Sunflower Price Differentials Attributed to the Disparity of Traditional Cost Accounting and Conventional Methods in Tanzania

Godfrey Molela; Mohamed Baraza; Lukelo Msese; Mohamed Kaluse; Felix Mlay

doi:doi:10.11648/j.jfa.20210904.11

| Peer-Reviewed

Sunflower Price Differentials Attributed to the Disparity of Traditional Cost Accounting and Conventional Methods in Tanzania

Godfrey Molela, Mohamed Baraza, Lukelo Msese, Mohamed Kaluse, Felix Mlay

Published in Journal of Finance and Accounting (Volume 9, Issue 4)

Received: 11 January 2021 Accepted: 18 January 2021 Published: 6 July 2021

Views: Downloads:

Download PDF

Share This Article

Twitter
Linked In
Facebook

Abstract

Sunflower is among the key cash crops in Tanzania, which contribute significantly to the country’s economy. As it is the case for other crop subsectors, sunflower is also grown in abundance by smallholder farmers. Nevertheless, they had been living in poverty throughout their careers in agriculture which on the other hand benefited the counterparties in the trading deals. The unfair price offered to sunflower farmers was discovered in this study to be a misfortune in their investments. The conventional average farm-gate price of TZS. 622.449/Kg was found to be out of the price ranges that were backed by traditional cost accounting system, leaving farmers making losses of minimum TZS. 99.889/Kg. This study was conducted in Singida Region, Tanzania where a sample of 206 household farmers was used to obtain primary data on activity costs while the secondary data concerning the conventional price were obtained from the Districts’ sales reports and farmers’ records. Inferential statistics with one-sample test model was used alongside the IBM SPSS 26.0 statistical package in the quantitative data analysis. It was recommended, further studies to be conducted to explore more about the production cost that is backed by the activity-based costing (ABC) system, as it is more effective in assigning overheads to cost object than the traditional costing.

Published in	Journal of Finance and Accounting (Volume 9, Issue 4)
DOI	10.11648/j.jfa.20210904.11
Page(s)	111-116
Creative Commons	This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.
Copyright	Copyright © The Author(s), 2024. Published by Science Publishing Group

Keywords

Smallholder Farmers, Sunflower, Farm-Gate Price Range, Conventional Price, Traditional Cost Accounting, Activity-Based Costing (ABC)

References

[1]	Anderson, J., Marita, C., & Musiime, D., 2016. National Survey and Segmentation of Smallholder; Understanding Their Demand for Financial, Agricultural,. Working Paper, 1 - 118.
[2]	Antonaci, L., Demeke, M., & Vezzani, A., 2014. The challenges of Mananging Agricultural Price and Production Risks in Sub-Saharan africa. ESA Working Paper No. 14 - 09, 14 (09).
[3]	Bennett, A., 2014. Users Guide to Gross Margin Analysis. https:dpipwe.tas.gov.au (accessed 4 March 2020).
[4]	Borad, S., 2019. Cost – Costing – Cost Accounting – Cost Accountancy. eFinanceManagement.com (accessed 4 March 2020).
[5]	Bragg, S., 2018. Traditional Costing. Accounting Tools: Accounting CPE Courses & Books. accountintools.com (accessed 5 March 2020).
[6]	Courtois, P., & Subervie, J., 2014. Farmer Bargaining Power And Market Information Services. American Journal of Agricultural Economics, 97 (3).
[7]	Davenport, H., 1919. Farm Products and Costs Accounting. Journal of Political Economy, 27 (5), 354 – 361.
[8]	Drury, C., 2017. Management and Cost Accounting (10^th ed.). Cengage Learning. United Kingdom.
[9]	Fisher, T., 2012. Cost Accounting Applied to Farming in Southwest Michigan. Honors Theses, 2320.
[10]	Gaille, B., 2018. 13 Traditional Costing System Advantages Disadvantages. Brandongaille: Small Business and Marketing Advice. brandongaille.com (accessed 5 March 2020).
[11]	Harper, J., Cornelisse, S., Kime, L., & Hyde, J., 2019. Agricultural Alternatives: Budgeting for Agricultural Decision Making. PennState Extension, United States.
[12]	Horngren, C., Datar, S. & Rajan, M., 2018. Cost Accounting: A Managerial Emphasis (15^th ed.). Pearson Education, Inc. United States of America.
[13]	Huang, Q., 2018. Skylar, Inc.: Traditional Cost System vs. Activity-Based Cost System – A Managerial Accounting Case Study. Applied Finance and Accounting, 4 (2), 55 – 66.
[14]	Massinda, N., 2017, June 30. Annual Report: 2016 - 2017. Annual Report.
[15]	McCombes, S., 2019. Descriptive Research. coursehero.com (accessed 10 March 2020).
[16]	Missouri Economic Research Center and Information Center, 2016. Economic Contribution of Agribusiness. Department of Economic Development. Missouri, United States of America.
[17]	Mkenda, B. K., & Campenhout, B., 2011. Estimating Transaction Costs in Tanzanian Supply Chains. Working Paper, 11 (0898), 1 - 48. https://www.theigc.org (accessed 8 March 2020).
[18]	Mkonda, M. & He, X., 2016. Efficacy of Transforming Agriculture for Survival to Commercial Agriculture through ‘Kilimo Kwanza’ Initiative in Tanzania. Natural Resources and Conservation, 4 (4), 43 – 50. Doi: 1013189/nrc.2016.040401.
[19]	Molela, G., 2017. Capital Markets Financing for Agricultural Business Development in Tanzania; A Case of Cocoa Farming in Kyela and Rungwe Districts. Journal of Entrepreneurial Finance, 18 (5).
[20]	Namwata, B., & Baha, M., 2018. Producer Empowerment and Market Linkage: Sunflower Subsector. The United Republic of Tanzania: Prime Minister's Office, Market Linkage Value addition and Rural Finance. Dodoma: Mellon Consults (T) Ltd.
[21]	Mwang’onda, E. S., Mwaseba, S. L., & Juma, M. S., 2018. Industrialisation in Tanzania: The Fate of ManufacturingSector Lies upon Policies Implementations. International Journal ofBusiness and Economics Research, 7 (3), 71-78.
[22]	National Bureau of Statistics (NBS), 2016. National Sample Census of Agriculture. Dar es Salaam: The United Republic of Tanzania (URT).
[23]	Ndondole, E., 2014. Sunflower Value Chain Development in Tanzania: The case of SHADECO in Village Based Contract Farming Arrangement in Iringa Region –Tanzania. A Presentation at Multi-Stakeholder Conference on Agricultural Investment Gender and Land in Africa. Capetown- Rsa, 5-7 March 2014.
[24]	Njiku, A., 2019. Determinants of Technical Efficiency and Financial Sustainability of Small Scale Sunflower Oil Processing Firms in Tanzania. PhD Thesis, Mzumbe University. Tanzania.
[25]	Nkonya, N., & Cameron, A., 2015. Analysis of Price Incentives for Cashew nuts in the United Republic of Tanzania 2005 – 2013. Food and Agriculture Organization of United Nations. Rome.
[26]	Osterhaus, E., 2019. Financial Management: How to run a Gross Margin Analysis for your Small Business. quickbooks.intuit.com (accessed 6 March 2020).
[27]	Rural Solutions SA, 2015. Farm Gross Margin Guide 2015: A Gross Margin Template for Crop and Livestock Enterprises. https://grdc.com.au/Resources/Publications (accessed 9 March 2020).
[28]	Russo, C. & Goodhue, R., 2017. Farm-gate Prices, Retail Prices and Supermarkets’ Pricing Decisions: An Integrated Approach. Agribusiness: Wileyonlinelibrary.com, 34 (3), 24-43.
[29]	The United Republic of Tanzania, 2016. Tanzania Sunflower Strategy 2016 – 2020. Retrieved from www.mit.go.tz.
[30]	Tripathi, A., 2019. Profit Maximization Theory and Value Maximization Theory. International Journal of Scientific Development and Research (IJSDR), 4 (6), 284 – 289.
[31]	Zhihua Zeng, D., 2011. The Sunflower Sector in Tanzania – A Great Potential for Industrial Competitiveness. Retrieved from www.tzdpg.or.tz.

Cite This Article

Plain Text BibTeX RIS

APA Style

Godfrey Molela, Mohamed Baraza, Lukelo Msese, Mohamed Kaluse, Felix Mlay. (2021). Sunflower Price Differentials Attributed to the Disparity of Traditional Cost Accounting and Conventional Methods in Tanzania. Journal of Finance and Accounting, 9(4), 111-116. https://doi.org/10.11648/j.jfa.20210904.11

Copy | Download

ACS Style

Godfrey Molela; Mohamed Baraza; Lukelo Msese; Mohamed Kaluse; Felix Mlay. Sunflower Price Differentials Attributed to the Disparity of Traditional Cost Accounting and Conventional Methods in Tanzania. J. Finance Account. 2021, 9(4), 111-116. doi: 10.11648/j.jfa.20210904.11

Copy | Download

AMA Style

Godfrey Molela, Mohamed Baraza, Lukelo Msese, Mohamed Kaluse, Felix Mlay. Sunflower Price Differentials Attributed to the Disparity of Traditional Cost Accounting and Conventional Methods in Tanzania. J Finance Account. 2021;9(4):111-116. doi: 10.11648/j.jfa.20210904.11

Copy | Download

@article{10.11648/j.jfa.20210904.11,
  author = {Godfrey Molela and Mohamed Baraza and Lukelo Msese and Mohamed Kaluse and Felix Mlay},
  title = {Sunflower Price Differentials Attributed to the Disparity of Traditional Cost Accounting and Conventional Methods in Tanzania},
  journal = {Journal of Finance and Accounting},
  volume = {9},
  number = {4},
  pages = {111-116},
  doi = {10.11648/j.jfa.20210904.11},
  url = {https://doi.org/10.11648/j.jfa.20210904.11},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jfa.20210904.11},
  abstract = {Sunflower is among the key cash crops in Tanzania, which contribute significantly to the country’s economy. As it is the case for other crop subsectors, sunflower is also grown in abundance by smallholder farmers. Nevertheless, they had been living in poverty throughout their careers in agriculture which on the other hand benefited the counterparties in the trading deals. The unfair price offered to sunflower farmers was discovered in this study to be a misfortune in their investments. The conventional average farm-gate price of TZS. 622.449/Kg was found to be out of the price ranges that were backed by traditional cost accounting system, leaving farmers making losses of minimum TZS. 99.889/Kg. This study was conducted in Singida Region, Tanzania where a sample of 206 household farmers was used to obtain primary data on activity costs while the secondary data concerning the conventional price were obtained from the Districts’ sales reports and farmers’ records. Inferential statistics with one-sample test model was used alongside the IBM SPSS 26.0 statistical package in the quantitative data analysis. It was recommended, further studies to be conducted to explore more about the production cost that is backed by the activity-based costing (ABC) system, as it is more effective in assigning overheads to cost object than the traditional costing.},
 year = {2021}
}

Copy | Download

TY - JOUR
T1 - Sunflower Price Differentials Attributed to the Disparity of Traditional Cost Accounting and Conventional Methods in Tanzania
AU - Godfrey Molela
AU - Mohamed Baraza
AU - Lukelo Msese
AU - Mohamed Kaluse
AU - Felix Mlay
Y1 - 2021/07/06
PY - 2021
N1 - https://doi.org/10.11648/j.jfa.20210904.11
DO - 10.11648/j.jfa.20210904.11
T2 - Journal of Finance and Accounting
JF - Journal of Finance and Accounting
JO - Journal of Finance and Accounting
SP - 111
EP - 116
PB - Science Publishing Group
SN - 2330-7323
UR - https://doi.org/10.11648/j.jfa.20210904.11
AB - Sunflower is among the key cash crops in Tanzania, which contribute significantly to the country’s economy. As it is the case for other crop subsectors, sunflower is also grown in abundance by smallholder farmers. Nevertheless, they had been living in poverty throughout their careers in agriculture which on the other hand benefited the counterparties in the trading deals. The unfair price offered to sunflower farmers was discovered in this study to be a misfortune in their investments. The conventional average farm-gate price of TZS. 622.449/Kg was found to be out of the price ranges that were backed by traditional cost accounting system, leaving farmers making losses of minimum TZS. 99.889/Kg. This study was conducted in Singida Region, Tanzania where a sample of 206 household farmers was used to obtain primary data on activity costs while the secondary data concerning the conventional price were obtained from the Districts’ sales reports and farmers’ records. Inferential statistics with one-sample test model was used alongside the IBM SPSS 26.0 statistical package in the quantitative data analysis. It was recommended, further studies to be conducted to explore more about the production cost that is backed by the activity-based costing (ABC) system, as it is more effective in assigning overheads to cost object than the traditional costing.
VL - 9
IS - 4
ER -

Copy | Download

Author Information

Godfrey Molela

Department of Accounting and Finance, The University of Dodoma, Dodoma City, Tanzania
Mohamed Baraza

Department of Accounting and Finance, The University of Dodoma, Dodoma City, Tanzania
Lukelo Msese

Department of Economics, The University of Dodoma, Dodoma City, Tanzania
Mohamed Kaluse

Department of Accounting, Tanzania Institute of Accountancy, Singida Region, Tanzania
Felix Mlay

Department of Business Management, Institute of Accountancy Arusha, Arusha City, Tanzania

Download PDF

Sections

Plain Text BibTeX RIS

APA Style

Godfrey Molela, Mohamed Baraza, Lukelo Msese, Mohamed Kaluse, Felix Mlay. (2021). Sunflower Price Differentials Attributed to the Disparity of Traditional Cost Accounting and Conventional Methods in Tanzania. Journal of Finance and Accounting, 9(4), 111-116. https://doi.org/10.11648/j.jfa.20210904.11

Copy | Download

ACS Style

Godfrey Molela; Mohamed Baraza; Lukelo Msese; Mohamed Kaluse; Felix Mlay. Sunflower Price Differentials Attributed to the Disparity of Traditional Cost Accounting and Conventional Methods in Tanzania. J. Finance Account. 2021, 9(4), 111-116. doi: 10.11648/j.jfa.20210904.11

Copy | Download

AMA Style

Godfrey Molela, Mohamed Baraza, Lukelo Msese, Mohamed Kaluse, Felix Mlay. Sunflower Price Differentials Attributed to the Disparity of Traditional Cost Accounting and Conventional Methods in Tanzania. J Finance Account. 2021;9(4):111-116. doi: 10.11648/j.jfa.20210904.11

Copy | Download

@article{10.11648/j.jfa.20210904.11,
  author = {Godfrey Molela and Mohamed Baraza and Lukelo Msese and Mohamed Kaluse and Felix Mlay},
  title = {Sunflower Price Differentials Attributed to the Disparity of Traditional Cost Accounting and Conventional Methods in Tanzania},
  journal = {Journal of Finance and Accounting},
  volume = {9},
  number = {4},
  pages = {111-116},
  doi = {10.11648/j.jfa.20210904.11},
  url = {https://doi.org/10.11648/j.jfa.20210904.11},
  eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jfa.20210904.11},
  abstract = {Sunflower is among the key cash crops in Tanzania, which contribute significantly to the country’s economy. As it is the case for other crop subsectors, sunflower is also grown in abundance by smallholder farmers. Nevertheless, they had been living in poverty throughout their careers in agriculture which on the other hand benefited the counterparties in the trading deals. The unfair price offered to sunflower farmers was discovered in this study to be a misfortune in their investments. The conventional average farm-gate price of TZS. 622.449/Kg was found to be out of the price ranges that were backed by traditional cost accounting system, leaving farmers making losses of minimum TZS. 99.889/Kg. This study was conducted in Singida Region, Tanzania where a sample of 206 household farmers was used to obtain primary data on activity costs while the secondary data concerning the conventional price were obtained from the Districts’ sales reports and farmers’ records. Inferential statistics with one-sample test model was used alongside the IBM SPSS 26.0 statistical package in the quantitative data analysis. It was recommended, further studies to be conducted to explore more about the production cost that is backed by the activity-based costing (ABC) system, as it is more effective in assigning overheads to cost object than the traditional costing.},
 year = {2021}
}

Copy | Download