Abstract:
Governance structure is pivotal in the performance of agri-food supply chains. It is
responsible for setting, monitoring and facilitating compliance that govern transactions
along the supply chain. Supply chain actors perform different activities pertaining to
market transactions based on their roles and responsibilities for the ultimate goal of chain.
A study was carried out to investigate influence of governance structures on the
performance of maize, groundnuts and sunflower supply chains at the emerging urban
centre of Kibaigwa in Tanzania. The study aimed at identifying the existing governance
structures, analyse the financial performance and business viability at farm gate and retail
levels, analyse the influence of supply chain governance on the performance of supply
chains and finally, evaluate factors for governance structure choices. The study used a
cross-sectional research design and structured questionnaire to gather information and data
from 291 respondents in two wards namely; Hogolo and Kibaigwa. The information and
data collected from the field survey were compiled and analysed using the Excel and IBM
SPSS 20 computer software. Descriptive statistics were summarised in tables, figures and
graphs. Gross margin analysis at farm gate and retail levels were used to evaluate the
financial performance and business viability of the selected crops to farmers and retailers.
Moreover, the multinomial logit model was used to analyse factors influencing the choice
of governance structures. The study findings show that spot market was the common
functional governance structure in maize, groundnuts and sunflower crops followed by
contractual governance structure. Integration was the least common governance structure
in the study area. This in turn implies that market transactions in the study area are less
coordinated and solemnly depending on price mechanisms. The results of gross margin at
farm gate and retail levels indicates that both production and marketing activities were
viable as indicated by the positive gross margins. The choice for informal agreement was
influenced negatively by age of the respondent and positively by cost reduction (P<0.1)
while market information influenced negatively and satisfaction influenced positively
(P<0.01). Formal agreement was influenced negatively by market information, positively
by profit sharing and satisfaction (P<0.01) while positively influenced by cost reduction
and flexibility (P<0.05). Horizontal integration was influenced positively by profit sharing
and satisfaction (P<0.01) and flexibility P<0.05) while Vertical integration was influenced
by positively by market information, cost reduction and flexibility (P<0.1). In conclusion,
the existing functional governance structure in the study area do not favour sustainable
supply chain performance. To accommodate the transaction variables in effect of the
supply chain performance in the study area, the coordinated structure that permits trust,
collaboration, integration, commitment and flexibilities need to be applied.
