Climate Shocks, Agricultural Trade, and Value Chain Resilience: Evidence from Tanzania’s Coffee and Cashew Sectors

Abstract

The purpose of this study is to examine how climate shocks affect production, marketing, and trade outcomes in Tanzania's coffee and cashew sectors and the capacity of the current value chain and financial linkages to enhance resilience. It specifically quantify the short- and medium-term impacts of climatic variability on coffee and cashew yields and quality in principal Tanzanian producing regions including Kilimanjaro, Arusha, Mbeya, and Songwe,  and cashew-producing regions such as Mtwara, Lindi, and Ruvuma; assessing how farmers and traders adjust marketing in response to climate shocks; and analysing the role of financial linkages warehouse receipt systems, credit, subsidies and processing capacity in mediating price transmission and value capture during shock episodes. Using a quantitative research design, it collected data using structured questionnaires and secondary data review from 400 respondents, who were sampled using a hybrid sampling technique. The data were analysed using descriptive statistics and regression. The findings reveal that climate variability significantly undermines yields, product quality, and income stability across both value chains. Drought intensity and rainfall anomalies emerged as primary determinants of production volatility, with downstream effects on marketing behaviour, value capture, and trade outcomes. Also, farmers and traders are not passive victims of climatic stress. Instead, they actively adapt through behavioural responses. However, the extent and effectiveness of these adaptations depend heavily on access to credit, warehouse receipt systems, and processing capacity. Therefore, climate resilience in agricultural trade is a multidimensional process that integrates biophysical, financial, and governance dimensions.