Integrative and Exclusionary Roles of Trust in Timber Value Chain in the Southern Highlands of Tanzania

Abstract

Contract and trust are the two main governance mechanisms that influence actors’ integration into value chains. Nevertheless, most studies treat trust as a complement to formal contract, paying less attention on the circumstances in which trust becomes a sole mechanism of governance. The aim of this article is to examine how trust shapes integration in the non-industrial timber value chain in the Southern Highlands of Tanzania. Timber, which is the pillar of the districts’ revenue in the area, contributes significantly to the income of smallholder households. The study adopted an exploratory cross-sectional study design whereby data were collected mainly through in-depth interviews and focus group discussions with actors of the timber value chain. The findings showed that spot market and relational governance were the two main linkages in the timber value chain. Spot market linkage is characterized by absence or little trust, while some trust is present in relational linkage. In relational linkage, trust helps integration of actors in the value chain through enabling them access market information, capital in the form of credit, technology for processing timber, and coordination and collaboration among the actors. However, trust is associated with some challenges and to some actors, it plays an exclusionary role. The study recommends for the promotion of trust along with other social control mechanisms such as social knowledge in order to address these challenges.

Keywords:

• trust
• timber
• value chain
• integration
• Tanzania

Notes

1 Experience shows that in Tanzania contracts arrangements that involve smallholder farmers (for instance contracts in sugarcane, cotton, sisal, tobacco, and sunflower production) were initiated by contracting firms, farmer organizations and development agents. NIPF is a new phenomenon in Tanzania thus; tree grower organizations are at an infancy stage. In addition, firms that buy timber products rely on government plantations regarding NIPF as their secondary source of sawn timber. However, this research did not explore how tree growers and contracting firms perceive contracts in timber business. This suggests another study to explore the perceptions of actors of timber value chain regarding the needs of written contracts in timber business.

2 Based on FDT (Forest Development Trust) (2015) baseline survey that indicated total land size owned by tree growers, those with less than 5 acres were regarded as small, 5–20 acres as medium and more than 20 acres as large tree growers (FDT, 2015, p. 17).

3 In the context of this paper long term relationship was intuitively regarded to be three years and above.

4 In this paper, supplying timber on credit was regarded as timely payment if the agreed period of payment was observed. In situations where the agreed period of payment was not honoured, this was regarded as delayed payment, an indication of low trust.

5 The association was found in 2009 thus at the time of this research it had nine (9) years of existence. This implies that in order to join the association a new member was supposed to pay 59,000 TAS (USD 39.3). Those who wanted to become members of the association perceived this amount as unaffordable.

Additional information

Funding

This work was supported by Danida Fellowship Centre [Grant Number 16-P02-TAN] project titled ‘Timber Rush: Private Forestry in Village Land’ implemented in the Southern Highlands of Tanzania.

Notes on contributors

Respikius Martin

Dr. Respikius Martin is a Lecturer in the Department of Agricultural Extension and Community Development at Sokoine University of Agriculture. He holds a PhD in Rural Development that was pursued as a sandwich program between Sokoine University of Agriculture (SUA) Tanzania and the University of Copenhagen, Denmark. Besides, Dr. Martin holds MSc Agricultural Extension from SUA Tanzania, MS Rural Sociology from Ohio State University, United States of America (USA) and BSc. Agricultural Extension from SUA, Tanzania. His area of specialization is Agricultural Extension and Rural Development. His research interests are agricultural value chains, food security and food system, contract farming, application of Information Communication Technologies (ICT) in agriculture, and gender issues in agricultural development.