Sunflower Value Chain Enhancements for the Rural Economy in Tanzania: A Village Computable General Equilibrium-CGE Approach

Abstract

Poverty is prevalent and widespread in rural Tanzania, where agriculture is the main activity. The government is making significant public investments intended to speed the growth of agriculture as a means to accelerate inclusive economic growth. In line with public investments, the government is promoting public–private partnerships by encouraging the use of improved agricultural innovations and linking farmers to markets, seeking to increase their yields and income. However, there is a paucity of empirical evidence using multipliers analysis about the extent of how gains in agricultural productivity and market linkages for farmers in rural areas help improve the economy at the household level. This paper assesses the welfare effects of the sunflower value chain for a rural economy in Tanzania using a computable general equilibrium (CGE) model for the selected village, which has a high potential for sunflower. Findings highlight the use of the CGE model, first, for analyzing and understanding the economic sectors at a village level. Second, the effects of various upgrading strategies promoted for improving rural farming communities by the government and non-governmental development partners at the micro-scale are analyzed and potential agricultural commodity value chains identified. The multiplier analysis provided insights regarding the potential of sunflower crops for the village economy.