Impact of Agricultural Policy Fluidity on Trust Among Youth Coffee Farmers in Tanzania: An Application of Difference in Difference Method
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Abstract: The present paper assesses impact of agricultural policy fluidity on youths’ trustworthiness in abiding to contracts with private investors in the coffee sector in Tanzania. In the 2018/19 coffee season, the government provided onset directives on marketing to institutionalize cooperatives to be a sole coffee collector from farmers unlike before the 2018/19 coffee season whereby farmers groups and private traders dominated. This paper defines trust as upkeep of the agreements between youth coffee farmers (a principal) and farmers groups and private investors (an agent) to supply coffee to private investors through groups albeit regulation fluidity created loopholes for youth farmers to diverge coffee to other cooperatives. Data used were collected from coffee farmers and respective cooperatives in the Southern highland of Tanzania and the Difference in Difference (DID) method was applied to analyze the impact of agricultural policy fluidity on trust among youth coffee farmers. The results indicate that the agricultural policy fluidity deterred trust among youth coffee farmers relative to elders. The results indicate that the 2018/19 coffee marketing changes impacted the decline in coffee collection with an Average Treatment effect on the Treated (ATT) of about 18.2kg of coffee parchment among youths relative to elders. In addition, it was revealed that farmers groups (new cooperatives) which had no obligations to pay back loans experienced a boom in coffee collection relative to their counterparts. It is recommended that since agricultural investments are long term, any change in agricultural policies, laws and regulations has to have preparatory phase to allow investors, cooperatives, farmers and government units participating in the value chain to determine possible negative effects and develop strategies of mitigating such effect. Cooperatives have to work with responsible department at district level to institutionalize mistrust measures restricting farmers from selling coffee to other cooperatives. One of the measures will be restricting cooperatives from receiving coffee from non-member farmer.
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