Market Assessment

Analysis of the Integration of MSEs into Value Chains, Tanzania, USAID AMAP, 2006

    The purpose of the Analysis of the Integration of MSEs in Value Chains (AIMVC) field studies is to better understand how MSEs are integrated into productive value chains and the effects of this integration on both MSEs and value chains. The outcome of this research will be important in developing strategies for promoting more effective linkages of MSEs into productive value chains.

    The primary focus of the research is to develop a better understanding of the following:
    - The factors influencing MSE owners' decisions to participate in value chains and upgrade their businesses in ways that enhance their competitiveness (i.e., real and perceived opportunities, barriers, risks, benefits, and costs)
    - The relationships between MSEs and other firms in the value chain, both vertically and horizontally
    - The effects of interfirm relationships on the structure and competitiveness of the value chain

    Tanzania is the second country to be studied under the AIMVC project. There are approximately one million smallholders engaged in commercial vegetable production and many of these are located in the cooler highland areas, which are most suitable for growing high-value export vegetables. In addition, there is ample arable land and water for irrigation in the appropriate agro-climatic areas. This value chain has been identified in several recent donor studies as having high potential for development.

    The Tanzania field study focuses on the barriers and opportunities for growth for MSEs in the horticultural sector, specifically looking at the potential for MSE upgrading and participation in the high-value export vegetables market. The survey research also looks at the effects of social capital and trust, information, and transaction costs on business relationships and decisions to upgrade. The qualitative field work, conducted in December 2005, has provided considerable background information on the horticulture value chain, the firms in this value chain, and how the firms relate to each other. The quantitative field work is currently underway, and will include almost 2,000 interviews with smallholder commercial vegetable farmers in the Northern Highlands of Tanzania. The final report is expected to be published in the second quarter of 2007.

    For additional details, see the website above. For the associated Guatemala study, see the link below.

    Associated Activities and Documents
    Market Assessment
    »Weaving MSEs into Global Value Chains in Guatemala, by Dunn and Villeda / USAID, 2005
    Synthesis Documents
    »USAID Accelerated Microenterprise Advancement Project (AMAP) BDS 2003-2007