The impacts of tobacco processing companies’ financial support of primary societies on rural development in the major tobacco growing area of Tabora Region

Description

Abstract:

This thesis investigates the impacts of tobacco processing companies’ financial support of primary societies on rural development in the major contract farming tobacco growing area of the Tabora Region. To do so the theory of Global Value Chains is employed, as the concepts of governance and upgrading provides a focus on the whole chain, illustrating how the lead firms type of coordination influences the way in which the chain is coordinated, along with the involved actors ability to upgrade.

In this thesis the notion of upgrading has been modified, based on concepts from the theory of Global Production Networks. This is to incorporate the actions by, and the horizontal interaction between, the local community and the production process. Like so, the notion of institutions and local agency is incorporated into the upgrading framework. It has been found that community level dynamics, here the implementation of buyer-financed development initiatives, influences both the living standards of the local community and the production process. Particularly the importance of local agency and its significant influence on the utilization of the initiatives has been found. The thesis shows how a mobilization of local agency, through a community-internal democratic process, significantly enhances the impacts of the buyer-financed development initiatives. Horizontal interactions between the local community and the production process are hereby shown to also influence the process of upgrading. Interactions the conventional upgrading framework does not incorporate as it focuses only on vertical chain-internal processes coordinated by the lead firm.

The impacts of the buyer-financed development initiatives are profound, seeing that both buyers and sellers benefit from it. The buyers use the initiatives to obtain a more compliant production process and to retain their business. In turn the sellers gain improved local living conditions, increased community coherence and increased productivity. The increased productivity facilitates a win-win situation. The potential of buyer-financed development initiatives is huge, yet it seems that low competition could be a pre-condition for their success. Also, because they are privately driven, the deployment of initiatives rests on significantly different selection criteria, compared to state-driven development, as these favour the more powerful communities. This implies that privately driven development initiatives can only be a supplement to state-driven development.