1. Smallholders upgrading in local linkages: The role of institutional framework in horticultural- tourism value chain in Zanzibar BY: Winnie Nguni University of Dar es Salaam Business School The 10 th Anniversary ORSEA 2014 Annual International Conference

2. Introduction Most value chain studies have significantly concentrated on how value chain governance impacts smallholders upgrading Very little has been discussed concerning the role of institutional framework in determining upgrading opportunities for local small firms – Governance is defined as authority and power relations that determine how financial, material and human resources are allocated and flow within the chain – Upgrading is defined as a process where small producers improve their skills, knowledge and competence that enhance them to gain access to high value markets and maintain their position in them

3. Introduction – institutional framework constitutes rules and norms in which public and private organizations use in formulation and provision of infrastructure that have some implications in facilitating upgrading In addition these studies have extensively discussed smallholders upgrading in global linkages (global value chains), the knowledge pertaining to how local small producers upgrade in value chains linking two or more sectors within developing countries (local linkages) is still underdeveloped.

4. Introduction Creating and strengthening ‘local linkages’ between tourism and agriculture to minimizing substantial tourism revenue ‘leakages’ to the external market to source for agricultural goods that are also available in local market, has been a central debate in the pro-poor tourism literatures for the past two decades. To scientifically explain the persistent ‘poor’ linkages between tourism and agriculture, it is necessary to examine in depth how institutional framework facilitates smallholders to enter and improve their ability to compete in high value markets within their countries.

5. Introduction Using horticultural-tourism value chain as illustrative case, this paper explores the linkage between fresh fruits and vegetables (FFV) small farmers and tourist hotels in Zanzibar, with specific attention to the role of institutional framework in enhancing smallhoders upgrading Motivation High demand fro FFV by tourists, It is the greatest area of potential for creating and strengthening local linkages in developing countries.

6. Literature Review Institutional framework (institutional arrangements, institutional environment, institutions, institutional capacity) – Regulative institutional framework encompasses legislation and government regulations and policies that companies can use and/or have to comply with. – Normative institutional framework is embedded in business practices, business policies and ethical standards. – Cognitive institutional framework reflects the way people interpret and make sense of the world around them on the basis of rules and schemata.

7. Literature Review Upgrading – Smallholders upgrading in agro-food GVCs should be examined through lenses of balance between rewards and risk structures Seven types of upgrading – Process upgrading – Product upgrading – volume upgrading – functional upgrading – functional downgrading – improve value chain coordination – inter-chain upgrading This paper is concerned with examining the role of institutional framework and its potential and barriers for FFV smallholders upgrading and their access to tourist hotels’ market in Zanzibar. and whether its influence in creating local linkages is increasing or decreasing rewards for small producers in developing countries.

8. Methodology Qualitative approach. Purposive and snow ball sampling. In-depth interviews with hotels, intermediaries and farmers in the value chain and focus group discussions with other farmers. In additional a key informant from farmer association and government agencies was interviewed. Observation and audio recording of the conversations Documentary review (secondary source of info.)

9. Findings and Conclusion

10. Demand for FFV by tourist hotels is high but there is weak institutional support to upgrade small farmers to access the market – Inefficiencies of farmers organisation – Limited access to agric. extension services – Limited access to financial market e.g banks, insurance – The input market is weakly regulated by the government – Policy for tourism development has failed to stimulate agricultural development in the country.

11. Recommendation To improve efficiency of farmer organizations, To improve agric. Extension services, Government need to correct specific input and output market failures and work together with the private sector in the course of providing appropriate expertise and support to small farmers the overall master plan for tourism development should be integrated with those of agricultural development.

12. Recommendation

13. Thanks! Thanks!