FARMERS' COPING STRATEGIES TO A CHANGED COFFEE MARKET AFTER ECONOMIC LIBERALIZATION: THE CASE OF MBINGA DISTRICT IN TANZANIA

Abstract

The Mbinga District of Tanzania is a major coffee production area occupied by the Matengo, who cultivate food and cash crops. In 1986, the Tanzanian government introduced Structural Adjustment Programmes, and in 1993, liberalized the coffee market. As a result, subsidies to agricultural inputs were abandoned, and the cooperative union that had been responsible for coffee production and marketing in Mbinga collapsed. At the same time, improvements to growing and processing technologies and the entry of new coffee-producing countries caused overproduction in the global coffee market; thus, the price of coffee decreased to an unprecedented level. With the excessive supply, prices remain in stagnation, but the costs of agricultural inputs continue to rise. Mbinga farmers have pushed for various policy changes regarding coffee production and the natural and social environment while making the best use of the lessens learned from their initial experiences in the new market economy. They have structurally transformed the rural economy, whereby income is generated by distributing the coffee revenue that used to be invested in business. They also have developed a risk-management strategy. In the 10 years since economic liberalization, the farmers abandoned the state system, became economically self-reliant, and modified the structure of the rural economy.