Underpinning the key proposition of this study is that raising productivity among cane outgrowers in Tanzania is limited by the industry’s characteristics of production and incomplete intermediary organization. While the existing intermediary organizations have to some extent helped in reducing transaction costs and uncertainties, such transaction cost-reducing functions are necessary but not sufficient for raising productivity and for enhancing efficiency under the current environment of global competition. Horizontal coordination to enable economies of scale and professional production management is crucial for raising productivity at the primary production level.
