Abstract:
Migration and remittance have a potential to enhance farm intensification through spending on
essential farm inputs and thus apparently improving farm production for liquidity constrained rural
farming households. This study was conducted to investigate the effect of remittance derived from
rural out-migrants on the expenditure on farm inputs using paddy dominated farming households of
Kilombero Valley, Tanzania, as a case study. A questionnaire was used to collect data among 309
randomly selected households. The tobit model that considers cornered observations was used to
assess the effect of migration and remittances on input expenditure. A T test was conducted to
compare differences in input spending between migratory and non migratory households. Results
show that remittances overcome inputs market failure as it provides cash that rural households use
to purchase essential farm inputs. However, the results based on the T test revealed that there is
no significant difference in terms of spending on hired labour (as one of a farm input) between
migratory and non migratory households. The positive income effects of remittances outweigh lostlabour
effects. It is thus recommended that migration should be encouraged through the growth of
economy and thus the link between rural and urban areas should be strengthened.
