How Middlemen Influence Crop Prices in Tanzania

Middlemen commonly known as madalali, are some of the most powerful actors in Tanzania’s agricultural value chain. For many smallholder farmers, they are the first and sometimes the only link to profitable markets. Yet their dominance also shapes how prices are set, how bargaining works, and how much farmers ultimately earn from their hard work.

Understanding the role of middlemen is essential to improving market fairness, reducing farmer vulnerability, and building a more efficient agricultural economy. Below is a clear breakdown of how middlemen influence crop prices across Tanzania.

1. The Positive Role of Middlemen

Despite their reputation, madalali do play important roles that help keep the supply chain functioning.

They provide quick cash and immediate liquidity

Most farmers urgently need money after harvest for food, school fees, or input repayment. Middlemen step in with instant payment, filling a gap left by formal buyers who usually delay.

They coordinate transport and aggregation

Middlemen handle the logistics of collecting crops from scattered rural areas. They pool produce from many farmers, making it viable for traders, processors, exporters, and wholesalers to buy in bulk.

They reduce transaction costs for remote farmers

In areas far from major markets like Dar es Salaam, Arusha, or Mbeya, farmers lack transport options. Middlemen solve this by buying at the farm gate, eliminating the cost and risk of traveling long distances with perishable produce.

In short, middlemen offer convenience, speed, and market access especially in villages where formal market systems are weak.

2. Price Distortion Risks

While middlemen provide value, their pricing practices often disadvantage farmers.

Unilateral price setting

Because many farmers have no alternative buyers, middlemen often dictate prices. This is especially common during peak harvest seasons when supply is high, and farmers need fast cash.

Buying low and selling high

Madalali take advantage of urgent selling conditions. They buy cheaply from villages, then sell at much higher prices in major markets such as:

• Kariakoo (Dar es Salaam)
• Buguruni (Dar es Salaam)
• Kibaigwa (Dodoma)
• Soko Kuu (Mwanza)

Their markup can range from 20% to over 60%, depending on crop type and storage costs.

Farmers bear the biggest losses

The price gap between farm gate and urban markets is wide, but farmers benefit the least because they lack bargaining power.

3. Lack of Market Information

Middlemen thrive largely because farmers lack access to price data.

Limited access to real-time market prices

Most farmers rely on verbal updates or rumors from other traders. Without knowing actual prices in neighboring districts, they cannot negotiate effectively.

Information asymmetry strengthens middlemen

When a middleman says, “Bei imeanguka leo,” (prices have dropped today), many farmers cannot verify it. This information gap keeps them dependent on middlemen's offers.

If farmers could easily check prices from markets in Morogoro, Shinyanga, Mbeya, or Dar es Salaam, their bargaining power would greatly increase.

4. Post-Harvest Losses as Leverage

Middlemen also exploit farmers’ fear of losing crops after harvest.

Farmers lack proper storage facilities

Most smallholder farmers rely on basic, low-capacity storage that cannot preserve crops for long. Perishables like tomatoes, onions, bananas, and leafy vegetables spoil quickly.

Middlemen use time pressure to negotiate lower prices

Knowing that a farmer cannot store produce for even a week, middlemen push prices down: “Ukiweka mpaka kesho, itaharibika niuze kwa bei hii sasa.”

Community storage can break this cycle

Investments in:

• Village warehouses
• Solar-powered cold rooms
• Cooperative-run grain storage facilities

can reduce post-harvest losses and weaken middlemen’s bargaining advantage.

5. The Way Forward

To create a fairer, more transparent market system, Tanzania must adopt reforms that protect farmers while still recognizing the useful role of middlemen.

Strengthen cooperatives and farmer groups

When farmers sell as a group, they gain bargaining power and can negotiate better prices with bulk buyers.

Expand digital marketplaces

Mobile platforms that show real-time prices, buyer contacts, and market trends will reduce information imbalance.

Introduce transparent weighing and pricing systems

Standardized measurements, electronic receipts, and regulated grading will protect farmers from manipulation.

Support investment in rural storage

Cold storage, warehouses, and drying facilities will reduce post-harvest losses and allow farmers to wait for better prices.

Conclusion

Middlemen will continue to play a role in Tanzania’s agricultural supply chain, but their influence must be moderated through transparency, digital tools, and stronger cooperatives. When farmers have market information, fair storage, and organized selling structures, they can earn more from their crops and contribute more effectively to national food security and economic growth.