ABSTRACT
Tobacco is a remunerative cash crop for smallholder farmers in Urambo District, Tanzania, as well as in many other regions of the world. This chapter analyses which tobacco farmers obtain the inputs on credit and which buy them for cash. Increased production and productivity of the agricultural sector is seen as an essential element of any strategy to stimulate the economic growth of any productive region. In agricultural production, expenditure on inputs usually occurs during the planting and growing period of the crops, while returns are received several months later after harvest. Agricultural credit is normally provided in cash, but some programmes provide in-kind loans for agricultural inputs such as seed, fertiliser and other farm production inputs. Contract farming arrangements have the potential to facilitate the modernisation of poor smallholder farmers’ production technology because they address several challenges faced by smallholder farmers.
