Characteristics and Spillover Effects of Medium-Scale Farms in Tanzania

Although medium-scale farms are more prevalent than large-scale farms in many sub-Saharan African countries, much less is known about their interactions with, and influence on, small-scale farms. In Tanzania, medium-scale farms are more likely to use modern techniques and inputs and to market their output, suggesting a potential for spillover effects for their smaller-scale neighbors—particularly if they attract local agribusiness investments. We consider the population of small-scale farms in Tanzania and ask whether agricultural behaviors and outcomes are affected by the local prevalence of medium-scale farms. Using pooled OLS and household fixed-effects models, we find evidence that small-scale farms are more likely to use improved seed, to cultivate more of their landholdings, and to receive agricultural extension in the presence of more medium-scale farms. This points to positive synergies from mixed scales of farming in a given locality.