Transcript REFORMS FROM A FARMERS PERSPECTIVE

REFORMS FROM A FARMERS
PERSPECTIVE
Lazaro Nduta
Chairman
Tanzania Cotton Growers Association
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REFORMS FROM A FARMERS
PERSPECTIVE
FOCUS ON LESSONS RELATED TO:
– FUNCTIONING OF INPUT AND OUTPUT MARKETS
– PRICE DETERMINATION AND PAYMENT SYSTEMS
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A: SITUATION BEFORE CO-OPERATIVE
UNION’S DISSOLUTION
• Inputs were supplied to the farmers on credit
through their Co-operative Societies
• Union forming centres assisted the farmers by
providing tractor services on credit
• The union had some extension officers who constantly
assisted the cotton farmers
• Output markets were done by the co-operative
societies only ,thus they maintained a quality which
made the Tanzanian cotton fetch a premium of
about UScts 8 per lb for the lint sold in the
international markets.
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THE SITUATION AFTER
LIBERALISATION
• Before 2002 the supply of inputs was nobody’s
business
• Early 2002 based on a levy collection at the
seed cotton marketing stage , farmers are
supplied the inputs on the so called Passbook
System
• At the time of distribution of inputs ,the
farmers are provided with the inputs in
correspondence to the amounts transcribed in
their Passbooks
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THE SITUATION AFTER
LIBERALISATION (cont.)
• The Passbook System is an advance payment by the
farmers while formerly they benefited on input credit
before liberalization of the cotton sector.
• Over-liberalization of the sector under harsh
competition has favoured quantity at the expense of
the quality.
• Today Tanzanian cotton is discounted at around US cts
6 per lb.
• It appears that some buyers are virtually ignorant about
the quality requirements as dictated by changing
consumer patterns and technological innovations
world wide.
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OBSERVATIONS/ RECOMMENDATIONS
• Passbook system is good enough however the
inputs prices are still very high compared to the
actual farmers price
• A some sort of input subside is to be availed so
that farmers can make use of the input so as to
raise their productivity
• This should be done as an inducement for the
farmers to use the inputs so as to raise their
productivity
• Farmers association should be strengthened so that
it can do some of the activities that the former cooperative societies did for the supervision of the
inputs distribution and the quality supervision.
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OBSERVATIONS/ RECOMMENDATIONS
(cont.)
• Over –liberalization on the market of the seed
cotton from the farmers must be avoided.
• A long term relationship between the farmers
and ginners / buyers should be established in
the marketing system.
• Farmer groups like the TACOGA if well
established will improve the quality of seed
cotton sold and at the same time be easily
assisted in the provision of inputs on credit
form.
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B: BEFORE DISSOLUTION OF CO-OPERATIVES
• Prices given to farmers by co operative
unions was part payment as when the
cotton was sold any extra amount fetched
was sent back to the farmers
• Prices were offered well in advance before
the season started
• Prompt payment on cotton purchased from
the farmer
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1. AFTER LIBERALISATION
• Prices given to farmers are final and
conclusive
• Prices offered to farmers are after all buyers
/ ginners expenses have been deducted
from the prevailing world market prices
• Some buyer/ ginners do not pay promptly
• Buyers prices are not all actual some are due
to their poor efficiencies.
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2. OBSERVATIONS / RECOMMANDATIONS
• Price stabilisation fund should be established
say for three years so that the farmers price is
stable for a minimum of three years
• Lint bales to be sold to a single company in the
country so as to be sure of the prices obtained
from the sales
• Farmer prices should be looked at as per the
actual production cost per kilo of seed cotton
produced and not from the buyers costing point
of view
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2. OBSERVATIONS / RECOMMANDATIONS
(cont.)
• Farmers Association should be strengthened
so that they can sit with the buyers to
negotiate the selling / purchase price
• Capacity building of the farmers in both the
farming practise and the economics of the
production so as to realise the importance of
quality to their product. This is a vacuum
which the stakeholders have not taken it into
account with much concern.
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THANK YOU
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