The credit and debt dynamics of smallholder farmers of sunflower production: a case study in Dodoma region, Tanzania

Impact of credit has been acknowledged as a key factor in the rural communities regarding the alleviation of poverty and improvement of production for smallholder farmers. However, with the dark side of debt, it is crucial to analyse how the impact of credit affects agricultural sector, specifically on sunflower farmers production and their livelihoods. The study explores how credit- debt influences smallholder farmers with concerns such as the pressure that comes when farmers are indebted, reinforcement of credit discipline and involvement of sunflower farmers production. This research has adopted the three ‘theses’ on the consequences of rural indebtedness by Gerber (2014) in analysing the extent to which indebtedness increases social differentiation through changes of ownership, undermining of traditional community bond, and increasing market discipline of smallholder farmers. In, additional, the ‘moral economy of the peasant’ concept was also adopted as a framework to analyse client and patron relationship through the creditor and debtor dyad. In particular, the findings of the research indicates that credit provision has a nuanced impact on sunflower production. On one hand, it improved the farmers’ production and sale within the markets. On the other hand, the thought of defaulting increases workloads and activities in order to ensure timely repayments. Sunflower farmers have had at times, to sell their produce at lower prices and engage more in markets to meet their debt repayment obligations. A notable change in their economic lifestyle and behaviour as debtors is that they prioritize earning profit for loan repayment of loans over their leisure time. Moreover, the community bonds among families with debt have proven to encounter difficulties in maintaining solidarity. However, the research also reveals that the presence and accessibility of technology in terms of mobile phones has expanded the option for sunflower farmers to seek the digital credit loans. This means that debt is overall seen as a positive mechanism that disciplines and empowers smallholder farmers to participate in the market.