Social Capital and Expenditure on Farm Inputs: A Case Study of Paddy Farming Households in Kilombero Valley, Tanzania

Abstract

Social Capital refers to the networks of relationships that are built on trust to facilitate collective action in a community. The role of social capital in enhancing various aspect of farm production has become increasingly important. This article aims at examining the effect of structural and cognitive dimensions of social capital on expenditure on farm inputs in Kilombero Valley, Tanzania. Data was collected in the 2013/14 farming season in five selected villages of the study area from 309 randomly selected households. A structured questionnaire was the main tool for data collection. Analysis involved the use a Tobit regression which considers censored dependent variable. The results shows that farm households in Kilombero have cooperative attributes based on strong ties, kinships and networks. Households with high membership density and which invest on trust relationships were more likely to have increased spending on farm inputs. The other cognitive dimension of social capital, social cohesion, is particularly relevant in ensuring farm labour availability. The results generally support hypothesis that, social capital relax farm input liquidity constraints. Formulation of rural development strategies should thus aim at promoting formation of social groups and networks, which may address input liquidity concerns.