Despite facing numerous challenges such as modern inputs, extension officers and inadequate mechanization, the sector continues to one of the largest and most important in the country’s economy. The government has always invited the private sector to invest in agriculture so as to speed up growth through support to smallholder farmers who constitute the bulk of the sector.
While addressing parliament in Dodoma during budget session last year, the then Deputy Minister for Agriculture, Hussein Bashe said the government of President Samia Suluhu Hassan fully supports contract farming that assures smallholder farmers of a reliable market for their commodities.
“With contract farming, farmers can enjoy a ready market with reliable prices but also get access to vital agro-inputs from manufacturers or companies,” Bashe who is currently Minister for Agriculture said.
The Deputy Minister further told lawmakers that the government fully backs contract farming because it will eventually help smallholder farmers graduate into large scale commercial farmers. “The government is collaborating with the private sector to encourage farmers work with manufacturers through contract farming,” he noted.
Bashe’s observation aligns well with Serengeti Breweries Limited which has been working with over 400 cereal farmers countrywide through contract farming. SBL which manufactures a variety of alcoholic beverages, has been supporting the cereal cultivating smallholder farmers located in eight regions of the country get hybrid seeds, extension services but also access credit from financial institutions to improve their farming methods.
“Practically, Minister Bashe was actually saying what we have already been doing with farmers for many years now through contract farming,” said SBL’s Corporate Affairs Director, John Wanyancha who added that the farmers from Arusha, Dodoma, Manyara, Mara, Mwanza, Singida and Shinyanga sell their cereals to the brewer for the manufacturing of alcoholic drinks.
Wanyancha explained that SBL through its agribusiness programme has entered into win win contractual agreements with the farmers to supply barley, maize and sorghum to the brewer which pays them premium prices.
“SBL also provides the farmers with inputs such as free quality seeds, fertilizer and technical advice to ensure that quality and standards are adhered to. But we also link them to financial institutions to access credit and in return purchase their commodities at premium market prices,” he added.
According to Wanyancha, the brewer's agri-business programme has turned around the lives of hundreds of the smallholder farmers and their families as they earn more from the company. “In 2020 alone, SBL sourced 17,000 metric tons of these grains locally, equivalent to 70 per cent of our annual total raw materials requirement and we are poised to increase the amount of raw materials from local farmers to 85 percent by 2025,” the SBL Corporate Director added. He pointed out that SBL which has modernised and expanded its factories in Dar es Salaam, Mwanza and Moshi cities is also increasing capacity of alcoholic beverages.
Thus through its agribusiness programme, SBL is investing substantially in farming communities by supporting the whole value chain including training of students from struggling families to become extension officers who will help their parents improve their farming models.
“Our ‘Kilimo-Viwanda’ Scholarship Programme targets children from farming communities we have contracted to produce raw materials for beer manufacturing,” Wanyancha noted saying the students study for diplomas at four agro-training institutions located in various parts of the country.
“SBL’s agribusiness programme complements government’s relentless efforts to ensure that farmers have a reliable market but also get access to modern agro-inputs and extension services,” the SBL Corporate Affairs chief stated.
In general, the beauty of contract farming is that it sustainably creates a win-win situation for smallholder farming communities which are struggling to undo several challenges including reliable markets.