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EASTERN AND SOUTHERN MANAGEMENT INSTITUTE

(ESAMI)

EXECUTIVE MBA PROGRAMME

COMMODITY MARKET AND INTERNATIONAL TRADE

CM 601 - PROJECT

PROJECT TOPIC:

COFEE IN TANZANIA AS TRADITIONAL COMMODITY: ECONOMIC TRADE LINKAGE, DATACOLLECTION AND TRADE BARIERS

SUPERVISORS NAME: Prof. Apollonia Kerenge

Prepared by: FRED RAPHAEL

Reg. No. 19EDA10107

CHAPTER ONE

1.0 INTRODUCTION

Coffee was introduced to Tanzania early in the 20 century as an estate crop, but eventuallybecame a smallholder crop. The area planted to coffee expanded significantly during the 1970sand the 1980s when prices were favorable. Most of the expansion took place in the southern

Arabica zone (Mbozi and Mbinga regions); promoted by two EU-supported projects (World Bank


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1994).[1]

1.1 HISTORICAL BACKGROUND OF COFFEE SECTOR

The history of the sector is closely linked to the cooperative movement. During the 1920sexpatriate coffee growers formed a union to market their coffee (World Bank 1977). Thefirst marketing cooperative of native cultivators was established in the Kilimanjaro area in1932, primarily to promote coffee as a cash crop among peasant farmers.[2]

Subsequently, cooperatives grew in size and number, but they were confined to regionsproducing export crops. The primary societies are village- or multi village-levelassociations of 100 to 1,000 members, which joined together to form cooperative unions.The Kilimanjaro Native Cooperative Union, for example, consists of 93 primarysocieties.[3]

Following independence in 1961 the government expanded cooperatives into areas thathad no cooperative experience, tradition, or even need. Most of the newly createdcooperatives failed, as even a 1966 government-appointed committee acknowledged.Despite the failures the government-enforced cooperative movement continued to expand.During the same period the campaign to replace the traditional system of rural settlementswith large villages (villagization), begun in 1963, was gaining momentum and by 1973had been expanded to the entire countryside. Between 1973 and 1976 as many as 11million people moved, either voluntarily or forcibly (Mapolu 1990). The leadership of thevillages and the primary societies often had conflicting interests and mandates. [4]

Before 1976 the primary societies handled coffee procurement, paid farmers, anddelivered the coffee to the two cooperative union-owned processing factories, in Moshi(arabica) and Bukoba (robusta). The coffee was sold to exporters at the Moshi auction,operated by the Tanzania Coffee Board. (Before independence the coffee auction was runby brokers, the way that Kenyas Mombasa Tea Auction is being managed today.) In May1976 the government abolished the primary societies, and the villages took over their cropfunctions. All cooperative unions were dissolved and all post-harvest functions werehanded over to the villages or the Tanzania Coffee Board renamed the Coffee Authority of

Tanzania in 1977. [5]

The new structure, which lasted eight years, performed no better, and in 1984 thegovernment reinstated the cooperative unions and primary societies. Procurement,transportation, and processing functions were handed back to the unions and primarysocieties. [6]

However, they never became healthy financial entities. In 1991, responding to the majorfinancial difficulties of the cooperative unions, the government passed the Cooperatives

Act, which recognized the cooperatives as private institutions owned and managed by themembers. After 1984 producers would deliver coffee to primary societies and receive aninitial payment based on the previously announced price. Coffee was then taken from thesocieties to a coffee curing factory by the state-controlled cooperative union. Following


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milling and grading, the coffee was delivered to the Tanzania Coffee Marketing Board (thenew name of the Coffee Authority of Tanzania), for purchase at auction by privateexporters. The marketing board kept its legal monopoly in selling coffee and providinginputs for coffee production as well as its regulatory functions. [7]

After coffee was sold at the auction and the Coffee Board deducted the fees, the revenue

was sent to the cooperative unions, which deducted processing costs and input creditsand sent the remaining amount to the primary societies. The primary societies, aftermaking further deductions for their own costs, made the final payments to farmers to coverthe difference between the initial payments and the auction realizations. It took at least ayear for farmers to receive the second payment. Bevan and others (1993) reported thatreal producer prices fell an estimated 80 percent between 1964 and 1988, while realarabica and robusta prices declined by just 26 percent and 36 percent over the sameperiod.[8]

Although the multipayment system reduced the uncertainty for the growers, it introducedconsiderable price risk for the cooperative unions. If the first payment made to the coffeegrowers was higher than the auction realization plus other costs, the cooperative unionswould operate at a loss. In the early 1990s most unions experienced huge losses andavoided bankruptcy only because of state intervention. [9]

The pricing structure was not the only problem that the unions faced. The unions had nocomparative advantage or even experience in many of the activities in which theyengaged. Consider the performance of the Kilimanjaro Native Cooperative Union, the first

union to be registered under the Co-operative Societies Ordinance of 1932 (KNCU, pp.45) [10]:

Exports: Once the Department is fully fledged the Union should be able to sell agood part of its members crop on its own. Transportation: KNCU inherited a fleet of20 ageing lorries it was extremely difficult to keep any of them in the road through donor funding the Union acquired 28 new lorries . With liberalization andstiff competition in the transport business KNCU has decided to keep a modesttransport department Farming: The profitability of the Unions farms has not beensatisfactory. Extra investment is however inevitable if the farms are to be moreprofitable and sustainable projects. The Union is ready to go into joint ventures with

interested investors within and outside the country. Ginning: The cotton receivedcan occupy the capacity of the ginnery for only a part of the year and the unit is justbreaking even. Coffee Tree Hotel: the hotel facilities were run down Foreignand local investors on a joint venture running of the hotel are being sought. PaddyHulling: It is hoped that with the envisaged expansion of irrigation the factory willoperate at its optimum.

During the six seasons beginning in 1988/89 additional payments were made on only twooccasions. Moreover, in the 1994/95 season producers received only 33 percent of the

export price of arabica and 23 percent of robusta. In 1992 arabica averaged $1.41 a kilogram, its lowest level since 1973, and robusta averaged $0.94 a kilogram, just one centabove its 1970 level. The poor performance of the unions along with the inflexibil ity of thepricing system and the low world prices made elimination of some layers in the marketingchain a necessity. [11]


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1.2 Tanzania Coffee Estates

Throughout this period Tanzanian coffee estates suffered severely, diminishing in numberuntil by the late 1990s they accounted for only about 5 percent of production (table 1). In

the late 1960s there were 172 coffee estates in Tanzania, with total area of 12,200hectares, accounting for 10 percent of Tanzanias coffee area and almost a quarter of itscoffee output. The estates ranged from 45 to 800 hectares, averaging 100 hectares. InOctober 1973, 62 estates were nationalized and the remainder was run by privateindividuals or companies cooperating through the Tanzania Coffee Growers Association.[12]

According to Ponte (2001), coffee estates used to produce Tanzanias best coffee, withquality comparable to that of Kenyas considered one of the worlds best mild arabicas.

A World Bank (1983, p. 22) study, which compared the performance of private- and union-owned estates, reached a similar conclusion almost two decades earlier: [13]

Private estates have proven much more resourceful than their counterparts in the publicsector in keeping both field and processing machinery running at a time when foreignexchange for chemicals, spares and new equipment has been unavailable [while] thenationalized and new public sector estates are characterized by poor maintenance andmanagement, low and declining yields and lack of financial accountability. [14]

Following nationalization of the estates both the quantity and quality of Tanzanian estatecoffee suffered dramatically. The nationalized estates, which are owned and managed byprimary societies, face major managerial difficulties and have very low yields. Many havebeen practically abandoned. [15]

1.3 DEVELOPMENTS OF COFFEE IN TANZANIA SINCE 1990

The first steps in restructuring the coffee sector were taken in 1990 when the CoffeeBoard, then controlling all coffee marketing, began to make more timely payments to theunions (within three weeks after coffee was sold at the auction) and delegated to unionsthe responsibil ity for paying primary societies and growers. More comprehensive reformsbecame part of the policy reform agenda under an International Development Association(IDA) credit operation and accompanying currency devaluation in 1992. The boardbecame a marketing agent rather than a marketer, charging a fee of 1.6 percent of theauction sale. In the 1992/93 season the government stopped announcing the amount ofthe advance payments made by the unions to the growers, leaving it to the unions todecide the advance and the total payment. In March 1992 chemical input markets wereopened to private traders. A few months later exporters of coffee and other traditional

crops were allowed to retain 10 percent of their export earnings in foreign currency, andsoon thereafter, 100 percent. [16]

More reforms came in Au ust 1993, with a bill allowin rivate sector artici ation in


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marketing and processing coffee and further reducing the governments control on pricing.During the 1994/95 season private buyers, for the first time in 30 years, could purchaseand process coffee in their own factories, effectively taking market share away from thecooperative unions. [17]

The Coffee Board (again assuming its original name of Tanzania Coffee Board) had

responsibility for grading, issuing permits, and operating the coffee auction through whichall exported coffee had to pass. The Tanzania Coffee Association was established toresolve disputes between private traders and unions. [18]

What effect did the policy reforms that began in 1994 have on the prices received bygrowers, the supply response, input use, coffee quality, marketing, and processing?Growers Receive Higher Share of Export Prices

A key impetus for the reforms in 1994 was the declining share of export prices received bycoffee growers. The average producers share of arabica export price in the nine seasonsprior to the reforms was 60 percent; it rose to 73 percent in the five seasons following thereforms (table 3 and figure 1). The corresponding figures for robusta are 59 percent and 69percent (figure 2). The differences are nearly the same between the five seasons beforethe reform and those after (from 65 percent to 73 percent for arabica and from 61 percent to69 percent for robusta). Real producer prices have declined, however. For example,adjusting nominal coffee prices for inflation (domestic consumer price index) gives anaverage of 612 Tanzanian shillings (Tsh) a kilogram for the three-year period after1996/97, which is close to the 640 Tsh a kilogram average for the three-year period after

1985/86. Real robusta prices for the same periods are 280 Tsh a kilogram and 214 Tsh akilogram. [19]

Using the producer prices reported in the 1998 and 1999 tax studies for the 1997/98 and1998/99 seasons (1,242 and 1,000 Tsh a kilogram for arabica and 320 Tsh and 375 Tsh akilogram for robusta) instead of the Coffee Boards report of 850 Tsh and 900 Tsh a kilo-gram for arabica and 300 Tsh a kilogram for robusta boosts the average export sharesfrom 60 percent to 80 percent (arabica) and from 59 percent to 73 percent (robusta), amore pronounced increase. These calculations point out the impact of such discrepancies

in the data and the caution required in interpreting the impact of reforms. [20]

Regardless of the prices used and the periods considered in the calculations, two factsshould be noted. First, prior to reforms there were substantial delays before coffee growersreceived payment. Taking into account the interest forgone plus the losses to inflation, thereal prices received by producers were much lower. Second, producers were paid by theunions, which frequently had to be bailed out by the government. Thus, the pricing regimewas unsustainable, and in the absence of reform it is unlikely that producers would havecontinued to receive a 59-60 percent share. [21]

1.4 Project Objectives

I. To determine economic linkages accruing to the National Economy as a result of export of


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Coffee in Tanzania.II. To list and explain areas where Coffee related data was difficult to get and the reasons for

difficulties.III. To examine the Coffee trade barriers (tariffs and non-tariffs) encounter especially during

export.

1.5 Significance of the Project

I. The project findings will contribute in the conceptual knowledge on Agricultural Sector inTanzania

II. The project findings will also show the insight to Agricultural professionals on technicaldirection and framework for developments of Cotton e

ca producing regions of the North and South of the country. The organizations goalis to promote the production and processing of high quality specialty coffee and to

improve its access to international and local markets in order to boost the incomesof its members.

Recognizing the limitations of the farmer business groups to individually accesscredit and buyers, Techno Serve has worked closely with KILICAFE to develop arange of marketing and credit services for these groups with significant outcomes:

Cooperative unions typically pay a uniform price, dividing proceeds equally amongmembers regardless of the quality of their coffee. On the other hand, KILICAFE prefers todeliver revenues to each farmer business group in proportion to the price received atauction or through direct export for the individual groups coffee. As a result, farmers withprospects to produce high quality coffee maximize their income by associating withKILICAFE instead of allowing it to be bulked and sold with inferior quality coffee.The potential for higher prices paid by KILICAFE creates incentives for higher qualityproduction and processing. The higher quality coffee, supported by assisted marketingservices, has delivered prices 70% higher than the national average to member farmers.In 2005, KILICAFE provided over US$700,000 in working capital to its members and linked12 groups to finance in order to purchase quality-enhancing central pulpery (processing)equipment.KILICAFE sold more than US$3mill ion worth of coffee in 2005 and launched a partnership

with the US-based Peets Coffee & Tea to sell KILICAFEs coffee in the USA under theTanzania Kilimanjaro brand.

As demonstrated by KILICAFE, the value-adding activities of supporting the developmentof central pulpery processing, credit access, improved marketing and the development ofnew business models translate into higher revenues and more income for the rural poor.Smallholder farmers can sell specialty coffee, produced in central pulperies, for US$2 perkilogram at the farm gate, compared to US$1 per kilogram for commodity coffee producedusing back-yard processing. Creating access to efficient central pulpery facilities for all

coffee growers in Tanzania, and developing the Tanzanian Specialty coffee brand, couldbenefit 400,000 rural families and increase foreign currency earnings annually by US$23million. With a program of modest investment, the KILICAFE model can be replicated andsubstantially scaled up, significantly impacting the development of Tanzania.


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3.3 Areas where Coffee data was difficult to get

Area where Coffee data was difficult to get is in the Agricultural sector in Tanzania. Thatis, lack of reliable cotton data, which makes it difficult to analyze the impact of cotton inTanzania especially in the reforms before gradually dropping back to agricultural pre-reform levels. Output averaged 64,800 tons in the five seasons before the agriculturalreforms and 66,400 tons in the five seasons after agricultural reforms, a very moderate

increase. But other data sources throw even this modest increase into doubt. Threedifferent sources show no supply response after the 1994/95 policy changes, which isconsistent with the large reduction in input use and the mixing of cotton varieties that lookplace after the reforms. [22]

Different data sources aside, there is considerable variability in cotton production inTanzania, where cotton is very price-responsive. Coffees short-run supply elasticity isunity, implying that coffees price variability is fully translated into supply variabil ity. Thisreflects the flexibility of farmers in switching back and forth between coffee and food crops.

[23]

Once input supply (mainly chemicals and seeds) and credit for purchasing inputs were nolonger integrated into a single cotton marketing channel, use of inputs declined sharply.Loss of the single marketing channel pushed up the costs of marketing chemicals and ledto a collapse in supply and distribution. And most farmers did not have access to creditand so could not afford to purchase chemicals e.g. fertilizers and insecticides at marketprices. [24]

3.4 Coffee barriers (tariffs and non-tariffs)

A. Barriers that affect Tanzanias exports

i. Cumbersome inspection requirements

Various Non-Tariff Barriers experienced under this cluster include repeated and longinspection queues during inspection of Gross Vehicle Mass and axle loads, faultyweighing equipment at some stations, cumbersome and costly quality inspectionprocedures, lack of quality standards for plastics, quality inspection procedures in theother two EAC countries on some products that are already certified by TBS in Tanzaniaand varying quality inspection and testing procedures among EA and SADC countries.[25]

ii. Police road blocks

A very serious obstacle to cross-border EAC and SADC trade, while this is not cited aspolice officers still stop commercial vehicles at various inter-country road blocks and atborder crossings even where there is no proof that goods being transported are ofsuspicious nature (for example smuggled goods and drugs, etc).[26]

iii. Varying trade regulations among the three EAC and SADC countries

Within EAC, Uganda and Kenya both use the harmonized COMESA axle loadspecifications at 16 tones for double axle, while Tanzania uses a higher legal limit of 18tones under SADC. Also, the specified maximum Gross Vehicle Mass (GVM) forcommercial vehicles differs among the three EAC countries, at 54 tones in Kenya, 46tones in Uganda, and 56 tones in Tanzania, which limit the ability to undertake efficienttransit traffic within the re ion. Also EAC countries have different arameters on wei hts,


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labeling, and quali ty, tolerance in measurements, and type and technology used inpackaging, which limits ability of intra-EAC trade. Within SADC, the ability for maximizingtrade opportunities is l imited by the lack of some members like Malawi and Zambia todeposit their trade instruments, which implies that the intra-SADC tariffs cannot be appliedunder the trade protocol.[27]

iv. Varying, cumbersome and costly transiting procedures in the three EAC countries

Under this cluster, the most serious Non-Tariff Barriers are varying requirements amongthe three countries on the type of commercial trucks that should be used in transit trafficand application of insurance bonds on goods destined to the region, especiallyTanzania.[28]

v. Immigration procedures

Some of the Non-Tariff Barriers experienced under this cluster include requirements forwork permits in the two other EAC states, visa for travelling to South Africa, and lack of an

East African Passport by many citizens who cross borders in search of businessopportunities.[29]

B. Barriers that affects Tanzanias Import

i. Customs and administrative documentation procedures

Examples of Non-Tariff Barriers under this cluster include varying systems for importsdeclaration and payment of applicable duty rates at entry points, limited customs workinghours, and cumbersome inspection procedures used by TRISCAN.[30]

ii. Cumbersome inspection requirements

Various NTBs experienced under this cluster include repeated and long inspectionqueues during inspection of Gross Vehicle Mass and axle loads, faulty weighingequipment at some stations, cumbersome and costly quality inspection procedures.[31]

iii. Police road blocks

While this is not sited a very serious obstacle to cross-border EAC and SADC tradecurrently, police officers still stop commercial vehicles at various inter-country road blocksand at border crossings even where there is no proof that goods being transported are ofsuspicious nature (for example smuggled goods and drugs, etc).[32]

iv. Congestion at Dar es Salaam Port

The use of old equipment like cranes used to offload cargo from delivery vessels has ledto serious clogging at the port, lack of warehousing space, slow turn-around time of thevessels and consequently to exorbitant charges for deliveries to Dar es Salaam port anddemurrage charges on cargo.[33]


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Interpretation on Tariff Barriers in Coffee in Tanzania

The new WTO Secretariat report, along with a statement by the Tanzanian Government,will serve as a basis for the trade policy review of Tanzania which will take place in theWTO Trade Policy Review Body on 1 and 3 March.[34]

The report says that Tanzania's main trading partners are the European Union, Japan,India and Kenya. Its exports are primarily agricultural commodities with coffee, cashewnuts, tobacco and cotton constituting the largest sectors. Tanzania imports mainlymachinery, transportation equipment, industrial raw materials, and consumer goods. Thereport notes that because of the decrease in agricultural production during the past fewyears, attributable to adverse climatic conditions, food and foodstuffs imports haveincreased sharply. [35]

Tanzania has participated in the Integrated Framework for Trade-Related TechnicalAssistance to Least Developed Countries (IF). However, the report notes that despite itsinvolvement in the IF, and the technical assistance it has already received from itsdevelopment partners such as the WTO and other members of the IF, Tanzania is in needof substantial ongoing technical assistance in a wide range of trade-related areas. [36]

Tanzania is actively pursuing a regional integration strategy, the report says. It is asignatory of the Common Market for Eastern and Southern Africa (COMESA) - although ithas announced its intention to withdraw - and it is a member of the Southern AfricanDevelopment Community (SADC). Tanzania also aims to strengthen the East AfricanCooperation (EAC) agreement with neighboring Kenya and Uganda. [37]

Under the Lome Convention, Tanzania receives the full range of aide made available toACP countries by the European Union, the report notes. As a result, many Tanzanianexports to the EU are exempt from import duties. Likewise, Tanzania's goods enjoy non-reciprocal preferential access to the markets of other developed countries through theGeneralized System of Preferences. However, the report states that due to Tanzania'slimited export capacity, the benefits that Tanzania reaps from these preferentialarrangements are minimal. [38]

The report notes that the recent reform of Tanzania's customs duties has resulted in asimplified five-tier structure with a simple average of applied import duties of 16.2%. Thistariff structure is somewhat escalatory with many processed products facing a highereffective rate of protection along the processing chain. The report states that such a tariffstructure provides substantial import protection to higher-level processing activities,causing resource misallocation and inflicting higher costs to Tanzanian consumers. [39]

The report notes also that the Government of Tanzania relies heavily on revenues fromtariffs and VAT and that consequently there is pressure to maintain revenues through hightariff levels. The report says that this pressure could be reduced - as could tariff rates - if


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the extent of exemptions granted were reduced or eliminated. [40]

Tanzania is neither an observer to, nor a signatory of, the plurilateral Agreement onGovernment Procurement. The report notes that Tanzania's own procurement proceduresare a confusing agglomeration of memoranda and other understandings that vary fromministry to ministry. The report says that Tanzania has been pursuing an aggressive policy

of privatization in conjunction with support it receives from international financialinstitutions. Tanzania has also been amending its intellectual property rights legislation toconform with WTO requirements and is currently addressing its lack of enforcementmechanisms. [41]

Tanzania's agricultural sector constitutes over 50% of its national GDP and provides amajority of the country's export earnings, the report says. The sector has beensubstantially liberalized since the mid 1980s and market forces have been allowed toprevail, the report notes. The Government has withdrawn from direct involvement in

production, processing, and marketing activities and has retained only its role in settingpolicies. The report notes that Tanzania has in the past few years experienced severefood shortages and varying levels of export earnings due to both droughts and floods. [42]

The report notes that Tanzania's manufacturing sector is underdeveloped. The sector isdominated by food processing, beverages, agri-business, and light manufacturing, alongwith some textile and footwear producers. The report says that it has been hampered byhigh input costs. In particular, the tariff, which provides for high levels of protection forvalue-added goods, makes it difficult for Tanzanian manufacturers who must source inputs

from outside the country.[43]

The services sector, like the rest of the economy, has undergone significant liberalizationin a number of areas, including telecommunications, insurance and financial services. Thereport notes that tourism constitutes the largest component of services GDP and holdspromise for continued growth. Tanzania is a net importer of services and intends tounderline its commitment to telecommunications liberalization by making specific bindingsunder the General Agreement on Trade in Services (GATS). [44]

CHAPTER FIVE

5.0 CONCLUSSION AND RECOMMENDATION

5.1 CONCLUSION

Coffee is an important product for Tanzania, offering employment to more than 400,000smallholders and contributing $115 million to export earnings, making coffee the largestexport earner. Financial difficulties of the unions and the sharp decline in coffee prices in1992 left only one feasible solution: policy reforms. Although some changes wereintroduced as early as 1990, the full reform package was not introduced until 1994, whenthe private sector was allowed to market and process coffee. But the reform process hasbeen neither entirely successful nor complete.


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If the coffee sector is to reach its full potential, priority should be given to the followingadditional reforms:

Taxes should be substantially reduced, the tax code should be simplified, and taxes shouldbe consolidated, rationalized and made uniform across all exports (crops andmerchandise). That will introduce a more equitable distribution of the tax burden and help

to induce a supply response in the coffee sector.The Coffee Boards licensing procedures should be reexamined. Licenses should besuspended only in accordance with the Coffee Industry Act of 2001 and not in response torequests by the cooperative unions or the Ministry of Cooperatives. Licenses should berenewed automatically and subject to a modest fee to cover administrative costs and nottreated as a tax tool. That will increase the efficiency of the sector and create a morepredictable investment climate.The coffee auction should be voluntary. This will substantially reduce the costs of verticallyintegrated exporters and estates that have the capacity to market the coffee themselves. Itwill also enhance cross-border trade so that Tanzanian coffee growers can enjoy therobusta and mild arabica premia enjoyed by their counterparts in Uganda and Kenya.The Coffee Board should take full responsibility for collecting, monitoring, and improvingthe quality of all coffee statistics, especially on production, exports, and export prices, whichare currently unacceptable. That wil l help the public sector take the proper policy actionsand the private sector to make correct investment decisions.The power of the Coffee Board and the ministries must be substantially reduced and theirrespective roles clearly defined. Selection of the Coffee Boards managerial team shouldbe the industrys job. This will increase the effectiveness of the decision making process,which ultimately should reflect the needs of the industry, not the wishes of various policyactors

5.2 RECOMMENDATION

Recommendation here is that:

In order for Tanzania to take advantage of opportunities for growth presented by coffeeproduction farmers must be supported through technical assistance and investment ininfrastructure and institutions.

However, due to lack of access to credit and capital for farmers of coffee, the banks inTanzania must give them loans to expand their production or create a higher qualityproduct. The banking system is structured to service large companies and moreestablished businesses with longer term loans. Therefore, a common situation is that of afarmer with whom Realizing Rights delegates met, who was without the funds to send hisdaughter to school in the period between crop harvesting and crop sale, regardless of thevisibility of his assets. This structure needs to be shifted in order to benefit farmers bycreating more flexibil ity in the length and size of loans and the collateral needed to gainaccess to credit. The development of micro-finance products specifically for smallholdercoffee growers would address the cash-flow problems associated with this annual crop.

National studies are shown that onl a tin ro ortion of o erators in the informal sector


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could acquire capital from the formal financial sector to by land. The government musttake necessary action to utilize land as a form of collateral is the most significant barrier forsmallholder farmers who wish to access credit.

Tanzania must need support in finding alternative energy solutions one suggestion wasusing the Highly-Indebted Poor Countries (HIPC) debt relief dividends to purchase

turbines; another was adopting alternative fuel sources (coffee waste), this could boost thecoffee farmer by increase the income earning as well as purchasing power.

References

John Baffes (2003), Tanzania Coffee Sector Paper in Constraints and Challenges in aGlobal Environment, World BankReport (2007), A survey of Non-Tariff Barriers that affect Tanzanian imports and exportswithin EAC, SADC and COMESA countries

World Trade Organization Report (2000), Article on Impact of accelerated reforms inTanzania constrained by limited export capacity, Geneva

[1] John Baffes (2003), Tanzania Coffee Sector Paper in Constraints and Challenges in a GlobalEnvironment, World Bank









[10] John Baffes (2003), Tanzania Coffee Sector Paper in Constraints and Challenges in a

Global Environment, World Bank[11] John Baffes (2003), Tanzania Coffee Sector Paper in Constraints and Challenges in aGlobal Environment, World Bank

[12] John Baffes (2003), Tanzania Coffee Sector Paper in Constraints and Challenges in a


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Global Environment, World Bank

[13] John Baffes (2003), Tanzania Coffee Sector Paper in Constraints and Challenges in aGlobal Environment, World Bank










[23] Tanzanias Cotton Sector (2002) Constraints and Challenges in a Global EnvironmentAfrica Region Working Paper Series No. 42


[25] Report (2007), A survey of Non-Tariff Barriers that affect Tanzanian imports and exportswithin EAC, SADC and COMESA countries

[26] Report (2007), A survey of Non-Tariff Barriers that affect Tanzanian imports and exports

within EAC, SADC and COMESA countries







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[34] World Trade Organization Report (2000), Article on Impact of accelerated reforms inTanzania constrained by limited export capacity, Geneva








[42] World Trade Organization Report (2000), Article on Impact of accelerated reforms in

Tanzania constrained by limited export capacity, Geneva



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