This study aimed at examining the effect of crop commercialisation on rural households’ poverty in Tanzania. The household survey data was collected from a sample of 389 rural households. Commercialisation index was used to estimate the level of household crop commercialisation.
The principal component analysis was used to develop a household welfare index which was then clustered to identify poor and non-poor households through cluster analysis, the method automatically guided the decision retaining two clusters by calculating the measure-of-fit that is Bayesian Information Criterion (BIC). To examine the factors affecting the household poverty status, a logistic model was employed. Results revealed that the majority (65.6%) of the households are poor. The level of crop commercialisation is averaged to 66% indicating a commercialised farming practice. The results further showed that crop commercialisation, women participation in crop income allocation, off-farm income, access to extension services and household size significantly reduce household poverty while household head’s age had an adverse effect. The study suggests that the small and medium agricultural processing units in rural areas should be given priorities and strengthened since they are crucial to promoting the level of commercialisation among rural households. Furthermore, in periods of sufficient and excess harvest, the crops trade restrictions with the neighbour countries should be eliminated to increase the level of commercialisation and earnings to the local rural farmers
