Crop output allocation among smallholder farmers in Tanzania: Evidence on the subsistence–commercialisation trade-off and labour dynamics

Abstract

This study examines crop output allocation between household consumption and market sales among Tanzanian smallholder farmers along the subsistence–commercialisation continuum. Using 2022/23 Annual Agricultural Sample Survey data (n = 8,531), two fractional logit models analyse shares of output sold and consumed, with emphasis on labour composition, moving beyond binary market participation measures. Results show farmers sell 46% of output on average while reporting about 70% for consumption and related uses. These categories overlap due to storage, seed retention, transfers, and reporting inconsistencies; thus, they are analysed separately rather than as strictly complementary shares. Productive assets (farm size, output, capital inputs), hired labour, irrigation, and pesticide use significantly enhance commercialisation, while older household heads prioritise subsistence. Hired labour supports market-oriented production, whereas family labour sustains both subsistence and commercial activities. The findings support the agricultural household model by confirming non-separability of production and consumption decisions. Policy implications include improving productivity, strengthening rural labour markets, and promoting technology adoption to support inclusive agricultural transformation in Tanzania.