultural-credit on coffee yield. Study results show that credit accessed through WRS had a significant (p≤0.05) and positive influence on coffee yield. Moreover, sex, years of schooling, and extension services had a significant effect on coffee yields. The intervention policies are needed in order to enable more farmers to access the WRS services, extension services, education and increasing women's participation in WRS in the study area.
Coffee production and marketing in Tanzania faces many challenges; price and weather variability, limited access to agricultural inputs, poor extension services, lack of irrigation, lack of credit facilities and land shortage which have decreased their capacity to consistently meet the supply of quality and required quantity. Despite of the challenges, coffee continues to be the main source of income to smallholder farmers. The study explores why coffee is still the most important crop to small scale farmers in four districts despite of the challenges they face. Household survey was conducted to 189 randomly selected coffeefarmers. The study found out that despite of the production and marketing challenges, coffee farming has remained a source of reliable income, a traditional crop and cultural symbol. Conclusions are reached that gaining from coffee production provides the means of investment to other food crops.
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