Impact of Smallholder Farmers' Agricultural Credit Guarantee Scheme on Rice Productivity in Tanzania

Strategic Insights -

A recent study by researchers from Moshi Co-operative University has shed light on the critical factors influencing rice productivity in Tanzania. The research emphasizes the significance of agricultural technologies and access to credit for smallholder farmers in enhancing rice productivity. The Smallholder Farmers Agricultural Credit Guarantee Scheme (SCGS) implemented by the government and development partners has shown promising results in increasing rice productivity among participating farmers.

Key Takeaways:

  • The study found that rice productivity in Tanzania averages 2.2t/ha, significantly lower than the global average of 4.5t/ha.
  • The primary challenge to increasing rice productivity is the limited adoption of agricultural technologies, mainly due to restricted access to credit.
  • The Smallholder Farmers Agricultural Credit Guarantee Scheme (SCGS) was implemented to address these challenges by providing guarantees to financial institutions to extend credit to smallholder farmers.
  • The study used endogenous switching regression (ESR) and propensity score matching (PSM) techniques to analyze the impact of SCGS on rice productivity, demonstrating that smallholder farmers who participated in SCGS experienced a 25% increase in productivity.
  • Factors such as gender, land ownership, farm size, savings, improved seeds, and fertilizers significantly influence rice productivity.
  • The study concluded that SCGS had a significant positive impact on rice productivity, with participants experiencing a 25% higher productivity than non-participants.

Statistics:

  • Average rice productivity in Tanzania: 2.2t/ha
  • Global average rice productivity: 4.5t/ha
  • Estimated ATT (Average Treatment Effect): 25% increase in rice productivity among participants
  • Counterfactual scenario: smallholder farmers who participated in SCGS would have produced 8% less without participation
  • Additional scenario: smallholder farmers who did not participate would have produced 5% more if they had participated

Sources:

  • Impact of smallholder farmers' agricultural credit guarantee scheme on rice productivity in Shinyanga and Iringa regions, Tanzania. Discover Agriculture, 2025,3(1):1-26. Publisher: Springer. Available at https://doi-org.sdpl.idm.oclc.org/10.1007/s44279-025-00351-z
  • Agriculture Week. October 23, 2025; p 419. NewsRx LLC.