Tanzania: Agriculture Budget Signals Sector’s Future On the Right Trail
By Dr Hilderbrand Shayo
IN the 2022/23 fiscal year’s budget, giving his Ministry budget, Hon Hussein Mohamed Bashes’ determination to set Tanzanian farming on right track clearly promoted my thoughts on several issues that I would think if executed will make a dream come true.
After listening to Hon Bashe speech, with very few exclusions, African government policies regarding agriculture over recent years have ranged from half-hearted to unfavourable, despite immense prospects to grow the sector through productivity-enhancing approaches and technologies.
Tanzania, for example, concerning subsidy on fertiliser as presented in the parliament sincerely spends relatively very little on agricultural development compared to Zambia (30%), Malawi (44%), and Rwanda (11.7%) and changing this political dynamic is now, if truly, Tanzania desire to see the contribution of the sector to the economy.
This is my analysis, subsidy if granted must go hand in hand with the government to partner with the private sector to fix market failures along important value chains for some promising agriculture commodities with a commercialisation outlook aimed at making agriculture a business like any other business.
Notwithstanding, countries like Tanzania can sustain or even increase their past economic growth rates will come down to government effectiveness in finding solutions to the bottlenecks in key segments of the agricultural sectors.
This will need the government’s willingness to engage more widely with the private sector, and the development of innovative institutional arrangements for moving the agenda forward to see the agriculture sector as a strategic sector in Tanzanians’ future growth.
Through this, agricultural growth will assist to leverage rapid growth in the larger agrifood system and agro-business crops including agro-processing and trading. If I seized well Hon. Bashes’ speech, there are various options that can raise farm productivity and boost growth in the country.
Nations that have developed successfully have invested in agriculture and then indirectly shifted resources from agriculture to manufacturing. For example, the known green revolution furthered most regions of the world, especially East Asia where cereal yields quadrupled between 1960 and 1990.
Only Africa missed out on this and the prolonged lack of progress in instituting measures that could boost agricultural productivity has been condemned for holding back the region’s overall economic growth. That being said, there are various aspects that do believe can help to transform and revolutionise Tanzania’s agriculture while at the same time enhancing to improve its competitiveness.
In addition, to provide subsidies to inputs i.e., fertiliser and seeds as in the case of Zambia, there is a need to work towards developing highyield crops. This will involve increased research into plant breeding, which considers the unique soil types.
According to the CGIAR consortium of agricultural research centres report, unquestionably have stated that a dollar invested in such research is estimated to yield six dollars in benefits, an output I reckon will boost the yield of farmers.
Of course, with the growing effects of climate change on weather patterns, more irrigation infrastructure will be required. Studies and research have indicated that average yields in irrigated farms are 90per cent higher than those of nearby rain-fed farms.
Categorically with Hon. Bashes’ viewpoint, improved market access, regulations, understanding of what standard and quality market needs and understanding of logistic governance will be needed to foil government plans.
Enhancing rural infrastructure such as roads is critical to raising productivity through reductions in merchandising costs and the loss, especially of perishable produce to access markets.
Many don’t realise but it has been proven through studies that providing better incentives to farmers, including reductions in seeds subsidies, could raise agricultural output by nearly 5.0 per cent or more.
In addition, to what Hon. Bashe is proposing, that the disposition of digital solutions in the last mile of agricultural value chains permits agribusinesses to address an extensive range of business challenges and at the same time surge farmer loyalty, operational efficiency, and realtime visibility in the last mile.
In my view, digitisation of value chains will benefit farmers too, by for instance encouraging financial inclusion, enabling transparent transactions, and reducing travel times and transaction costs related to the deployment of near home-grown farms’ cash-out points.
Simply giving farmers information about crop prices in different markets can strongly increase their bargaining power which according to studies can boost incomes by 10-30 per cent. It has been well-known in the literature that generally in Africa and especially in sub-Sahara region countries including Tanzania have the uppermost area of arable uncultivated land in the world nearly 202 million hectares, still, most farms occupy less than 2 hectares.
When you try to do a deep dive into why the case is, you will discover that such a situation is caused by two main aspects, poor land governance and ownership.
Land reform isn’t an easy exercise to undertake given customary and traditional existing ties prevailing in many nations in Africa. But it is my conviction that rational changes that undoubtedly and visibly explain property rights, ensure the security of land tenure, and infrastructure that would enable land to be used as collateral will be needed if many African nations and, in this case,
Tanzania is to realise potential productivity gains. In addition to these two aspects investing in technology is also important. To build a workable digital ecosystem in the agricultural value chains, that would more benefit farmers it is critical that all investors share the benefits of mounting digitisation, including agribusinesses, which are increasingly recognising the opportunities for digitisation of payments and other processes.
In the past, it is well known, that when paying farmers, agribusinesses in Tanzania faced challenges related to cash handling. For example, in the softwood value chain purchaser often carried large sums of cash to pay their smallholder timber suppliers. Those coming from Iringa will agree with me on this.
Digitising payments to such farmers and many others in crops such as avocado, tomatoes, onion and the like not only supports operational efficiencies by reducing the cost of cash but also allows agribusinesses to make more transparent transactions and reduces their reputational risk.
As the government’s determination to transform the agriculture sector its support is crucial to coordinate the integration of smallholder farmers into larger cooperatives and groups needed in other areas that aid integration with wider markets. This will not only increase income for farmers but set the ground for a sound transformation of the sector in the country.