The Effect of Vertical Coordination on Enhancing Production and Securing Reliable Supplies for Processing: Evidence from Sunflow-er Producers and Processors in Tanzania

Vertical coordination mechanisms are used in the agricultural and food industries to align production with processing activities. Recognizing the importance of this alignment, the study aims to investigate how different forms of vertical coordination influences sunflower production and sup-ply reliability for processing. This contributes to a more detailed understand how different vertical coordination has implications across different actors (producers and processors) in sunflower value chain. Both quantitative and qualitative data were collected through semi-structured interviews with sunflower producers and processors across the three regions of Morogoro, Dodoma, and Singida in Tanzania. A two-stage, proportional stratified method was used to select 204 sun-flower producers and 96 processors for interviews in a cross-sectional study. The descriptive results indicate that only 19.12% of sunflower producers achieve optimal yields, while only 16.7% of processors secure reliable processing supplies. A binary probit model was employed to analyses the effect of vertical coordination on enhancing sunflower production and processing supply reliability. The binary probit model results indicate that contract-based vertical coordination and in-formal vertical coordination, were positively associated with the probability of achieving sunflower yields and reliable sunflower supplies for processing. By contrast, market-based co-ordination was negatively associated with the probability of achieving sunflower yields and reliable sunflower supplies for processing. Network coordination was also positively associated with the probability of achieving reliable sunflower supplies for processing. However, vertical integration, in which processors own their own sunflower farms, was negatively associated with the probability of se-curing reliable sunflower supplies for processing. Therefore, this study recommends strengthening contract-based vertical coordination, informal-based vertical coordination, vertical coordination networks, and vertical integration through processors' own sunflower farms for policy implications.