An empirical study was undertaken to analyze economic resource constraints facing Ruembe
outgrowers’ sugarcane and paddy production scheme by measuring quantitatively scheme’s
productivity and profitability using Cobb-Douglas production function model and Gross margin.
The study adopted a quantitative study design. The empirical study was conducted at Ruembe
Sugarcane Basin in Kilosa District in Morogoro Region Eastern part of Tanzania in 2007-2008
season. However, the multistage, purposive and systematic random sampling techniques were
employed as sampling designs of the empirical study.
The empirical study found that fertilizer, labor, herbicides, land, credit and extension services are the
main determinants of the sugarcane and paddy productivity as well as profitability in the study area.
However, even though these farm inputs are the main determinants of crop productivity and
profitability, still there is under utilization of it due to the fact that most of smallholder farmers are
operating in the first region of the production function. Hence, according to the empirical findings,
the study suggested that farmers should operate in the second region of production function in orderto utilize resources efficiently so that to maximize productivity and profitability of their farm produces.
Moreover, according to the profitability of paddy enterprise found by the study, it is suggested that
smallholder farmers could adopt warehouse receipt system model so as to protect them from price
fluctuations which affect their profit.