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MIXED FEELINGSAbout Cashew nut Indicative Price setting


ULIMWENGU WA

DECEMBER 2018 VOLUME 8ISSN 1821-8245FARMER’S WORLD

EYES ON COFFEE:Shrinking of Tanzania’sblack gold?

VOLUME 8, DECEMBER 2018



ULIMWENGU WA

DECEMBER 2018 VOLUME 8ISSN 1821-8245FARMER’S WORLD

EYES ON COFFEE:Shrinking of Tanzania’sblack gold?

Coffee is one of the most strategic crops in Tanzania: Let’s not kill it08

Industrial Revolution in Tanzania: Identifying the role for extension services10

Capacity building for extension officer to improve coffee value chain in Tanzania11

ANSAF unveils its new Strategic Plan 2018-202212

Mixed feelings about Cashew nut Indicative Price setting13

New hope for small-scale cashew processors as government bans raw export15

Setting up cooperatives to work for smallholder producers17

Breaking through barriers: Expansion of a female-led food business in Iringa19

Are the Malabo targets achievablein Tanzania?23

District Agricultural Development Programs and industrialization process in Tanzania21

Feedback Form29

Eyes on coffee:Shrinking of Tanzania’s black gold?05

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VOLUME 8, DECEMBER 2018

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Message from the Executive Director

Dear esteemed reader,

Welcome to the 8th edition of your favorite

magazine, Ulimwengu wa Mkulima. This publication comes at a crucial time where ANSAF is preparing an important gathering on Evidence to Action. Tanzania, as is generally the case

for countries within and outside Africa, formulates policies and strategies to guide country growth and development -socially, politically and econoomically. Various public and private universities, think tank institutions and NSAs independently and occassionaly collaboratively engage in developing, setting the agenda, conducting researches and making recommendations based on findings. However, not all research evidence reaches decision-makers and the evidence that is shared may or may not trigger interest or inform policy processes. The main question is what do policy and investment decision makers (both public and private) need to inform their decisions, and what evidence is compelling enough to move the minds of decision makers? Within the Tanzanian National Parliament and relevant committees what does the parliament need to help them reach a decision for national interest? How do they access evidence, what is the quality and where are the gaps? What needs to be done to improve the quality of decision making processes? It is against this backdrop that ANSAF in collaboration with the Sustainable Agricultural Intensification Research and Learning in Africa (SAIRLA) project and national policy institutions is organizing a two-day consultative workshop in May 2019 specifically to chart out how to translate evidence from research to policy action. This workshop will include participants primarily from Tanzania, but also outside the country to share experiences and lessons on how decision makers have used evidence to make decisions, what kind of evidence do they need to make decisions, their experiences in using available evidences to develop policy actions and how others have used evidence to

inform decisions at various levels. Although this is a national workshop, the organizers consider it important to extend invitation to other key stakeholders from within the region and outside Africa. At the national level, particpants of the workshop will be drawn from Mininstry of Agriculture, Ministry of Industries Trade and Investment as well as Ministry of Finance and Ministry of Livestock and Fisheries, members of parliament as well as development agencies. The overall objective of the consultative workshop is to share experience and jointly learn how to enable Evidence informed and Inclusive decision making processes for quality agricultural poIicy and investment decisions. Throughout the consultative workshop a spirit of open discussion will be created for paricipants to share their experiences around evidence informed and inclusive decision making processes. Parliamentarians, cicil servants, private sector, researchers and academia, civil society organizations and media will share their visions, experiences, examples and lessons of enaging and / or informing decision making processes, what they think needs to change and how this can be done. The tone of the workshop will be to urge stakeholders to apply a holistic approach in working together. This message serves as a call for involvement of pulic sector civil seravnts; parliamentarians; regional bodies such as Regional Strategic Analysis and Knowledge Support Systems (ReSAKSS) and International Livestock Research Institute (ILRI); domestic think tanks and academic institutions. Since we want to become an economic giant country, the private sector has a special role to play in making this dream happen. The success of all our effors to develop as a country is only when we create enabling environment for rural producers in Tanzania to produce, process and market their products in a competitive manner. A call for proposals will be invited in the near future. I believe you will be the messanger to spread this message to peers and think tanks. Thank you and enjoy reading the rest of the magazine.

—Audax RukongeExecutive Director - ANSAF

Making the best use of evidence to bring socio-economic change in Tanzania

VOLUME 8, DECEMBER 2018 VOLUME 8, DECEMBER 2018

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A note from the Chief Editor CHAIRPERSONAudax Rukonge

CHIEF EDITORMbarwa Kivuyo

MEMBERSEdina Lugano – ANSAF Secretariat

Rehema Msamy – ANSAF Secretariat Stella Msami – ANSAF Secretariat

Joseph Nyamboha – ANSAF Secretariat

CONTRIBUTORS:Aikande Kwayu – Café Africa Tanzania

Board MemberMbarwa Kivuyo – ANSAF Head of

Media &Communications

Herman Beneth – KADERES staffAbdallah Bakari - Correspondent

Joseph Nyamboha – ANSAF Policy and Budget Analysis Coordinator

Jemima Michael – VSO Tanzania Information Officer

Independent Reports – Arusha & Kilimanjaro

DISTRIBUTION/SALES & MARKETINGMedia and Communication

Department

PUBLISHER:Agricultural Non State Actors

Forum(ANSAF)

P.O. Box 33562, Plot 167, Migombani Street, Regent Estate, Mikocheni A,

Dar es Salaam.Tel: + 255 22 2771566 / 2775970

Fax: + 255 22 2773217Email: [email protected]

Website: www.ansaf.or.tz

DESIGNING & PRINTINGC&V Marketing Communication

Solution (T) Ltd. P.O. Box 95092, Dar es Salaam

Tel: (+255) 787 808 055 / 712 464 649Email: [email protected]

Dear EditorYou have expanded my understanding since 2013 when I was just starting to work as a cashew nut processor under the tree. Today I have a building, an office, customers and three processing machines. I am continuing to work hard and I can now employ 18 youths every year. I am confident that I will soon have my own cashew nut processing plant. Thank you God for linking me with ANSAF.

—Shem A Ulenje, Tandahimba

Dear Editor,I would like to get to know more about technologies used to modify organisms genetically. What could be the impact of these technologies to humans and the environment?

Marcelina C. Kibena, Morogoro

LETTERS TO THE EDITOR

Every time is coffee timeDear esteemed reader,

In this edition, we give a special attention to policy dynamics in the production, processing and marketing of coffee in Tanzania.

At the onset of 2018, the government proposed a set of measures aimed to improve the management of coffee in Tanzania with the view to increase productivity, enhance processing and facilitate the marketing processes. Announcing the directives, the Prime Minister directed local government authorities

to dispatch extension workers to ward and village levels, and only keep a small number of them at district levels. The aim was to take extension services closer to the people who need it most. Then the Prime Minister directed that coffee should be collected by primary cooperative societies, processed and sold through cooperative unions. The cooperative unions will sell the coffee through a single auctioning point in Moshi, Kilimanjaro. In other words, private trading was abolished. Direct export of coffee was abolished and farmers must join agricultural marketing cooperative societies (AMCOS) in their respective villages to be able to sell coffee. These changes were supposed to become effective from May 2018. Stakeholders approached ANSAF with a request to join hands to air out some concerns if the approach was implemented abruptly. Immediate effects were the loss of the market that was already negotiated by coffee traders, second, cooperatives were not prepared to handle the changes, third financial institutions were not prepared to pre-finance on farm coffee management activities. Smuggling of coffee was one of the challenges that was foreseen if the marketing scenario becomes hostile. ANSAF took a step to meet the office of the Prime Minister, the President, Ministry of Agriculture and the Office of the Registrar of Cooperatives. Later it sought a forum with members of parliament from coffee growing constituencies in Tanzania to express the magnitude of the effects of proposals announced by the Prime Minister. From there onwards, the government had reconsidered and amended some of the proposals. It opened up a window for direct export of fair-trade coffee. And we suggested that coffee auctioning should be decentralized. Let the Moshi not be the sole selling point. Kagera is producing around 60% of all coffee from Tanzania. Sending samples to Moshi should not be mandatory. Let the auctioning take place in Mbinga, Kagera, and other production areas. We hope that the government will see this logic and improve the marketing system.

—Mbarwa KivuyoChief Editor

Note to the reader: The content and opinion expressed in this publication are not necessari-ly those of the editor or any other organization associated with this magazine. While maxi-mum precaution is taken to ensure accuracy in preparing the publication, the publisher and ANSAF assume no responsibility or liability for any inaccuracies or omissions. All submitted materials are accepted on the understanding that the materials can be edited, amended or abridged for publication.

Chief Editor

EDITORIAL BOARD


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Between September and December 2018, a team of six journalists decided to look at the coffee

subsector with a microscopic eye. With the help of Haki Kazi Catalyst (HKC) and ANSAF, the journalists diagnosed how the once lucrative cash crop had now become a burden to farmers in the Northern Highlands.

From Stem to SteamIt was once called the black gold in the Northern Highlands and Lake Zone of Tanzania but now hope for coffee seems to be the latest ‘cup of doubt,’ among local growers. Coffee, the cash crop which positively transformed lives in East Africa, has been relegated into trees for decoration outside posh tourist inns, and in some areas, farmers are already uprooting the plants, replacing it with fast yielding and better paying crops.

Looking at the future of coffee through the eyes of the StateTanzania projected to increase coffee production to 1.15 million bags in the 2017/2018 marketing season, from the 1.05 million bags recorded in the 2016/2017 marketing season. And a report from the Tanzania Coffee Board indicated that the idea was to double production by the year 2021. However,

the real situation in the field was far from promising.

Market challenge: Who buys it?Most coffee growers in Arusha and Kilimanjaro regions say they are still experiencing difficulties in securing reliable markets for the cash crop to the extent that they are now replacing coffee with other fast-moving crops. Recent studies conducted in the precincts revealed that the majority of small-scale growers are giving up on the once lucrative cash crop while large-scale farmers keep up hope, amid challenges surrounding the coffee crop in the Northern Zone. Tanzania produces Robusta and Arabica types of coffee. Arabica growing regions are Arusha, Kilimanjaro, Mbeya and Ruvuma, while Robusta is mainly produced in Kagera region. Other growing regions include Tanga, Iringa, Morogoro, Kigoma, Manyara, Mwanza, Rukwa and Mara. The recent study in the Northern Zone found that coffee is intercropped with banana plants and other crops.

Large-scale growers: Case of Edwin MteiLarge-scale farmers account for less than 10 percent countrywide and in Arusha and Kilimanjaro there are just

about three coffee estates which are Burka Coffee Estate, Ogaden Farm and the Aroma of Arusha. “I am made up of coffee, everything you see in me comes from the cash crop,” said Edwin Mtei. Mr. Mtei is a former Governor of the Bank of Tanzania who retired to his coffee farm in Tengeru area in Meru District, about 15 kilometres from the Arusha city centre. Cultivating some 52 acres of the cash crop, Mtei employs over 120 workers at the ‘Ogaden Farm,’ a coffee estate founded back in the 1930s by a British soldier who fought in the Ogaden war of Ethiopia-Somali. “I harvest up to 52 tons per season and I undertake primary processing myself,” said Mtei. He adds, “China, India, Japan and Indonesia are some of the market outlets for my produce.” Mtei still sells coffee to those markets but usually his consignments get bundled with produce from other growers for exports. His farm reportedly ranks second after Burka Coffee Estate in producing Arabica Coffee. Mtei feels there is still a market for coffee as long as people around the world continue to sip the popular hot beverage.

Small scale growers: The case of Meru, Kilimanjaro peasantsErasto Mushi is a farmer in Kilimanjaro Region. He reports that people in the area have been uprooting coffee trees from their land, replacing them with horticultural crops such as tomatoes, cabbages and other short maturing vegetables that fetch the highly demanding market outlets. Mushi, who is also the Chairman of Kyeeri Village in Machame division of Hai District, explained that the demise of coffee is due to unavailable markets. “Cooperative societies do not have cash in hand to buy coffee like it was before,” he said. Another farmer, Michael Mutengushi, from Machame recalls the effects of emerging new pests and diseases, attacking the cash crop. “You can hardly harvest 50% of what is in the farm,” he said, adding the rest is consumed by pests and diseases. Mutengushi said the crop is getting

Eyes on coffee:Shrinking of TANZANIA’S BLACK GOLD?


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even more sensitive requiring 24 hours a week watch. “We have pests that attack the roots, others attack the stem, then there are those that target the berry itself and some eat the leaves.” With so many types of diseases and pests, it gets even more expensive to take care of coffee trees as that may need a farmer to apply more than three types of chemicals at a time. Richard Mushia, a peasant of Kyeeri Village in Machame West of Kilimanjaro, said a bag of pesticide sells at TZS 65,000 without counting other expenses, and per single acre you may need ten such bags at the cost of TZS 650,000. Now imagine selling the produce at TZS 2000 per kilo to the cooperative societies, that is a loss. Joseph Mungure a grower from Akeri Arumeru said the state should inject money into cooperative societies if the same are to take the responsibility of buying coffee from farmers as well as issuing input loans to coffee growers.

Other causesThe coffee industry in Tanzania suffers from a number of other factors, including an old-fashioned way of farming that is weather dependent. Local growers have yet to discover ways of green-housing the trees including the use of irrigation systems. Many farms still have older coffee trees, some no longer commanding the good yields of the yester years and most still susceptible to diseases and pests. Poor agricultural practices adopted by many smallholder producers, are due to limited capital, lack of access to credit, lack of adequate farming inputs, and low use of inputs by producers.

The rise and fall of coffee in TanzaniaFarmers in Arusha and Kilimanjaro say, coffee used to make people rich in the 1960s and 1970s, however the crop started falling from the early 1980s alongside the dwindling economy which caused the government to pull out its support from coffee growers. “Maybe it was after the war with Uganda when Tanzania emerged victor but coffee became the loser,” they mulled. Dr. Simon Mbilinyi in his recent study on ‘Economics of Peasant Coffee Production’ asserts that the Tanzania coffee industry suffers from two major international problems. First, the global fluctuating and falling prices of the crop as experienced by all growers and producers which is further aggravated by the lower quality of coffee produced by smallholders compared for instance with Kenya. The reason was that most coffee from Tanzania is produced by small-scale farmers who individually process the crop (pulping) traditionally as opposed to central modern pulping method. That fails to produce a uniform quality of coffee.

Authorities: Central Government stanceIn January 2018, the government - through the Prime Minister Kassim Majaliwa - dissolved the Tanzania Coffee Development Trust Fund (TCDF), saying it was not legally established, directing the Controller and Auditor General (CAG) to investigate the trust fund since its formation. Meeting coffee stakeholders in Dodoma to discuss the development of the country’s cash crop, the Prime Minister said “While the government was striving to reduce unnecessary deductions from farmers, there was this body which is swindling farmers’ income.” The government thus ordered the closure of the TCDF offices to pave way for the CAG to carry out a thorough investigation, adding that the Fund’s activities would be placed under the Tanzania Coffee Board (TCB). Apparently TCDF’s responsibilities, including monitoring the development of the commercial crop, were simply ‘copy-and-paste’ from duties of TCB, therefore the state realized that there was no need to have two bodies doing the same works. William Mbise from Arumeru said there was a slight advantage to use cooperative unions where the latter

assisted growers with farm inputs such as fertilizers and other chemicals on loaning schemes. However, the other side of the coin was that, the farmers felt tethered they could not sell their products at better prices because they had no choice as far as market outlets were concerned. “Previously, buyers used to knock on our doors offering whatever prices they felt suitable to farmers and they turned out in proper time with cash in hand; but latest development means we are forced to sell coffee to fixed outlets that most of the time do not have enough resources to buy the products from farmers thus we have to wait for months before being paid for what we delivered.” He and fellow farmers in Meru believe that competition, especially among buyers, was the only solution to keep the coffee crop afloat. For others like Samuel John in Kilimanjaro, the government’s move could have meant to protect farmers and ensure that the country benefits wholly from the cash crop, however it also has its shortcomings. Therefore, it was the right time for national dialogues on coffee to bring together all stakeholders to discuss the best solution and way forward. Sifaeli Urio, a farmer from King’ori Arumeru, Arusha, said while he supports the government’s decisions to market coffee through cooperative unions, there should be a national dialogue to discuss challenges facing coffee growers and to come up with solutions and recommendations. Large-scale growers such as Mtei feel that the cash crop needs proper national branding and that all growers - big and small - should pool their produce together for joint processing, exporting and marketing as Tanzanians and not on individual levels.

What became of private coffee buyers?Under the same directives, the government banned traders that had been buying coffee directly from farmers in the villages, insisting that the cash crop will only be sold through official auctions supervised by TCB. Regional and District Commissioners were told to take legal actions against traders who continued to procure coffee in farms, and direct all growers to take their produce to auctions and traders to also buy them from there. It is costly and cumbersome said


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Bill Mbise of Usa-River, Meru who explained that the cost of taking coffee to buyers will cut a chunk from their profits. “Buyers used to come with own transport and take the goods away, now we are compelled to incur this added expense.” The Deputy Minister in the President’s Office, Regional Administration and Local Government (PO-RALG), Joseph Kakunda, said there are 52 coffee producing districts in 16 regions. “All regional and district commissioners in the precincts have been told to ban permits given to coffee traders,” he explained. Director of Coffee Development at the Tanzania Coffee Board, Kajiru Francis Kiseke, is based in Kilimanjaro region. He said the government had directed that all growers should sell their coffee through cooperative societies or official auctions. Cooperative societies were initially supposed to collect all coffee, process it and sell the crop on behalf of farmers through auctions currently held in Moshi Municipality, in order to control such transactions. “Some cooperative societies did not have immediate cash to undertake the duties, therefore the government decided to let farmers organize themselves into groups and take the coffee direct to the official market auctions,” he said. Kajiru maintains that through cooperative societies, farmers will maintain ownership of the crop and can speak strongly with one voice. This was also supported by Edwin Mtei who feels marketing coffee in unison will help cultivate special brand from Tanzania.

Domestic Coffee Consumption: Untapped potentialAccording to TCB, domestic coffee consumption is growing at an average of between 1.5 and 2 percent per year due to a coffee drinking culture that is gradually taking root in the urban and semi-urban areas. However, the annual per capita coffee consumption in the country which stands at 0.06 kg, leaves a lot to be desired. Figures indicate that only seven percent of the country’s total coffee production is consumed domestically. With that, coffee in Tanzania is still highly dependent on overseas buyers to survive. But with a population heading to 50 million residents, Tanzania already has a ready-made market for coffee, if only somebody realized it.

Will coffee survive the next decade?Coffee prices fell by an average of 15 per cent at the world market during the year to September 30, 2018 compared with the previous year and if anything, this could signal bleak future to the cash crop. The Bank of Tanzania’s economic review for October attributes the drop to increased supply, mainly from Brazil whose harvest was bumper. The review shows that Robusta coffee prices decreased to US$1.93 a kilo during the year to September 30, 2018 from US$2.28 the previous year. Arabica coffee prices also fell to US$2.96 a kilo from US$3.52 during the same period. Coffee prices declined because production in Brazil, Colombia and Vietnam rose. Brazil remains the largest coffee exporting nation, however Vietnam tripled its exports between 1995 and 1999 and became a major producer of Robusta seeds. Indonesia is the third-largest coffee exporter overall and the largest producer of washed arabica coffee. Organic Honduran coffee is a rapidly growing emerging commodity owing to the Honduran climate and rich soil. As trends in coffee production and exports continued to plummet in the past, the government decided to take drastic steps. In 2011 the government launched the Coffee Industry Development Strategy (CIDS) which was billed as part of the country’s Agricultural Sector Development Strategy (ASDS). The Coffee Industry Development Strategy was meant to improve incomes across the entire value chain by increasing coffee production and quality. Production targets are to increase from the current 50,000 tons per season to 100,000 tons by 2020. This is according to the Tanzania Coffee Research Institute (TACRI) figures. That was to be achieved through planting new coffee varieties (production of 200 million seedlings by 2020), expansion of farm land, organizational reform, increase in fertilizer usage, and control of coffee diseases and pests. It was reported that through the combination of the said measures, crop yield is expected to increase from the current 250kg per hectare to 600kg per hectare or essentially 450 kilograms per single tree, as far as the Tanzania Coffee Industry Report (2017) is concerned.

RECOMMENDATIONS FROM STAKEHOLDERSThe viewpoint of coffee growers, both large and small, is that if cooperative unions are to be given the task of buying coffee from farmers, then these societies should first be empowered to do so, both technically and financially. The second recommendation from growers is that proper policies on coffee farming, marketing and handling should be formulated and gazetted. Other recommendations include: TCB should organize National Coffee Auctioning days (or weeks) to promote coffee and attract local and international markets; organize a national forum of coffee stakeholders to come up with solutions for every challenge facing growers. They advised the government to borrow a leaf from Uganda where coffee is in such high demand to an extent that dealers come to Tanzania to smuggle coffee into Uganda. A Public-Private Partnership (PPP) initiative to help revive the coffee crop should be established as a way to guarantee future survival of the cash crop. Cooperative societies must be assisted to grow from their old set-up as arms of socialist policies to adopt modern approaches in the industry.


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In the 1970s during the global oil crisis, Tanzania’s failure to afford oil was rescued by a system of

barter exchange – famously known as “Coffee for Oil” – with Algeria. Tanzania exported coffee to Algeria in exchange for oil. A similar situation occurred in 1985 when Tanzania failed to pay for the discharge of a crude oil tanker stationed at the harbor. A German coffee buyer offered to help under the agreement that he would be paid back by the proceeds of coffee in the following season. The ability of coffee to play a strategic and patriotic role in the country goes way back to colonial times. In Kilimanjaro, for example, coffee enabled the people to organize a political institution known as the Chagga Council. The Council, which was mostly funded by the Kilimanjaro Native Cooperative Union (KNCU), was an integral institution during the independence struggle and politics of the same. With the coffee money, KNCU sponsored many Tanzanians to study both in the country and abroad. The basis for the coffee power comes from its global demand. Coffee is a universal drink traded across borders. To fetch a good price at the competitive global level quality is key.

The quality of coffee is dependent on multiple factors – central to this being the national policy framework. National policies that govern the coffee sector are crucial as they touch on each player across the value chain from the farm to the cup. The prices in the present market are perhaps disappointing for farmers, as it has dropped to unexpectedly low levels. When the crop was harvested in May through to August in 2018, world market prices were higher, but they have declined in the face of a record Brazilian crop (over 60 million bags), a healthy Vietnam crop (mainly robusta) of around 30 million bags, and good arabica crops in both Colombia (13 million bags) and Honduras (7 million bags). Many producing countries have drawn to the attention of the international buyers the relatively low prices of coffee, and the threat that this represents to long-term supply. However, consumption continues to grow at around 2% per annum. So by 2030 it is estimated the world will need an additional 40 million bags of coffee just to satisfy that demand. As for Tanzania, with our good quality of arabica and robusta coffee, we should surely be positioning ourselves to take advantage of this continuing growth.

The farmers’ ability to produce quality coffee is directly linked to the price of the cup of coffee that the final consumer buys. For years, there have been complaints on the wide variations between the price of raw coffee at farm gate and the price of a cup of coffee paid by the consumer. These concerns are fair. They have received much attention hence leading to initiatives such as certification — for example Fair Trade which refers to coffee that has been certified by FLO and Fair-Trade USA — which provides an assurance to the consumer that the farmer who produced the coffee has been paid and treated fairly. A certifier is one actor in the value chain. There are other actors such as processors, millers, exporters, roasters and finally the consumer. Each of these actors plays a crucial and necessary role in fetching the best price. They are all dependent to each other. The process is, thus, interdependent. In light of that, policy has to consider the role of each of the actors. Policy making has to be inclusive and fair to all actors across the value chain. There is a danger of being biased to the farmer – understandably – but this bias, if needed, has to be calculated with consideration of cost vis-à-vis benefits. In Tanzania, coffee has now been placed as one of the strategic crops along with cashew nut, cotton, sugar

Coffee is one of the most strategic crops in Tanzania: Let’s not kill it

By Aikande Kwayu

The basis for the coffee power

comes from its global demand. Coffee is a

universal drink traded across borders. To

fetch the good price at the competitive

global level, quality is key.


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and tobacco. This is a good step. The government is carrying out efforts to reorganize how coffee is being traded at farm gate. The aim is to empower and ensure that the smallholder farmer gets the best price. This is a noble motive. In this rearrangement, the primary cooperatives have been put at the core and the government has confirmed their place in the coffee trade. This comes with a lot of challenges given the recent history of cooperatives in Tanzania that have weakened them. The cooperatives in the country had, arguably, flourished until 1976 when the Government suspended them. By the time they were reinstated in 1982, they could not catch up partly due to the changes in the economic system that came with the Structural Adjustment Programme (SAP) in the mid-1980s and early 1990s. Moreover, the cooperatives were rampant with corrupt practices, the inability to honor their agreements with members, and their eventual failure to buy coffee. They experienced a slow death with mostly a symbolic presence in the villages. With that background, there is a lot more work to be done for the cooperatives to be efficient in this new system. Given the government’s desire to revive them, there should be a collective effort from all stakeholders in the coffee sector to keep advising and working with the government in ensuring that the system works for the benefits of the smallholder farmer. Otherwise the efforts will be counterproductive. Since the cooperatives have been placed at the core, below are a few recommendations on how to make them more effective:• Place the cooperatives in a

competitive environment – that is,

they should compete to buy coffee from the farmers. This will make them more innovative and creative. It will also remove the monopoly in which they could abuse the farmers.

• Reconceptualize cooperatives to include farmers’ organizations, i.e. easing the rules in forming a cooperative in order to allow more groups to operate as cooperatives.

• Provide massive and systematic capacity building to primary cooperatives to understand and be conversant in all areas across the entire coffee value chain, including aspects such as quality, finance management and control, risk management and marketing.

• Look at the big picture that cross cuts across government departments since various

functions of cooperatives and also of coffee sector are managed by several departments. There should be policy harmony.

It is in the hands of policy makers to ensure that coffee is revived to its deserved strategic and patriotic place. This is not only due to its economic potential but also strategic prowess at the international level. To be successful within the government’s willingness to revive coffee, no stakeholder should be left behind. Let us do this in honor of our patriotic crop – coffee – and of the hundreds of thousands of farming households who work so hard to produce it.

The author is a Board Member of Café Africa Tanzania

A cross section of members of cooperative societies listen to the Minister for Agriculture Hon. Dr. Charles Tizeba (not in the photo) during the World Cooperatives Day held in Mwanza in July 2018. The Minister was responding to a set of questions from the participants.


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Prior to 1988, during two major periods, namely, post-independence (1961-1966) and

the post-Arusha Declaration (1967 to the mid-1980s), efforts were aimed at transforming peasant agriculture to large-scale and improved agricultural production, respectively. While the post-independence period was characterized by liberalization of markets for agricultural produce, the unique feature of the post-Arusha Declaration was the state control of major means of production. During the two periods, the government was a major provider of almost all major services, including extension under the rubric of public services. It should be noted that during the post-Arusha Declaration period, neither the private sector nor civil society was encouraged to offer such kind of services. Since the mid-1980s, however, the public sector has been withdrawing from direct production and provision of goods and services as well as reliance on centralized control and state ownership of the major means of production. This shift is reflected in the increased participation of the private sector and

non-government organizations (NGOs) in the production, processing and marketing of agricultural inputs and produce. Since 1988 to date, the major extension providers can be identified as follows: 1) Ministry of Agriculture and

Livestock2) Local Government Authorities

(LGAs) under the Ministry of Regional Administration and Local Government

3) Non-governmental organizations (NGOs)

4) Donor-supported projects5) Private agribusiness6) Community-based organizations

(CBOs, e.g. farmer’s groups, associations, cooperatives, societies and networks)

Categories 1 and 2 above can be classified as public extension services, while Categories 3, 5 and 6 fall under private extension. Category 4 remains in between as they involve both the public and private extension services.

Success of extension services Integrating several services,

including credit, inputs, and

training, follow-up for improving their accessibility to farmers.

Organizational empowerment of farmers by promoting and working with groups and other farmer organizations on good agricultural practices that involve planting by spacing and application of fertilizers.

The increase of agricultural sensitization to neglected groups, e.g. women, youth, the elderly and rural poor.

Introducing cost-sharing and creating a sense of ownership.

Intensifying activities and resources to the extent of showing visible and tangible results.

Using Participatory Rural Appraisal or other participatory problem-solving techniques for training which instill a sense of ownership and culture of participatory development at the grassroots level.

Challenges of extension service delivery • Tendency to treat all farmers as a

homogenous group with the same characteristics.

• Too thinly spread out resources mainly due to extensive coverage.

• Tendency of national extension programmers to be too bureaucratic and uncoordinated with other services.

• Supply-driven national extension programs that does not embody cost-sharing, farmers’ capacity building and self-reliance, where program ownership by farmers is very little.

• Little attempt at helping farmers solve their production and marketing constraints.

• Poor supervision of field staff.• Poor technology in agricultural

practices hence low level of production.

—The author works with KADERES

Industrial Revolution in Tanzania: Identifying the role for extension services

By Herman Beneth

Farmers’ participatory approach on fertilizers application and good agronomic practices at KADERES demonstration plots as a part of extension delivery services.


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Towards the end of 2015, ANSAF commissioned a study on coffee value chain. The study covered

six districts in Kagera, Kigoma, Kilimanjaro, Mara and Mbeya regions. The study found that 90% of the coffee is produced by smallholder farmers and only 10% comes from large estates. A smallholder farmer in the context of coffee subsector in Tanzania can be a household owning relatively small farms of about half a hectare on which they produce both subsistence and cash crops. In most cases, the household depends on family labour to produce the crops. According to the Bank of Tanzania reports, coffee accounts for about 5% of Tanzania’s total exports by value and generates earnings averaging US$100 million per annum. Although local coffee consumption is between 7 - 8%, there are signs of increased coffee drinking culture at a rate of 1.5% to 2%. The Tanzania Coffee Industry Development Strategy (2011) sets a goal of increased coffee production to 100,000 MT by 2021. According to the study, coffee

productivity has decreased due to the farming of old coffee trees, lower quality of the coffee, unreliable and in most cases fluctuating world markets, illegal cross-border trade through smuggling of coffee, and poor extension services. The government has made efforts to address the bottlenecks including the reduction of taxes and levies associated with coffee marketing in Tanzania. Already more than 20 taxes and levies have been removed with the view to facilitating the growth of the sector. Given multiple responsibilities of the government and limited budget needed to address the challenges, the study recommended that other coffee stakeholders should complement the efforts of the government to provide extension services. It was further noted that poor performance of extension officers working with local government authorities was due to their lack of expertise on coffee crop management. One of the recommendations of the study was to train extension officers as well as smallholder farmers on good agricultural practices as a way of

increasing productivity. The majority of extension officers had learned about coffee production in books but did not have the necessary practical experience to advise farmers on best practices. In addition, farmers could be trained to gradually replant aging coffee trees with new higher-yielding, disease-resistant varieties. It is estimated that a farmer can save up to TZS 1 million per hector from the cost of treating Coffee Berry Disease (CBD) diseases if new coffee varieties are planted. The prices of coffee will also increase as a result of the high quality of coffee of the new varieties. The yield of new coffee varieties is higher than that of traditional coffee varieties at almost threefold. It is recommended to replace coffee trees gradually for some years to come. This practice minimizes disruptions to cash flow. Similarly, farmers are recommended to gradual intensify their production methods through increased fertilizer use. The implication of this approach is that yield gains may take longer to manifest, but adoption rates are likely to be higher because farmers do not have to make short-term sacrifices in income or costly upfront investments. In 2018, ANSAF teamed up with its member based in Kilimanjaro, Café Africa, to launch a four-module training of trainers for extension officers in Moshi District Council. The refresher course started early November where 30 extension officers were enrolled and trained. The training is aimed at equipping extension officers on creating farmers’ awareness on best practices in coffee management. Topics covered were coffee production in relation to climatic changes; accountability within the framework of cooperatives; post-harvest management practices; coffee market and quality control. They also learned about seedlings production; and diversification activities with coffee farming.

—The author is Head of Media and Communications at ANSAF

Capacity building for extension officers to improvecoffee value chain in Tanzania

By Mbarwa Kivuyo

Extension workers from Moshi District Council attend a practical training on coffee farm management skills. The training was a collaborative initiative between Café Africa Tanzania, ANSAF and the Moshi District Council with funding from SDC, Irish Aid and UKAid. Photo by Café Africa Tanzania

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On November 26, 2018, the Minister for Livestock and Fisheries launched a new Strategic Plan to guide the work of ANSAF over the five-year period from 2018 to 2022. The document is a result of a participatory planning process involving

ANSAF members, collaborators and partners, which is informed by national and regional policy frameworks and commitments including the Comprehensive African Agricultural Development Plan, Agricultural Sector Development Programme Phase Two (ASDP II), Five Year Development Plan (FYDP) 2016/017-2020/2021, the Tanzania Development Vision 2025 and Tanzania Food Security and Investment Plan (TAFSIP). In his speech read by the Director of Tanzania Fisheries Corporation (TAFICO) Ms. Esther Mulyila, the Minister said: “I personally feel privileged to be the Guest of Honour at this important occasion to launch the ANSAF Strategic Plan because ANSAF is one of the few organizations that strives to promote inclusive growth and equitable distribution of resources, power and risks, with a greater focus on smallholder producers and micro-small medium enterprises. The overall goal is to improve the livelihoods of smallholder producers in Tanzania who are mainly farmers, livestock keepers, fisher folks, hunters and gatherers. The speech reads as follows:

“When you read the ANSAF Strategic Plan 2018-2022, you will realize that its overall goal resonates well with the Tanzania’s Development Vision 2025 and Tanzania’s industrialization agenda. It recognizes the contributions of crops, livestock and fisheries subsector to economic transformation our country. In order to make the transformation happen, we need the smallholder producers including women and youth at all levels:- to have a collective voice to influence informed decision making. The voice of smallholder

producers can only be heard if it comes from an informed group, - to monitor the accountability of their leaders to ensure that industrialization agenda is

achieved,- to work closely with the private sector to facilitate investment in crops, livestock and

fisheries subsectors.

Let me take this opportunity to commend ANSAF for crafting this Strategic Plan that looks at agriculture and livestock sectors holistically. I also appreciate the support of Development Partners to ensure that this Strategic Plan is implemented accordingly. I would have not done justice to myself if I don’t speak a bit about the livestock and

ANSAF unveils its new Strategic Plan 2018-2022

By Mbarwa Kivuyo

fisheries subsector. The Government of Tanzania through the Ministry of Livestock and Fisheries is set to maximize the potential of the livestock and fisheries sectors to leverage their contributions to industrial development. Firstly, we must recognize the substantial contribution of livestock and fisheries to the national economy. Increased investments in small-scale producers could accelerate growth in the livestock and fisheries sectors so that they stimulate economic growth, contribute to national food and nutrition security, meet the increased demand for animal-sourced foods and reduce poverty. The growing visibility of the strategic importance of livestock sector in Tanzania’s economic development and the East Africa Community should attract increased public and private resources and the formulation of policy and strategies that harness this potential. Secondly, we must encourage the participation of Non-State Actors and private sector in the identification and formulation of livestock keepers’ friendly policies. Improvements in animal health, better access to extension services and markets could significantly boost smallholder producers’ productivity and meet the growing demand for livestock products. Thirdly, the participation of women and youth in livestock and fisheries value chains is promoted. We urge all stakeholders including Non-State Actors to support the initiatives geared toward women and youth engagement in production activities. Fourthly the government encourages responsible investments by the private sector so that the environment is preserved. The use of sustainable intensification approaches must be encouraged at all times. I am confident that this Strategic Plan which I am going to launch shortly, will make a contribution towards the attainment of Tanzania’s Five-Year Development Plan (FYDP) 2016/017-2020/2021, the Tanzania Development Vision 2025 and the country’s industrialization agenda.

Ladies and Gentlemen,I could continue showing you how feasible this Strategic Plan is to sectors that feed the industries. I encourage the stakeholders present here to collaborate with ANSAF to make this five-year strategic plan a success. The government through the Ministry of Agriculture and Ministry of Livestock and Fisheries is ready to offer the needed support. The government is committed to creating an enabling environment for non-governmental organizations to contribute to economic welfare of the citizens. With these few remarks, I now have the honor to declare that the ANSAF Strategic Plan 2018-2022 is officially launched on this 26th day of November 2018.”

The guest of honour, Ms. Esther Mulyila (centre on the front row) holds a copy of the ANSAF’s Strategic Plan 2018-2022 at a colorful ceremony to launch of the document on November 26, 2018. Ms. Mulyila is the Director of Tanzania Fisheries Corporation (TAFICO). Others (from left) are Marloes Phillipo from Swiss Agency for Development and Cooperation, ANSAF Executive Director Audax Rukonge, Beatrice M. Muliahela from Farm Africa and Rehema Fidelis from PELUM Tanzania.


13

One of the chronic problems facing Tanzanian farmers is low prices and unreliable market for

their produce. This has to some extent resulted into farmers becoming poorer as the fruits of their labour go to benefit minority buyers. As an initiative to save farmers from loss, economists came up with what they called an ‘Indicative Price’ to protect producers against exploitative practices of ruthless buyers who want to maximize profit. According to information retrieved from www.investorwords.com, indicative price is a common known price in the market, which is used to start negotiations with the sub-contractor or a supplier that can lead to the discussion to further details for a specific job, which may result to turn an agreement with less or more than the indicative price. Its preliminary estimate of the bid and offer price provided by market makers is often used by traders to evaluate the security and to formulate their trading strategies. The approach was generally adopted by Tanzania’s government

especially to cash crops in order to ensure its farmers are secured and benefit from their produce by having reasonable prices which would not deteriorate them. One of the cash crops in which i n d i c a t i v e prices were introduced was cashew nuts. P r e v i o u s l y c a s h e w farmers and buyers met during a stakeholder’s meeting and tabled to propose an indicative price for discussion, before they agreed. The system was not found suitable for famers who failed to negotiate, resulting into accepting a poor indicative price for their produce.

In 2007 when the warehouse system of purchasing the crop was introduced, farmers agreed to sit and discuss the indicative price alone without the interaction of buyers.

It was agreed that buyers would have to wait for an announced indicative price with no room to negotiate. It is believed that such a decision has made the crop price stable, whereby farmers started receiving better price. Available data reveals that in the 2007/8 season, the raw cashew indicative price was TZS 800 per kilo, however it gradually increased yearly up to TZS 1,550 in 2018/19. This is just an indicative price, however the crop in last

season 2017/18 it was sold at high price ranging around TZS 4,000 per kilo. Despite the gradual increasing of

Mixed feelings about Cashew nut Indicative Price setting

ONE of the chronic

problems facing

Tanzanian farmers is low

prices and unreliable market for

their produce.

Cashew farmers in Nahyanga village, Tandahimba district collecting their crop to Agricultural Marketing Cooperative’s warehouse recently.

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By Abdallah Bakari


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indicative price yearly, still farmers are not comfortable with it, they say experts host wrong calculations which do not reflect clear costs for crop production. “If last season we sold our raw cashew nuts up to TZS 4,000 per kilo, how is it possible to come up with a poor indicative price like TZS 1,550? This is likely to say that buyers can buy at any price above the indicative price” says Faraji Njauka, the Chairperson of Tandahimba Farmers Association (TAFA). He adds that “Why didn’t they come up with an indicative price ranging TZS 3,000 per kilo referred to top price ever recorded in last season? I see the wrong way our experts calculate an indicative price and this is a root cause for both price and market delay.” He states that, market delay occurred in the beginning of the current season was highly attributed by a low indicative price which granted buyers award to exercise the price as long as they complied with what they so called the indicative price. “When farmers boycotted the offered price of TZS 2,717 per kilo, buyers were not accountable with anything as long as they were playing within the ground of the indicative price. Things changed after President John Magufuli’s new indicative price of TZS 3,000,” he explains. “Buyers would not have a chance to boycott the new indicative price offered by the President if such a price would have been inserted earlier. We are here today simply because of the indicative price, our experts from Cashew nut Board of Tanzania (CBT) proves great failure,” adds Njapuka. On October 22 of this year, cashew farmers in Mtwara region united to boycott an over low crop price offered by buyers in an open auction held separately saying the price would not compensate production costs. Tandahimba and Newala district farmers were the first to refuse the highest price of TZS 2,717 per kilo bided by buyers, followed by Nanyumbu, Masasi and Mtwara districts who denied the price of TZS 2,520 in an auction held in Nanyumbu. “We have said no and we mean no. Prices offered by buyers does not profit us. If we finally don’t get the market, we will process it ourselves,” said Jafari Mbawacha, a farmer from Newala District in Mtwara. Mbawacha linked poor crop prices offered by buyers to poorly prepared indicative price announced by CBT, saying if the indicative price would

be higher buyers would also go up to comply with the law. “We made this from our own hands, the one who supposed to protect us is the one who killed us, how can you distinguish this from poor indicative price announced this year? Buyers are right because they offered above our indicative price,” Mbawacha explains. According to CBT’s indicative price for raw cashew nut this season is TZS 1,550 for standard grade and TZS 1,240 for under grade per kilo. Tandahimba Member of Parliament (MP) Katani Ahmad Katani, has several times disagreed with the cashew indicative price offered by CBT as it deteriorates its farmers. In 2016 Katani protested over the cashew indicative price of TZS 1,300 per kilo announced by CBT, suggesting it should have been TZS 3,000 per kilo. “I would rather be happy if indicative price would be set to TZS 3,000 per kilo to enable farmers to acquire better price at the market” says Katani. S o c i a l E c o n o m i s t Bakari Kidunda says indicative price is obtained after c a l c u l a t i n g f a r m e r ’ s p r o d u c t i o n

costs per kilo and by evaluating the global crop market trend. “After calculating production costs, evaluating global market trend, 20 percent is added as profit to farmers. This is the minimal price for purchasing the crop; it is a baseline to protect farmers from loss,” says Kidunda. “Some factors are considered for placing of indicative price, like it should not be high which could chase away buyers, and not be low which could undermine farmers. This is not an actual price, but it is a starting point, then the market will determine the actual price.” Former Director General of CBT, Mfaume Juma, once said back in 2016 that a better bargain for cashew nuts is obtained at an auction and not through indicative pricing. Mr. Mfaume was replaced by Prof. Magigi whose contract was terminated in October

2018. Acting CBT Director General Dustan Kaijage says, “No comments as for right now, but what I know is that, an indicative price is set after calculating farmer’s production costs and some little amount is added as profit. It is too early to talk about the next season’s plan.”

—The author is a journalist based in

Mtwara

“We have said no and we mean

no…price offered by buyers does not profit us…if we finally don’t get the market, we will process

ourselves,”

Cashew stakeholders listening to experts on crop production trend during the meeting which also discussed the particular year crop inductive price.

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Tanzania is the fourth largest cashew nut producers in Africa and ranks eighth in the world. It

provides 20 percent of Africa’s cashew nut and only trails in production of Nigeria, Cote d’Ivoire, and Guinea-Bissau, according to figures released in 2017 by the Food and Agricultural Organization (FAO) of the United Nations. The history of cashew nut production in Tanzania dates back to the 1960s, however, poor regulation and lack of reliable prices to farmers have posed significant challenges to the cashew nut farming industry in Tanzania. The cash crop is mainly cultivated in the southern coastal regions of the country including Mtwara, Lindi, Ruvuma and Pwani. The sale and marketing of the product is run by the Cashew nut Board of Tanzania (CBT), through various farmer co-operatives, the warehouse receipt system and open auctions. More than 90 percent of the exports

are destined for India and almost entirely in raw form. The lack of domestic processing firms costs the country vital foreign revenues and thousands of jobs. The biggest challenge facing the government is finding potential investors to revive the cashew processing industry. The CBT reports that in 2017/18 the country produced about 313,826 .386 metric tonnes of raw cashew nuts. In which 88 percent is exported as raw nuts, while only 12% is processed locally, leaving a lot of value addition and employment opportunities with the importing countries. The information reveals that cashew processing in Tanzania began in the early 1960s, when a private

company known as African Cashew Processors Company Ltd established a simple manual processing plant in Dar es Salaam. Processing gained momentum in the late 1960s, and between 1968 and the late 1970s, the Government of Tanzania built 12 cashew processing factories with an accumulated

capacity of around 116,000 metric tonnes per annum. The factories were owned by the Cashew nut Authority of Tanzania (CATA) which was a government parastatal. However, in the 1980s, the rapid decline in production of cashew nust resulted in the closure of all the 12 factories. In the 1990s, the government decided to sell the dozen factories to private firms, with the aim of rescuing the market of raw cashew nut produced

New hope for small-scale cashew processors as government bans raw export

TANZANIA is one of the 4th

largest cashew nut producers in Africa and ranks 8th in the world.

Home based Small cashew processor attempting to shell-out cashew nuts as way to add crop value.

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By Abdallah Bakari


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in Tanzania. These firms processed the cashew nut at the first and second stages of cashew nut processing, based on their processing capacities. Currently only five cashew nut processing industries are in operation, turning the other seven into warehouses. The shortage of processing plants necessitated the formation of farmer groups to undertake processing activities. Such groups organized as small-scale processors could only process around 500 metric tonnes annually. Mwajuma Mohamedi is small-scale cashew processor living in Mtwara Mikindani Municipality. She says despite being self-employed in cashew processing, failure to comply with market demand due to inadequate supply of raw materials has become a barrier for her prosperity. “The market problem is created by our low supply of kernels. I was asked to supply 100 kg of kernels per week. I only managed to supply within eight weeks, then I had no more cashew nuts. I used to process cashew nuts from my own farm which is very few, about 1.5 metric tonnes,” she says and adds,: “My capital is very minimal to purchase 50 metric tonnes of raw cashew nuts through auctions as directed by authorities; this is to say we are not prepared to grow, it’s likely the national focus on cashew

production for export.” Mwajuma urged the government to prepare a conducive environment for small-scale cashew nut processors to grow by lessening the conditions for them to purchase raw materials from farmers without affecting market prices. “The banning of raw cashew nut export by President John Magufuli, would relieve us in getting raw materials. We hope this would be the end of our lack of cashew nuts for domestic processing,” expresses Mwajuma. According to the Chairperson of Union of Small Scale Cashew Processors Association in Tanzania (USCPAT) Tumpale Magehema, the small-scale cashew processing sector is a fundamental aspect toward cashew value chain addition and national industrialization. “As long as we have few large-scale cashew processors, only medium and small cashew processors play a significant role towards national industrialization and crop value chain addition,” says Tumpale adding that “Small-scale cashew processors in Tanzania are the one who feed the domestic market, however, processing is done quarterly in a year due to the lack of adequate supply of raw materials. We produce cashew nuts

for raw export and not domestic consumption or kernel export.” She says that with the vision of raw cashew nuts for export, government leaders automatically abandoned the growth of the small-scale processing sector as they introduced conditions that favor foreign buyers and limit small processors who own low capital to purchase raw materials. “Since 2007 when the warehouse system of marketing for raw cashew nuts was introduced, authorities conditioned us to participate in auctions to compete with large buyers with a minimal purchase of 50 metric tonnes,” she reveals and adds “Nobody complied with the conditions; we opted to process small cashew nuts we harvest from our own farms. This helped us to run processing for three to four months only. We complained to authorities but none seem to be concerned, we automatically became voiceless.” Tumpale says the same situation would encounter them this year as the government decided to purchase and provide no room for domestic processors to access raw materials. “If the government won’t look after us, we will perish a natural death and the sector will collapse. But I hope that since the government’s intention is to process all purchased cashew nuts, doors will open for us to be supplied with adequate raw materials throughout the year, as we can process up to 3000 metric tonnes per annum.” The Minister for Agriculture, Japhet Hasunga, admits that the operation of the warehouse system in the cashew market has not been friendly to domestic small-scale crop processors to enable them to acquire raw materials. “For preserving farmer’s good price, we instructed anyone who wished to buy cashew nuts should go to compete in an open action with a minimum of 50 metric tonnes to purchase. We told small-scale processors to unit and purchase the crop, but it seemed to be harder for them,” says Hasunga. He adds, “As the government moves to process all its purchased raw cashew nuts, small-scale processors will be asked to submit their demands and a well-organized system will be introduced to enable them to process throughout the year.”

—The author is a journalist based in Mtwara


17

Agriculture is a business that occupies a critical space in most African economies. Even the

types of industries in such economies are dependent on agriculture. The agricultural sector employs a large proportion of rural populations in many developing nations. One of the critical challenges facing smallholder producers is the fact that they are not organized and are thus victims of market superpowers. Cooperatives can empower smallholder producers to have bargaining power against exploitative marketing regimes. Well-structured and governed cooperatives are viewed as the way forward for addressing fragmentation of smallholder producers in Tanzania. A successful transition to this new role requires the acquisition of particular managerial capacities, especially in the domain of collective entrepreneurship. Cooperative organizations are among the important economic and social actors in Tanzania. Although traditional forms of cooperation existed even before colonial times, the modern forms of cooperatives were

established in many countries during the colonial epoch. After independence, c o o p e r a t i v e s were promoted vigorously in Tanzania by the i n d e p e n d e n t g o v e r n m e n t with support from various d e v e l o p m e n t p a r t n e r s , especially the Nordic countries of Finland, Norway, Sweden, and Denmark. With subsequent changes in g o v e r n m e n t policies from market oriented policies to state controlled economy, the performance of cooperatives declined. In the wake of trade liberalization in the 1990s, cooperatives were unprepared, due to a failure in policies to compete with multinational companies that were allowed to do business in the

country. Today there are various forms of cooperatives in the country,

which include financial, agricultural marketing, dairy other livestock, fisheries, mining, housing, irrigation and industrial cooperatives. C o o p e r a t i v e enterprises as self-help organizations play a significant role in uplifting the socio-economic conditions of their members and that of their local communities. C o o p e r a t i v e organizations operate as people-centered businesses and

also serve as catalysts for social organization and cohesion. Despite these and many other advantages of agricultural cooperatives, they face some serious challenges; among them is the lack of capacity to take part in value chains in processing, marketing and supply work.

Agriculture is a business

that occupies a critical space in most African

economies. Even the types of industries in

such economies are dependent on agriculture.

Setting up cooperatives to work for smallholder producers

By Our Correspondent

Prof. Suleiman Chambo from MUCOBS moderating a discussion during the World Cooperatives Day held in Mwanza in July 2018.

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There are three areas to address in order to rebuild the cooperatives in Tanzania. First, producer groups development by promoting Modern Cooperatives (Ushirika darasa) through the application of flexible organizational models and intensive sensitization and training programs while taking into consideration value chain conditions and development opportunities, as well as the local context and specific needs of producers. The aim is to empower cooperatives so as to play a major role in the development of their agricultural sectors and rural areas. With this in mind, the project will be sufficiently flexible to not only promote cooperative models but also to embrace other forms of business-oriented collective action and producer groupings that contribute to economic development and the well-being of producers and their families. These can include producer associations, Limited Liability Companies (LLCs), partnerships, other standard legal entities, and even loose temporary relationships to address specific issues or activities. Adding value to primary products is needed in order to increase incomes of producers. Presently the high quality of local agricultural products, significant idle production capacity, availability of qualified workers and relatively low labor costs, agro-processing and other value addition for primary agricultural products together provide an important development opportunity. If

successfully addressed, value addition will increase incomes and employment in both primary production and processing thereby providing better livelihood opportunities for people in rural areas. In fact, current government policies consider agro-processing as one of the priority sectors for development for transforming the country economy from low-value-added to high-value-added production. The project will engage in supporting the cooperatives to develop value addition facilities and infrastructure as well as developing and strengthening the skills and capacities of producer organizations in its effective use. Strengthen value chains in other

areas than cooperative society’s development and value addition, such as primary production, post-harvest handling, storage, transport, business services, capital access, and trade which will enable the production, processing and marketing of higher value quality goods. The project will also intend to support the establishment of better business linkages and services between value chain actors and service providers, and the improvement of the functioning and governance of the value chain through concerted efforts of coordination.

—By Our Correspondent

Extension worker at Uru Mashariki ward in Moshi District demonstrates how to spray coffee trees to prevent pests and diseases.


19

For Marieth Putika, aged 65, running her own business has meant hard work and seizing opportunities

whenever they arise. She produces tomato sauce, chili sauce, jams and various juices, dried fruit, as well as nutritional flour. The big news for Marieth is that she recently negotiated a TZS1.4 billion supply deal with Tomoni Farms, a Tanzanian company, to deliver fresh pineapples. Marieth Natural Foods Company Ltd., based in Njombe, is once again expanding. In 2002, Marieth came up with her business idea while working for the Tanganyika Farmers Association (TFA). She saw first-hand the waste of produce from her friend due to a lack of a market. The magnitude of food loss pushed her to find a solution. She came up with an idea to produce tomato sauce to reduce food waste. Her mother was a specialist in nutrition which also had an impact on Marieth’s decision to go into food production. Marieth began producing tomato sauce in small quantities initially, just 5kg per day in 2002, while slowly building up her capacity to 500kg per

day by 2005. Starting with a small workforce comprised of two of her children, Marieth expanded the business to its present day capacity of 200,000 kgs per day and a staff of 15, including 100 local out-growers. Marieth’s recent success is due in part to her participation in the Tanzania Local Enterprise Development (T-LED) project, a five-year initiative started by Global Affairs Canada and Canadian

University Services Overseas (CUSO) International, and administered by Volunteers Services Overseas (VSO) in Tanzania. Marieth became involved with T-LED from the beginning of the project in 2015. She was one of the first 34 small and medium entrepreneurs from Iringa and Njombe who were selected to join the project. T-LED’s role is to improve knowledge of market opportunities, business practices, and technical expertise of small and medium sized enterprises (SMEs) through basic and advanced training and advisory services. The project increases women’s capacities to develop and grow sustainable businesses while working with local partners to ensure capacity building stays within Tanzania. The project also helps men and women gain access to financing for their small- and medium-sized businesses. “I would like to give my heartfelt gratitude to the T-LED project for giving me a chance to participate at the Saba Saba International Trade Fair that took place from 28th June to 13th July 2017. Through T-LED, I have learned a lot during Saba Saba. I have also met people who have positively changed my business, and I am looking forward to working with the people I have met at Saba Saba. T-LED has also helped me to increase the market for my business and meet other SMEs who have great products,” said Marieth. In Tanzania there are approximately 600 male and female led SMEs benefitting from expert trainers in their fields. The target is to recruit 1,760 SMEs over a period of five year with an emphasis on women-led businesses. T-LED recruits experienced volunteers from CUSO International, VSO, Accenture and Randstad, to help these businesses to become more professional and competitive. Some of the benefits of T-LED include creating new jobs in the local economy, as well as creating networks of potential partners, customers, and markets. What the SMEs are expected to do to benefit from this knowledge and expertise is to be interested in learning, open minded and willing to share their ideas, and, of course, willing to

Breaking through barriers: Expansion of a female-led food business in Iringa

Marieth began producing

tomato sauce in small quantities initially, just 5kg per day in 2002,

while slowly building up her

capacity to 500kg per day by 2005.

By Jemima Michael

Marieth Putika displays some products from her enterprise, Marieth Natural Foods Company Ltd.


20

make changes based on the lessons learned. With an emphasis on gender equality, the focus is also on increasing the confidence and negotiation skills for women in the market, as well as accessing new markets for women entrepreneurs in Tanzania. Marieth works closely with wholesalers-small shops and supermarkets in different regions including Mbeya, Iringa, Songea, Njombe, and Ruvuma. The key advantage of the products is that they are all natural, culled from farmers who do not use pesticides in their farming practices. In high demand for the products are the dried pineapples, which are a preferred snack of her customers. The TZS1.4 billion contract she was recently awarded from Tomoni Farms, is for the delivery of 120 tonnes of raw pineapple per week. She is currently starting with delivery of 60 tonnes of fresh pineapple as it is off season, and she is building her capacity. Once it is harvest time, she will be delivering up to 120 tonnes per week. This contract has an enormous impact on the local farmers as it opens up new markets for their produce and addresses food waste. From her current staff of 15, Mariet will be expanding to an additional 12 employees to handle the volume, six in supervision, and six to facilitate transportation. The Regional Council Trade Officer is in close contact with Mariet, helping her to produce expense forecasts, cash flow estimations, and otherwise, provide support for her expansion. ‘T-LED has helped me in accessing new markets, even though I only had products worth TZS500,000 at SabaSaba, I managed to sell everything, but the biggest achievement was when I was given an order to supply fresh pineapples to Tomoni Farms Limited and signed an MoU worth TZS1.4 billion. This plan needs to start quickly. T-LED has played a big part in this achievement. If they did not support me to participate at Saba Saba, I would not have gotten this order. So thank you to T-LED and thanks to Tomoni Farms Limited for this deal.” Marieth, who works hard for what she has achieved, is now thinking of expanding her dried pineapple and vegetable production, increasing her capacity by investing in a modern drying machine, and milling machine. Marieth can count on the ongoing support of the T-LED project as she expands her business.

Marieth works closely with

wholesalers-small shops and supermarkets in different regions including Mbeya, Iringa, Songea, Njombe, and

Ruvuma.

Marieth’s daughter at DITF

Marieth’s Daughter

—Jemima Michael is Information Officer at VSO Tanzania


21

In early June 2018 the President of Tanzania launched the Agricultural Sector Development Programme

Phase Two (ASDP II). The ASDP II is expected to transform the agricultural sector (crops, livestock, and fisheries) towards higher productivity, higher commercialization levels, and increased smallholder farmer incomes for improved livelihoods as well as food and nutrition security. ASDP II complements major national development plans such as Tanzania Development Vision 2025 and Five Years Development Plan Phase Two (FTYDP II). The launched ASDP II has four major components. The first component addresses Sustainable Water and Land Use Management. The aim is to expand sustainable water and land use management for crops, livestock, and fisheries. The second component deals with enhanced Agricultural Productivity and Profitability, which will focus on increasing productivity for some priority commodities.

The third component focuses on Commercialization and Value Addition. This is mainly concerned with improved and expanded marketing and value addition promoted by a thriving competitive private sector and effective farmer organizations; and the last component focuses on sector enablers, coordination, and monitoring and evaluation (M&E). In September 2018, the government released a guideline to enable each Local Government Authority (LGA) to prepare a District Agricultural Development Plan (DADP). The LGAs are to formulate a comprehensive DADP that includes development activities both on-budget (budget support, Basket Fund, and earmarked programmes and projects) and off-budget, with a joint implementation management and follow-up. The ASDP II and DADPs will be implemented through the existing government system and structures to allow the continuation of efforts at national and local levels to enhance

results and sustainability. The roles and responsibilities and how actions will be coordinated are provided below:

District Agricultural Development Programs and industrialization process

in Tanzania

The launched ASDP II has

four major components.

The first component addresses

Sustainable Water and Land Use

Management.

By Our Correspondent


22

LEVEL STAKEHOLDER ROLES

VIILAGE Village communities and groups (crops, Village Assembly identify projects and summarize fishery & Livestock) VADP

Beneficiaries will select project committee of 10 members, at least 40% shall be women.

Ward Facilitation Team (WFT) Facilitate process of developing VADPs

Village Executive 0fficer (VEO) & Village Prepare VADP & its budget; supervise & monitor Agriculture Extension Officer (VAEO) implementation and reporting

WARD Ward Facilitation Team composed* of Compile VADPs and village reports’ as well as to WEO-Team leader, WAEO (crops, monitor ward agriculture activities fishery & Livestock), Ward Community Development Officer (WCDO), Ward Natural Resource Officer (WNRO).

DISTRICT District Councils Supervise the implementation of all agricultural activities

District Facilitation Team (DFT) Prepare DADPs, budget and M&E reports and composed of representatives from undertake facilitation government, NGOs, research stations and Private Sector Focal Person (Selected by DED) • Responsible for facilitation, coordination, supervising and reporting both physical (narrative) and financial of all DADP in collaboration with M&E office • Stakeholders coordination meetings convened to keep good communication among stakeholders

District Executive Director (DED) Responsible for all activities and select the focal person REGIONAL Agriculture Sector Development Plan • Assist Assistant Administrative Secretary (AAS) (ASDP) Regional Coordinator (selected by performing day to day ASDP II activities RAS) • Provide technical and managerial assistance in preparing DADP and in planning, implementation, supervision and reporting of ASDP II • Assist LGAs in submission of quarterly and annual reports

District Commodity Value Chain Platform To bring together stakeholders in identification of CVC (DCVCP)

NATIONAL Agriculture Sector-Led Ministries (ASLMs) • Guide LGAs in planning & implementation of DADPs • Backstopping RSs & DFTs and developing policy & regulatory framework • Provide technical implementation of ASDP II at the local level

PO-RALG and LGAs Coordination and implementation of ASDP II

Coordination organs - National Agricultural Develop policy and regulatory framework stakeholders meeting; Steering committee; Directors Technical committees; PO-RALG Consultative meeting; ASDP National Coordination Team; and Technical component leaders

Financing of DADP will be through development grants, LGAs own sources, development partners and private sector investors and individual farmers.


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Statistics from the Bank of Tanzania indicate that agriculture plays a vital role in Tanzania. The sector contributes about 25.3% of the country’s gross

domestic product (GDP), 30% of the exports and 65% of country’s industrial inputs (raw materials). On average, 65.5% of Tanzanians are employed in the agriculture sector. Furthermore, it indicates that 53% of the agriculture labor force is made up of women. In addition, 80% of the poor people depend on agriculture activities. Despite the strong demonstrated importance of the agriculture, much efforts have not been done by government to ensure that sector substantially contribute to the economy. This can be evidenced through agriculture sector growth in the country which is declining over time, where the sector average growth was 3.4% in 2014 and 3.1% in 2017, far from the Malabo/CAADP target of 6%. Also, public agriculture financing shows similar characteristics, where budget allocation to the sector over the total national budget declined from 7.2% in 2012 to 4.7% in 2017, again below the 10% target for Malabo/CAADP.

1. Economic Performance IndicatorsTanzania’s economic growth has been robust growing at an average of above 6% per annum. Figure 1 below indicates that the country maintains its real GDP growth at 7% since 2013 to present. However, economists postulate that the growth would have been more than that if the major sector (agriculture) grows at an average of 6% as Malabo/CAADP target could be maintained. The country needs to grow at the pace of 8%-10% annually, if at all it dreams for becoming a middle-income economy by 2025. And the only way to achieve the target is through investing in agriculture sector, which employs a majority of people.

Source: World Bank Group

The sector growth in recent years from 2014 to 2016 depicts a downward trend, where according to the National Bureau of Statistics (NBS) and Ministry of Agriculture data the agriculture sector growth declined from 3.4% in 2014 to 2.3% in 2015. However, in December 2017 the growth increased to 3.1% compared with 1.7% in the same period in 2016. This growth is very far from Malabo/CAADP target of 6%, which indicates that deliberate efforts by the government are vital.

Source: NBS

Figure 3 below delineates that the contribution of agriculture sector to the gross domestic product (national income) is not sustainable. The pattern can be attributed to the down turn of sector growth, which in turn can be explained by little public investment to agriculture sector. ANSAF is in the view that much effort is needed especially in agro-processing to add value for the agriculture and livestock products that will increase export values and lower the import bills to the country.

Source: NBS

Are the Malabo targets achievablein Tanzania?

By Joseph Nyamboha


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Public Agriculture FinancingThis section intends to highlights the government’s commitments toward implementing its policies. Thus, more emphasis is on the extent at which budget addresses the smallholder producers’ priorities. Furthermore, the sector financing will examine the characteristics of budget executions and their implication to the inclusive growth. Budget allocation to the agricultural sector has been increasing in absolute term (see Fig.4 below) over time, but the share of total agriculture budget to the national budget shows a decline trend. For instance, the 10% targeted agriculture expenditure, as stipulated by CAADP under the Maputo Declaration 2003 and reiterated in 2014 in Malabo-Equatorial Guinea, yet to be achieved. The budget allocation to the agriculture sector was 7.2% in 2012/13, which kept on declining to 4.7% in 2017/18. Also, looking at the sub-sector (Fig.5) the public investment to the agriculture has shown the similar trend of low financing over time.

Source: Budget Speeches (MALF & MoFP)

Source: MALF Data

Agricultural development depends entirely on the government’s investment to the key strategic areas that act as catalytic to the sector transformation. By looking at the government’s commitment through resources allocation, in areas such as irrigation, market, inputs, extension services, and research, have missed consistence and substantial budget allocation to promote the agricultural sector development. Figure 6 below indicates that the resources allocated have no constant flows and the fund disbursed is too little to implement the project.

Source: Citizens Budget

Source: MALF

Figure 7 above indicates that release of development expenditure fund have been lower than approved funds. For instance, at the ministrial level, the percentage of development expenditure fund released over approved was on decline. It was revealed that in 2013/14 the disbursement was 84.5%, 2014/15 was about 74.5% and 2015/16 was 27%. In 2018/19 development expenditure for agriculture with component of crops, livestock and fisheries was TZS110,246,196,407 compared to TZS100,527,497,000, equivalent to an increase of 9.7%. At the sector level also, trend of disbursement indicated the same characteristics, where in 2016/17 was 3.3% of the development expenditure, while in 2017/18 TZS27,231,305,232.65, equivalent to 18% of TZS150,253,000,000 approved for development expenditure was disbursed. In the current year (2018/19) the development budget allocation has decreased by 34% compared with the last financial year, 2017/18. Also, the performance agriculture financing from own sources experience challenges. The statistics show that resource allocation to sub-sectors (agriculture, livestock and fisheries) are not in line with the Local Government Public Financing Act (LGPFA) 1982 and Budget Guideline.


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The financing is characterized by low revenue and treasury failures to disburse, which might be associated with low capacity to collect/innovate new sources of revenue. Also, some of revenues being not remitted by TRA after collection, for instance, during Controller and Auditor General (CAG) audits of 2016/17, it was revealed that TZS410.448 billion had not been returned to LGAs by TRA. This frustrates the local government authorities in agriculture financing. In addition, it indicates that agriculture is not a priority to some LGAs in terms of development budget allocation. For example, in Muleba District Council (DC) out of 59.49% of own sources revenue for 2015/16 financial year, only 2% was allocated to agriculture of which crops got 62%, livestock 10% and fisheries 28%. Furthermore, cash transfer from treasury to Muleba DC, development scooped 19% of the total fund, where agriculture had only 8%, of which crops was 5% and livestock and fisheries had 3% for the same period. In 2016/17, Muleba DC allocated 50.3% of own sources to development. Out of 50.3%, agriculture was allocated 6.3% (TZS80,000,000), of which crops share was 25%, livestock (37.5%) and fisheries (37.5%). In the same financial year, total cash transfer from treasury to Council was TZS49,237,721,200, where development share was 14.59% of which agriculture got 7.25% (crops 66.2%, livestock 33.8% and fisheries 0%). While in 2017/18, own sources amounted to TZ2,751,282,843, of which development was TZS1,312,516,865, equivalent 47.7% out of that 5.22% allocated to agriculture (crops 85.4%, livestock 14.6% and fisheries 0%). From treasury, TZS11,111,113,114.8 (18.9%) was allocated to development and agriculture was 6.85%. apparently, some LGAs compliance with Budget Guideline and Local Government Public Finance Act (LGPFA) 1982 are not honored. Through social accountability monitoring (SAM) and the public expenditure tracking system (PETS) field visits conducted by ANSAF in collaboration with its members, it was revealed that the government invests a substantial amount of money to potential areas. However, it appears as if there are no thorough analysis and feasibility studies conducted. It was shocking to find that some schemes were rain-fed; there are no dams to converse water for future use, especially during the summer. For example, the Dakar irrigation scheme in Mvomero District Council and Mtawango irrigation scheme in Liwale District Council, operate seasonally because they are rain-fed irrigation schemes. Regarding underutilization, the Chikwedu Chimanda scheme in Newala is underutilized because rice is not a priority crop for citizens of Newala. A piece meal disbursement of fund for irrigation projects has made it difficult to complete the projects. For instance, the Msufini irrigation project (targeting 450 farmers with 250 acres), started in 2009/10 with a budget of TZS 2 billion. Only TZS567.6 mil was disbursed. The Katunguru irrigation dam in Sengerema with a total budget of TZS2.6 billion ended up getting TZS883 million in 2012 and no more funds were released. The cost of the Kasoli irrigation dam in Bariadi was TZS2.048 billion. It started in 2012 and was expected to be

completed in 2015. Surprisingly, only TZS560 million was released and spent for the initial stage of the project. These characteristics of budget implementation contribute to the growth of poverty among smallholder farmers. In inputs financing, the budget allocation from 2008/09 to 2014/15 was increased with the aim of enhancing the production and productivity for sustainable food security in the country. Both disbursement and expenditure were significantly correlated with the approved budget. Figure 7 below indicates that the allocation to inputs through the National Inputs Voucher System (NAIVS) and credit-based subsidies was high from 2008/09 to 2014/15 due to World Bank support through International Development Assistance (IDA). In 2011/12 the government did not release its 50% portion and also World Bank stopped support in 2014/15, where the government took over to maintain the supply of subsidized inputs but in different nature (credit through cooperatives). However, the inputs financing has also been declining from 33.9% in 2008/09 to 8.4% in 2013/14. The challenges facing the inputs delivery included: (i) lack of clear criteria for inputs access, (ii) delay and inadequate subsidized input, and (iii) embezzlement.

Source: ACB 2017 (MoA reports and Budget Speeches)

The analysis revealed that challenges such as insufficient budget allocation, inadequate number of staff, poor working environment (transportation, houses) still exist. Experts assert that these are caused by little or no available funds released to the sub-sector. However, despite the inattention by the government to the extension services sub-sector, stones are casted to extension officers that they do not fulfill their roles and responsibilities. Stakeholders associate this with lack of well coordinated mechanisms of holding accountable extension officers lead to ineffectiveness in implementing their roles. This is also a postulate that lack of direct communication for Ministry of Agriculture and Livestock to extension officers creates challenge in providing technical advices.

Rural Infrastructure (roads and electrification)Figure 8 below delineates the characteristics of the budget execution at the LGAs level. Apparently, the budget execution

0

50

100

150

200

250

300

350

400

2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17

Figure 7: Ministry of Agriculture:Inputs Expenditure (TZS Billion)

Approved Released Total Expenditure Expenditure on Inputs %


26

is featured not only the inadequate resource allocation or cash transfer to the local government for implementing the agriculture activities, but also the delay in disbursements. Insufficient fund release based on approved budget leads to the poor implementation and incompletion of the projects. While the delays sometime cause the unspent and/or underutilization of the money and hence un-implemented projects.

Source: District Councils Reports

Credits to smallholder producers, especially the soft ones are important to transform agriculture and improve production, which also support efforts in building an industrial economy. However, according to the World Bank, the banking sector in Tanzania lends a much smaller share of their loan portfolios. This is due to the fact that most of commercial banks regard agriculture as high-risk business to lend. The statistics show that credits to the agricultural sector continue to decline as time goes by, for instance, in 2013 the share was 8.7%, 7.7% in 2015, and 6.9% in 2017.

Livestock and Fisheries

Table 1: Budget Trends (TZS Billion)

Fiscal Total Total Allocation DevelopmentYear National Allocation to Budget to Livestock Agriculture 2012/13 15,191.94 1,103.60 54.566 4.61

2013/14 18,248.98 908.1 67.18 3.88

2014/15 19,853.33 1,084.70 64.265 3.93

2015/16 22,495.50 1,001.40 60.374 19.40

2016/17 29,539.60 1,560 59.81 15.85

2017/18 31,711.90 863.40 46.76 6.00

Source: Randama and Budget Speech

The allocations to support the livestock sub-sector since the fiscal year 2012/13 to 2017/18 has been less than TZS 70 billion (0.4%) of the national budget. The government through the Ministry of Livestock and Fisheries Development (MLFD) - currently Ministry of Agriculture, Livestock and Fisheries - has allocated a sum of TZS 54.57 billion in 2012/13, TZS 67.18 billion in 2013/14, TZS 64.27 billion in 2014/15, TZS 60.37 billion in 2015/16, TZS 59.81 billion in 2016/17 and TZS

46.76 billion in 2017/18 for both development and recurrent to support the livestock subsector (Table 1). Apart from the small portion that the livestock subsector votes in the total national budget, the percentage allocated to the livestock and fisheries subsectors as a proportion of that of agriculture remained insignificant. For instance, the highest portion that ever voted for the two subsectors as a proportion of agriculture has been as low as 7.4% in the fiscal year 2013/14.

Table 2: Budget Performance (TZS Billion)

Fiscal Amount Recurrent Develop- Development Year Allocated ment Released

2012/13 54.56 40.73 13.84 4.6

2013/14 67.18 38.21 28.97 3.9

2014/15 66.14 40.95 24.70 3.9

2015/16 68.81 46.16 19.40 0.0

2016/17 59.81 43.94 15.87* 0.0

2017/18 46.76 40.76 6.00 0.0

2018/19 NIL NIL 12.13 NIL

*The CAG report shows that TZS 908 billion was released to finance livestock sector development which is contradicting with randama and budget speech for the year 2016/17. The data sources are also questionable. It is again very unfortunate that the performance of the little fund allocated to the sector approved to support the two subsectors has been burdened with less than 50% disbursement as the government released only 41% of the total approved budget at all times. Nevertheless, the released budget`s largest part was for recurrent expenses while the development part suffered low disbursements most of the time (Table 2). The low budget allocations and poor performance of the little allocated to these subsectors is affecting the contribution they have to the country’s economic prosperity. The further analysis indicates to be a positive correlation between the contribution of livestock sector to the GDP and the budget allocation to support its development projects in the sector`s strategic values chains.


27

1 Won W. Koo and Jianqiang Lou (1997): Department of Agricultural Economics Agricultural Experiment Station North Dakota State University

Climate ChangeIn order to have sustainable and intensification of agriculture, the government and other stakeholders have been striving toward putting in place strategies and plans to address the issues of climate change. For instance, the Ministry of Agriculture (MoA) in collaboration with Non-State Actors (NSAs), has developed a guideline and are in the process of developing a Monitoring and Evaluation (M&E) Framework. According to ForumCC climate resilience financing, the budget allocation has increased by TZS13.75 billion from TZS25.50 billion in 2017/18 to TZS39.25 billion in 2018/19, equivalent to an increase of 40%. These funds were allocated to the activities that relate to climate change adaptation and mitigation. There is no budget line item for climate change resilience measures.

Research and DevelopmentAgricultural research spending levels fluctuated from year to year, minimal funding was available to carry out research activities, and total inflation-adjusted spending fell from 2010 (Nienke Beintema, ASTI/IFPRI) (see Figure 9 below).

Figure 9: The Pattern of Investment in Agricultural Research (2000-2016)

Source: ASTI/IFPRI

As of 2016, Tanzania still invested only 0.19 percent of its agricultural output in agricultural R&D — a fraction of the 1 percent target recommended by NEPAD and the UN. Also,

agricultural research spending as a share of Agricultural Gross Domestic (AgGDP) has declined from 0.29% in 2014 to 0.19% in 2016. Moreover, in 2014/15 a total of TZS0.52 billion was spent mostly for agriculture, livestock and fisheries research as compared to TZS9.02 billion in 2010/11 through COSTECH. Also, out of TZS121.4 billion allocated, only TZS46 billion was disbursed for research in the period of 2010/11-2014/15 (Fig.10).

Source: COSTECH

1.1 Link between sector budget and industrializationIndustries and agriculture are interdependent because the source of raw materials for industries comes from agriculture. For example: sugarcane for the sugar industry, animal skin for the leather industry, and so on. Dairy industries also require raw materials that come from agriculture. Oil industries cannot run without oil seeds like sesame, sunflower, soybean, which are all agricultural products. The cigarette industry cannot run without tobacco and similarly textile industries require cotton and silk. Thus, there is no doubt that industries cannot run without agriculture. A study in China found that the growth of the Chinese agricultural sector depends on its industrial growth1. In the relationship between the agricultural sector and industries exist but such a linkage is said to be very weak as the growth of the industrial sector has little contribution to the agricultural sector. This is shown in the situation whereby agricultural products export is mainly in raw state, that very little or no value addition (agro-processing) before exports. It would be expected for the government’s zeal of becoming industrial-led economy by 2025 to be reflected in the budget commitment in the areas that contribute to agro-processing. Thus, much of resources allocation would aim at increasing power supply by utilizing the available sources (e.g. gas infrastructure in place); much efforts of the government to be directed to agro-processing; invest in infrastructure that have linkages to agro-processing; and develop policies that create enabling environment for agro-industries and also protect influx flows of counterfeit agro-products from outside.

2. Problems facing agricultureThe main problem facing agriculture sector financing is that there is a lot of failure of the government to honor its

05

1015202530

2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17

3025.5

16.4 16 14

6.5

12.8

19

7.3 7.8

03.8 2.2

5.8

Figure 10: Trend of Budget Alloca on and Disbursement (TZS Billion) for Research through COSTECH (2010/11-2016/17)

Alloca Disbursed


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commitment on the release of funds to the agriculture line ministries and/or transfer the funds to LGAs for development activities. The cash transfer to LGAs is characterized by: (i) insufficient fund release, normally by piece meal that cannot implement the project, (ii) delay of disbursement, most in the third quarter (January-March), given the procurement process and procedures, LGAs end up with unspent funds. At the LGA level, transparency, embezzlement of projects fund and weakness in enforcement of the directives from budget guidelines exist. For instance, allocating 20% of the 60% of development expenditure from own sources to agriculture sector development expenditure was a mere dream; investing 20% and 15% from LGA own sources to the crop and livestock respectively for sub-sectors’ development not honoured; and also, allocating 10% to women (5%) and youth (5%) seemed to have challenges. In addition, reallocations and misappropriation of funds for intended projects, especially in irrigation schemes and inputs.

ConclusionOne of the major commitments for the government of Tanzania is to enhance investment in the agriculture and livestock sectors through sufficient resource allocations. However, given the evidence generated from this analysis, meeting the national targets seems to be unrealistic. There is a long way to go to attain the Malabo targets

3. Statements for Action• The government needs to have a constant funds flow

to key strategic investment areas (irrigation, inputs, research, extension services, infrastructure, human capital development, etc.) that lead to sustainable production of agriculture products for food security and feeding industries for the whole year.

• Much effort of investment especially on creating an enabling environment for agro-industrialization should be directed to the areas that facilitate horizontal and vertical links between agriculture and industrialization and vice-versa.

• The government must seek collaboration with the private sector through a public-private partnership (PPP) arrangement to secure sufficient funds to complete the started irrigation schemes and construct dams to feed the irrigation during the dry seasons in order to maintain food production.

• Timely and sufficiently fund release to the development projects is unavoidable in order to have good outcomes.

• Local Government Authorities to comply with the Local Government Public Finance Act (1982) and Budget Guideline that require them to allocate and disburse 20% of own sources revenue to crops investment, 15% to livestock expenditure, 5% to fisheries and 10% to women and youth.

• Ministry of Agriculture and PORALG through proper coordination must rethink on how effectively to utilize extension services and motivating workers in executing their roles and responsibilities.

• The fifth-phase administration should continue strengthening the expenditure control for value for money (VfM) realization in agriculture projects.

• Lending and credits institutions (Tanzania Agricultural Development Bank, Tanzania Investment Bank, Women Development Bank, Women & Youth Development Funds) to have special treatment for smallholder producers (SHPs) - soft and long-term loans.

—The author is a Policy and BudgetAnalysis Coordinator at ANSAF

One of the major commitments for the government of

Tanzania is to enhance investment in the agriculture and livestock

sectors through sufficient resource allocations.


29

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