​​​​​​​Agro-bank intervention to increase productivity in pyrethrum

15May 2020
By Guardian Reporter
The Guardian
​​​​​​​Agro-bank intervention to increase productivity in pyrethrum

TANZANIA has a potential of being the world largest producer of pyrethrum in the next few years, thanks to the strategic intervention the Tanzania Agricultural Development Bank (TADB) is taking to revive the subsector.

AMCOS board members, TADB, Pyrethrum Company Tanzania and Lutheran World Relief officials in a group photo soon after inspecting pyrethrum nursery in Mufindi District.

According to the Food and Agriculture Organization (FAO), Africa produces 86.8 per cent of all pyrethrum in the world market.

During 2018, Tanzania produced about 3,261.6 tonnes, making the country the second-largest producer behind Kenya. Pyrethrum is a natural insecticide of a plant origin; it is predominately used to create insecticide products for households, animal and the general public use—mosquitoes, flies and lice control and in agriculture as a pesticide.

Mufindi District is one of the area which are popular for growing pyrethrum in southern highlands regions.

The TADB extended a loan facility to three Agricultural Marketing Cooperative Societies (AMCOS)—IKOITU, IPOIG and Chachawakam in Mufindi.

The loan facility aims to boost the AMCOS working capital and increase pyrethrum production and productivity for the 2019/2020 season. The intervention includes collaborating with other stakeholders to provide farming insurance services, training and extension services, as well as link the out-growers with the consumer market. 

Simon Kabonge, the chairperson of Chachawakam, shared his excitement and enthusiasm sighting that, “TADB financing pyrethrum-farming activities is intending to increase productivity to 520 acres from currently production ranging between 200 Kilograms per acres to 500 kilograms per acres for the coming harvest season.”

 This growth is equal to 150 per cent increase in production.

He said: “The loan has touched the lives of 315 members directly in Mufindi districts of Ikogozi, Ihanu and Mdabulo ward which will results in job creation, improving their living standard and reducing the number of dependants in their families.”

This intervention is one of TADB's efforts to transform the agricultural sector towards Tanzania's green revolution as part of the country's industrialization drive to achieve Vision 2025.

When contacted Managing Director of TADB, Japhet Justine said that the bank’s strategic direction is to assist in strengthening value chains where they exist and help stakeholders build them where they do not exist.

He said that the agro-bank has collaborated with the Iringa local government authority, the Private Agriculture Sector Support (PASS), National Insurance Company (NIC), Lutheran World Relief (LWR), and the Pyrethrum Company Tanzania (PCT) as essential stakeholders in pyrethrum ecosystem.

The collaboration expects to increase the pyrethrum production to meet the demand on one end, and assure a stable and reliable market to farmers on the other.  The twin strategy is geared to attract contract farming to guarantee the 315 out-growers a stable and reliable market through the Pyrethrum Company Tanzania (PCT). 

While commenting on TADB intervention, John Power, the Chief Operation Officer of PCT said: “This initiative will increase pyrethrum productivity, which, will result to a reliable flow of raw materials for the company's processing plant located in Iringa.”

He further expressed that, at present, the plant is currently working under capacity and often forced to buy raw materials from other regions.

In transforming the pyrethrum value chain, the TADB Managing Director explained that roles would be distributed according to each partners' competence to ensure efficiency in production, in the supply of capital, and risk mitigation. 

According to him, the company in collaboration with Lutheran World Relief (LWR) will provide capacity building to the AMCOS and offer extension services to farmers for quality assurance of their produce. 

The partnership between TADB and PASS will focus on de-risking the value chain by enabling the smallholder farmers to overcome the barrier to capital through credit guarantee covers. At the same time, the National Insurance Company will provide insured farmers with protection against loss of harvest in the event of excess rainfall.

The office of the District Commissioner (DC) for Mufindi assured TADB with the needed support to oversee the three AMCOS by performing a regular assessment of the farms' condition, by circulating monthly reports regarding pyrethrum harvesting, and by taking immediate action whenever there is an irregularity in production – this includes assuring AMCOS pay their loans as per the signed agreement. In addition, the office of DC has advised farmers to be committed to increasing productivity while seizing the opportunity provided by the direct market that is available in the region through the PCT.