Bargawi Cotton price fluctuations… Special I ssue No. 1 "Cotton Policies" 56 ISSN 1992-1705 Page No. 56-77 Special Edition on Cotton Policies ------------------------------------------------------------------------------------------------------- COTTON PRI CE FLUCTUATI ONS AT THE GROUND-LEVEL: ASSESSI NG THE DI FFERENCE I N I MPACT I N RURAL TANZANI A HANNAH K. BARGAWI SOAS, University of London hb19@soas.ac.uk ------------------------------------------------------------------------------------------------------- ABSTRACT Liberalisation of Tanzania’s cotton sector in the early 1990s has had mixed results, including greater exposure of cotton producers to the vagaries of the international market, partly in the form of more unstable prices. This investigation analyses the differences in experience of cotton price changes at the ground-level and the responses of different villages and the producers within them. A major aim of this work is to set the experience of commodity prices alongside other institutional and marketing changes that have occurred since liberalisation of the sector. This study relies on first-hand data collected in three cotton-producing villages in rural Mwanza and Shinyanga regions in Tanzania. The experience, amplitude and frequency of price changes and the response options and strategies available are shown to be very different in the three villages. Furthermore, within each of the villages clear distinctions between producers can be made. These differences need to be seen as a function of the changes and effects resulting from the liberalisation of the cotton sector. ------------------------------------------------------------------------------------------------------- KEYWORDS: Tanzania, Cotton, Agriculture, Producers, Price Changes ------------------------------------------------------------------------------------------------------- I NTRODUCTI ON Liberalisation of Tanzania’s export sectors, including cotton in the early 1990s has seen mixed results, including greater exposure of primary commodity producers to the vagaries of the international market. Liberalisation of the Tanzanian cotton sector was far-reaching, with input subsidies and credit removed and marketing and export of the crop put into private hands. The process and outcomes of liberalisation are discussed in more detail in section 2. Part of the increased uncertainty faced by producers has come in the form of more unstable prices, internationally as well as at the producer level and within as well as between seasons. The effect of this vulnerability to price fluctuations on national variables and on export sectors within Tanzania is now well documented. Furthermore, recent micro-level or household studies have also demonstrated the effects of commodity instability on producers in Tanzania and regarding cotton. However, for the most part research has relied on the assumption of uniform groups of producers or households and a homogenous experience of price changes within these groups. Furthermore, our aim here is to gain a better understanding of what role the current production environment plays in shaping the experience of prices across different regions, villages and producers. Research has noted the increasing differentiation in rural markets created by liberalisation policies and the failure to address this consistently. We hope to build and add to this literature by investigating the differentiated experience of prices in the post-liberalisation production climate.