Transcript Slide 1

FACILITATING EQUITABLE
AGRICULTURE DEVELOPMENT IN
SUB-SAHARAN AFRICA: A CASE
OF TANZANIA
By
The Economic and Social Research
Foundation (ESRF)
Content
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Introduction
Study Rationale
Objectives and Methodology
Agriculture ; Nature and Challenges
Stakeholders; Roles and interactions
Towards Equitable Terms of Trade among
Stakeholders
• Problems Facing Private Sector .
• Conclusion and Recommendations
Introduction
• Tanzania has been able to sustain economic
growth rate of not less than 6 percent.
• However the Poverty is reported to be almost
33 percent (HBS,2007).
• Public spending has been increasing over the
years with fiscal deficit peaking to almost 6.6
percent of the GDP.
• High inflationary pressure is yet another
problem.
Introduction
• External sector performance slightly
improved. Although the country still maintains
a trade deficit.
• Financial crisis affected the country.
• Economic rebound is expected (The Economic
Report on Africa,2010).
• More specifically, demand and prices of
exports are expected to increase, leading to
more export earnings.
Agriculture and Poverty in Tanzania
• Agricultural sector is the major employer
(ILFS, 2001/2002) and contributes to GDP.
• The sector is critical for poverty reduction.
• However there are vast potentials for
agricultural production.
Demand and Supply of food in year
2009
Rice
Wheat
3326200
4,115,581
-789,381
Cereals:
Sorghum
and Millet
926683
1535082
-608,399
867619
712390
155,229
95124
204018
-108,894
5218626
6567071
-1,348,445
Pulses
1116312
657926
458386
Bananas
1073149
733176
339973
Cassava
1972148
1830567
141581
Potatoes
1392443
781106
611337
Sub-Total
5554053
4002774
1551279
Total (Cereals and Non-Cereals):
Production
5218626
Requirement
6567071
Gap(-) Surplus (+)
-1348445
5554053
4002774
1551279
Maize
Production
Requirement
Gap(-) Surplus (+)
Sub-Total
Non-Cereals:
Production
Requirement
Gap(-) Surplus (+)
10772679
10569845
202834
Agriculture and Poverty
• The World Bank Report (2008) on agriculture
states that in the 21st century, agriculture shall
continue to be a fundamental instrumental for
sustainable development and poverty
reduction.
• Slow growth rate = slow pace in poverty
reduction.
Poverty status
Main Policy Framework
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Agricultural Policy
( Lead to ASDS, then ASDP).
Kilimo Kwanza was established.
Trade Policy ( Passed through 3 phases). The
policy endeavours to integrate Tanzania into a
global economy through trade.
• Investment policy attempts to encourage
investors in the agricultural sector.
• There is no contradictions between the
policies.
Agricultural Policy
• The policy has spelled out main objectives to
be realized are;
• Food security, nutrition, improving standard
of living in rural areas and increasing foreign
earnings.
• Supplying raw materials for industrial outputs,
and developing technologies for land and
labour productivity.
• Developing human resources and support
services for enhancing agriculture.
Study Rationale
• Transformation of agricultural sector is critical for
poverty alleviation in Tanzania.
• Pre –requisites include, improved production
and productivity to develop infrastructure and
trade facilitation measures, and finally, to create
enabling environment for health and productive
interaction between farmers, traders and
investors.
• However there has been less emphasis on the
third condition.
Main Objectives
• To examine the relationships existing between the agriculture policy
makers, farmers, investors and traders in the country as well as
their role/contribution to the policy formulation and
implementation;
• To identify both the positive and negative elements in the relevant
policy framework that either facilitate or hamper positive
interaction and equitable terms of trade among farmers, investors
and traders;
• To encourage and promote dialogue among farmers, investors,
traders and policy makers through inclusive research methodology;
and,
• To generate a set of practical recommendations directed at all
relevant stakeholders which will be the basis for advocacy for
farmer-friendly and private sector-led agricultural development in
the country
Specific Objectives
• To review policy framework related to agriculture in the country
(e.g. policies and strategies related to agriculture, investment, trade
and development) and its implications on the farmers, investors and
traders;
• To examine the role of and constraints faced by famers, investors
and traders in agriculture development in the context of existing
policy framework;
• To establish linkages and relationship among stakeholders in the
agricultural sector with focus on identifying both the positive and
negative elements and instances of interaction and terms of trade
among farmers, investors and traders; and,
• To identify and to articulate clearly all elements of an enabling
environment for farmer-friendly and private sector-led agricultural
development
Specific Objectives
• To review policy framework related to agriculture in the country
(e.g. policies and strategies related to agriculture, investment, trade
and development) and its implications on the farmers, investors and
traders;
• To examine the role of and constraints faced by famers, investors
and traders in agriculture development in the context of existing
policy framework;
• To establish linkages and relationship among stakeholders in the
agricultural sector with focus on identifying both the positive and
negative elements and instances of interaction and terms of trade
among farmers, investors and traders; and,
• To identify and to articulate clearly all elements of an enabling
environment for farmer-friendly and private sector-led agricultural
development
Methodology
• Primary information was collected using an
interview guide.
• The interview guide focused on establishing
constraints.
• Role of different associations formed by different
actors was also established .
• Secondary information was gathered from
institutions such as The Ministry of Agriculture,
Food Security and Cooperative, Economic and
Social Research Foundation Library, the National
Website, etc.
Agriculture ; Nature and Challenges
• The sector is composed of mainly smallholder
farms, medium and few large scale farmers.
• Each category play its own functions.
• Policies recognize needs of each category.
• They require land allocation, tax exemption on
imported capital goods, transport infrastructure
development, human resource with required
skills, etc.;
Agriculture ; Nature and Challenges
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Challenges facing the sector include;
Supply constraints.
Conflict between actors.
Low development in value addition.
Contract farming or out grower scheme.
Inefficient marketing systems.
Stakeholders: Their Roles and
Interaction
• Stakeholders include; farmers, private traders
invested in farm production, processing and
distribution.
• institutions such as those which provide
financial services, agricultural inputs,
• Non-Governmental Organizations (NGOs)
• Government ( They undertake different roles).
Stakeholders: Their Roles and
Interaction
• Private traders can be classified as small,
medium and large scale operators.
• Each category face different challenges and
represented by different associations.
• Vertical or horizontal integration among the
private players is still weak.
• Ad hoc policy is a problem.
Stakeholders: Their Roles and
Interaction
• Ministry of Agriculture, Food Security and
Cooperative (Government).
• Warehouse Receipt Agency.
• Crop Marketing Boards.
• Agricultural Research Institutes (ARI)
• Local Government Authority
• Agencies In-charge of Standards
• Farmers and their Organizations
• Private Sector
Towards Equitable Terms of Trade
among Stakeholders .
• Constraints impede efficient and effective
interaction between stakeholders within the
agricultural sector.
• Most of these constraints are either related to
poor
policy
implementation,
policy
inadequacy and/or policy failure.
• Affects entire crop subsector.
Towards Equitable Terms of Trade
among Stakeholders
• Factors affecting equitable terms of trade are;
• Inefficient Marketing System.
• Inaccessibility to Financial Services and agricinputs .
• Weather condition.
• Poor Extension Services.
• Ad hoc policy.
• Tax or crop levy.
Problems Facing Private Sector
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Lack of Steady Supply of Crop Produce
Problem of Electricity.
Transaction Costs.
Poor infrastructure in rural areas.
Low production given the use of rudimentary
technologies.
• Ad hoc policy.
Expectations of Farmers and
Private Sector
• Smallholder farmers need subsidy and
efficient marketing system.
• Lack of conflict between farmers.
• Private sector expects the Government to
implement business policies including
identifying solution to problem of electricity.
Conclusion
• The sector is dominated by small farmers and
there are few medium and large scale
farmers.
• They differ in terms of assets and resources
endowments.
• Their production activities are affected by
similar factors such as lack of access to credit,
market information, agricultural inputs,
storage facilities and insufficient supportive
services.
Conclusion
• Farmers use different mechanisms to
influence policies .
• Large scale farmers use their association or
even individual firm to lobby for a particular
policy change.
• NGOs or CBOs represent smallholders in policy
review or lobbying and advocacy for policy
change.
Recommendations
• The Government should increase resources
allocation in order to build up infrastructure.
• This will entice more actors to invest and
increase level of competition.
• Public institutions need to be strengthened in
order to pick up existing and even future
challenges.
Recommendations
• Warehouse receipt system should be scaled
up and introduced to other crops subsectors
as well. This is an area where the Government
should collaborate with the Civil Society
Organizations (CSOs).
• Contract farming, which will include provision
of agricultural inputs and even extension
services, may help to reduce transaction costs
of dealing with the smallholder farmers.
Recommendation
• CSOs should collaborate with the Government
in undertaking a national sensitization
campaign to smallholder farmers so that they
can understand and consider large scale
farmers as partners rather than just land
grabbers.
• Development partners, should avail more
financial aid to the sector either through
basket funding or even project financing.
End
Asante Sana