Why lucrative export market remains elusive to smallholder producers

04Dec 2021
Daniel Semberya
Dar es Salaam
The Guardian
Why lucrative export market remains elusive to smallholder producers

​​​​​​​VARIOUS studies show that Tanzania’s agricultural export is way below its potential and the reason for this is traceable to meagre productivity of the dominant player—smallholder producers. 

Chairperson of the Rice Council of Tanzania (RCT) Julius Wambura makes a point during a recent breakfast debate on the plight of smallholder farmer organized by Policy Forum .Photo/ Daniel Semberya

The bottlenecks hindering smallholders emanate from prohibitive policies and regulations that stakeholders now want to be reviewed to ease marketing and trading. Both tariff and non-tariff barriers like taxes and levies are said to be culprits.

Also, there is a need to reduce bureaucratic procedures so as to make smallholder producers produce more competitively both for domestic and export markets. Public-private sector partnership should be encouraged to increase investments.

Speaking in Dar es Salaam recently during Policy Forum’s breakfast debate focusing on domestic and export markets entitles ‘What are the challenges facing smallholder producers (SHPs)?’, Executive Director, Agricultural Non State Actors’ Forum (ANSAF), Audax Rukonge said that smallholder producers are central to an inclusive development process and key for two pivotal reasons: as producers of food contributing to the national food security and income generation.

Smallholder producers include crop farmers, livestock keepers, beekeepers, hunters and gatherers, and fishers. They are all characterized by small production volumes of variable quality.

“Increasingly, SHPs are becoming surplus producers of the main food staples and there are increasing trends in the production of cash earning crops like horticulture,” he said.

 However, Rukonge said that although SHPs produce over 80 per cent of food consumed locally, their participation, particularly women and young people in local, national and global markets have been dismal mainly because they are not well organised for collective actions.

“Higher quality standards, higher value products, traceability and contracts are all becoming part of the game in domestic and international markets,” he said.

“Smallholder producers are not homogenous hence they face different sets of constraints to their participation in the markets.”

According to Rukonge, other challenges facing SHPs on meeting the external markets include unpredictability of policy decisions which sometimes change within a year.

He also listed limited knowledge and skills in good agricultural practices, small tradable volumes of low quality, crop and animal risks and market price volatility as additional bottlenecks.

Others include poor infrastructure, inadequate transportation facilities, and electricity supply as well as limited support services in research, extension, financial and insurance services.

Unstructured marketing systems, limited market information and ICT applications and dominance of intermediaries or middlemen also featured on the long list of challenges.

He said high tariffs and non-tariff barriers and prolonged bureaucratic procedures increase transaction costs and reduce SHPs incomes. Access to financial services and insurance namely lending portfolio production against process and retail market hence higher interest rates.

Chairperson of the Rice Council of Tanzania (RCT) Julius Wambura commended the government for bringing together the different groups of smallholder producers under the umbrella of the agricultural marketing co-operative societies (AMCOS).

Wambura said Tanzanian smallholder producers fail to meet the requirements of international markets because they are fragmented.

“Very structured markets need homogeneity and uniformity,” he said.

 He said that the private sector has a role to play by creating green handlers whose main role is to invest in silos to keep produce of smallholders to make it easy for exporters to get well stored crops for export.

“We really miss these green handlers in the market supply chain. Their presence will help to deliver the needed crops to the international markets on time,” he said.

Wambura urged the private sector to work closely with the government to promote oriented enterprises. These will assist to understand the environment and requirements of the external market trends.

He said that it was time Tanzania as a country branded its crops for export. If it is rice, for example, he suggested that one variety should be chosen and branded for export instead of mixing different varieties which fail ultimately fail in the international market.

“We can’t penetrate in the international markets because we produce what is not demanded out there,” he said.

He suggested that Tanzania can promote a rice variety known as SARO 5, or TXD306 which he said gives a lot of yields compared to other varieties. The variety is grown in Morogoro and the Southern Highlands regions of Iringa, Mbeya and Songwe.

“The external markets don’t require mixed varieties of rice; so, we need to have one variety as a brand from Tanzania for export. This can also be done with other crops,” he said.

Africa, including Tanzania, has a food deficit. According to data from the Coalition for Africa Rice Development of 2020, Africa imported rice worth USD 6.4 billion. So, with this data, the market for rice is huge, what is required is the brand and quality of that product.

 Recently, the National Assembly ratified the African Continental Free Trade Areas targeting the African population of about 1.3 billion people. Through this market, African countries will be able to accumulate around USD 3.4 trillion.

Marceline Kibena, a farmer from Morogoro Region urged the government to adhere to the Maputo Declaration which it ratified by allocating more funds to agriculture.

“And the parliament should ensure that the allocated funds are actually disbursed and reach targeted areas,” he said.

Maputo Declaration on Agriculture and Food Security was officially adopted by the African Union (AU) heads of state and government in the 2003 with two main targets: achieving a 6 per cent annual agricultural growth rate at the national level and allocating 10 per cent of national budgets to the agriculture sector.