COMPARATIVE INSTITUTIONAL ANALYSIS OF FCV TOBACCO VALUE CHAINS IN INDIA AND ZIMBABWE

Abstract

This study conducted a comparative analysis of the Flue-Cured Virginia (FCV) tobacco value chains in India and Zimbabwe to investigate how the divergent institutional governance structures influence the distribution of value among the chain actors based on the Global Value Chain (GVC) theory. The study interviewed 210 respondents, including tobacco growers, commission agents, traders, processors and exporters of the two countries. Analytical tools included value chain mapping, Welch’s independent samples t test, SWOT analysis and Porter’s Value Chain performance measurement. Welch’s independent samples t-tests showed statistically significant differences between value capture in India and Zimbabwe in three of the four actor categories. The institutional governance analysis using SWOT assessment confirmed that Zimbabwe’s contract-based system concentrates value among private contract companies who get 32.3% and exporters had 28.6%, yielding a significantly lower value farmer’s share was 15.6% compared to India’s 33.1%. In India traders had 25.6%, processors 22.3% and exporters 19% whereas India’s auction-based hybrid enabled a more equitable spread of value between actors. The Porter’s Value Chain analysis revealed that India has a higher overall chain score (2.16) than the benchmark (2.0) due to stronger institutional support activities, while Zimbabwe has a chain score (1.87) below the benchmark, indicating structural weaknesses in financial systems. The study suggests that Zimbabwe should focus on structural reform of contract farming governance and invest in innovative domestic processing, while India should pursue downstream product innovation and continue to strengthen institutions.