Determinants of Profitability in Orange Production Under Smallholder Farming in Muheza District, Tanzania
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ABSTRACT: This study aimed at assessing determinants of profitability in orange production among smallholder farmers in Muheza district. Data collected from 97 randomly selected farmers through structured interview and unstructured interview. Other methods used were observation and documentary review. Both descriptive and inferential statistics were used to analyze collected data. The profitability from orange estimated using the farm enterprise budget analysis. A multiple linear regression based on Ordinary Least Square (OLS) estimation approach employed to test relationships between variables whereby the gross margin per acre used as a proxy for orange profitability. The average gross margin per acre was TZS 1,754,990. Size of orange farm, education level, quantity of orange produced, price of oranges and access to the market information significantly (p<0.05) influenced the profitability of orange farming. Cost of production was also significant at p<0.05 but displayed a negative relationship to the profitability. The study concluded that orange production in the study area is a highly profitable enterprise. Furthermore, the study concluded that there are positive and significant relationships between farm size, access to market information, quantity of orange produced, price of orange and education level of the respondents and profitability while there was a significant but negative relationship between cost of production and profitability. The study recommends that there is a need for policy-makers and Government to make appropriate and good policy which would create conducive environment for investor to make investment of small scale industry which could make juice from oranges, this will create a permanent market chain from the orange growers to the final consumers. Consequently, profitability will increase due to readily available market. Moreover, improvement in extension services and formation of farmers groups may lead to high yield and good bargaining power for market price.