by Taryn Springhall

Farming in Tanzania

Tanzania takes aggressive stance in securing food for its people

The Tanzanian government has taken drastic measures to provide food for the country
tanzania.jpg

Talking about Tanzania’s economy is talking about an agricultural economy, said Tanzania’s Minister of Agriculture, Food Security and Co-operation, Stephen Wasira, when asked to determine how important farming and agriculture is to the country.

With more than 80% of the labour force in the farming sector, however, it goes without saying that agriculture is the root of the country’s economic activity.

Despite the fact that agriculture accounts for 25% of the gross domestic product and more than 85% of exports, climate change (particularly drought) and mountainous terrain limit crop cultivation to just 4% of the land area. Coupled with the country’s recession due to a spike in oil prices in the 1980s and a lack of investment in the agricultural sector in the 1990s, high levels of food shortages are a reality in Tanzania today.

The Tanzanian government has taken an aggressive, proactive approach to stimulate the sector’s growth, including the adoption of macro-economic policies to encourage investment in both small- and large-scale commercial farming.

Various activities make up the overall strategy and include: the creation of an ‘enabling environment’ and offering support to private operators, farmers organisations, non-governmental organisations and community-based organisations that supply inputs and extend credit to small-scale farmers in part to ensure a strong regulatory mechanism.

The government has increased budgetary allocations in agricultural research, provided special support to investments in agricultural processing (particularly in fruits and vegetables) and, lastly, made the implementation of the new Land Act top priority.

The Agricultural Sector Development Programme (ASDP) is an investment programme under which a number of these activities fall, and is guided by two complementary objectives: to allow farmers better access to and use of agricultural knowledge, technologies, marketing systems and infrastructure to boost productivity, profitability and farm income; and to promote private investment in agriculture within an improved regulatory and policy environment.

The first component of the ASDP includes the ‘local level support’ to improve agricultural service delivery; the quality of agricultural investments; and the local policy and regulatory environment for private investment in agriculture.

The second component is ‘national level support’, designed to improve the responsiveness and quality of agricultural research and policy; to carry out preparatory work and investment in a national irrigation system through public-private partnerships; to improve food security and sector co-ordination, and to stimulate agricultural markets and private sector development.

The government, under the ASDP initiative, has responded to the problem by offering support to communities in setting up small irrigation systems and projects, as well as offering an opportunity for the transfer of skills and knowledge about modern agricultural practices.

Due to the cost of fertiliser on the world market, most local farmers cannot afford the market price. The input from the government allows farmers to purchase fertiliser for up to 50% less than the market price, therefore allowing them to produce more.

Perhaps one of the most exciting agricultural investment programmes on the African continent is the Southern Agricultural Growth Corridor of Tanzanian (SAGCOT) programme, which was initiated at the World Economic Forum Africa Summit in 2010.

It is described as an “inclusive, multi-stakeholder partnership to rapidly develop the region’s agricultural potential”, with the aim of linking farmers to modern supply chains, reducing rural poverty and food shortages and making agriculture a profitable activity in a country that relies so heavily on the sector.

Success of the SACGOT project could mean enough food for the East African region and elevate Tanzania to become a major agricultural exporter and rival the likes of Brazil.

It is estimated that about R29.5-billion of investment from the public and private sector will triple Tanzania’s agricultural output over 20 years and allow the country to achieve sustainable food security, create 420 000 jobs and elevate more than two million people out of poverty.

A Catalytic Fund worth $50 million (about R435 million) also forms part of SACGOT and will provide low-interest capital for start-ups operating in the agricultural industry.

In November 2012, the Tanzania Investment Centre launched the country’s first agribusiness investment showcase to bring together the government and the private sector to demonstrate and accelerate investment opportunities available within the SAGCOT.

The event proved to be successful, not only in highlighting Tanzania’s enormous potential for investment with 44 million hectares of arable land and livestock and fishery development, but in actually attracting 70 potential foreign investors and over 40 private companies wanting to take advantage of opportunities within SAGCOT.

Fortunately, South Africa and Tanzania have a strong economic relationship – with South Africa being the third largest exporter to Tanzania with a market share of 9.63%.

The trade balance between the two countries shows South Africa’s exports (comprising machinery, vehicles, iron, steel and technology) were worth R3.5-billion and R3.1-billion in 2009 and 2010 respectively.

Imports from Tanzania (mainly gold, coffee, cashew nuts and cotton) grew by almost 100% from R236 million in 2009 to R464 million in 2010. While the relationship continues to grow and prosper, South Africa can still learn an enormous amount from development activities taking place in Tanzania.

The Tanzanian government’s approach to aggressively attract investors and strategically farm out the country’s agricultural potential has been a success. Continued commitment from all parties, particularly the government, has forged a new path for growth and demonstrated a strategy that can be used throughout Africa.

 

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