Impact of International Trade on Coffee Industry: The Case of Kagera Region in North-West Tanzania

Rutashoborwa, Paschal Mtarabirwa H. (2013) Impact of International Trade on Coffee Industry: The Case of Kagera Region in North-West Tanzania. Masters thesis, The Open University Of Tanzania.

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Abstract

The impact of international trade causes challenges on the coffee industry. These challenges include: the increase in the running production costs in coffee industry and low level of application of inputs. The collected data were verified, coded and analysed by using statistics analysis, the least square method and time series analysis in the form of linear equation to reveal that there is increased import dependency that makes the price of the foreign currency to be highly demanded, hence increasing the running production costs in the coffee industry. This linear equation gives the economic relationship between the exchange rate for foreign currency and domestic currency, and that the running production costs in coffee industry increases as the required inputs in coffee industry are imported at a very high price, and therefore to cause the decline in production of coffee. In order to revive coffee industry, import dependency must be reduced by utilizing fully the available resources. The strategy that would reduce the adverse impact of international trade and improve the price of coffee, availability of agricultural inputs, replacement of aged coffee tree, proper management of coffee farm activities, economic infrastructures, as well as, the provision of credit to alleviate the financial constraints to import the capital goods in coffee industry at the fair exchange rate. The strategies would then include economic diversification and the adoption of the indigenous technology and innovation by applying the natural pesticides and organic fertilizer like dung manures to reduce the adverse impact of international trade. Also, the government should exploit gas-utilization at capacity to enable the coffee processing industries to reduce the importation of oil, the approach that would reduce import dependency in coffee industry

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