Mkenda, Beatrice K.Campenhout, Bjorn V.2016-07-082016-07-082011-04Mkenda, B.K. and Van Campenhout, B., 2011. Estimating transaction costs in Tanzanian supply chains. Documento de Trabalho do Centro de Crescimento Internacional, 11, p.0898.http://hdl.handle.net/20.500.11810/2906Kilimo Kwanza1 emphasizes modernization and commercialization of agriculture, which entails improving current technology used, and access and participation of smallholder farmers in markets. However, market participation is not costless. Transaction costs exist in all market exchange, and high transport costs, which are an element of transaction costs2 , are a major deterrent for market participation of farmers in Africa, and they affect the price farmers receive3 as well as their productivity (Hine and Ellis, 2001). This implies that a reduction in transaction costs can encourage smallholder farmers to participate in marketing of their produce. In addition, and potentially more important in the longer run, the increased prices may trigger the farmer to review his product portfolio in the light of these new opportunities. As such, indirectly, the reductions of inefficiencies along the marketing chain may lead to everlasting productivity gains through a reshuffle of the product portfolio of smallholder farmers that better exploits their comparative advantage.enJournal Article, Peer Reviewed