Kilimo Kwanza

Tuesday 18 May, 2010 kilimokwanza@guardian.co.tz

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The resources of River Nile are for all countries not for some or a few countries

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Asfaw Dingamo Ethiopian Minister for Water Resources

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Our current water rights are a red line

Ahmed Abul Gheit Egyptian Foreign Minister

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Tuesday 18 May, 2010

The Guardian KILIMO KWANZA

Tuesday 18 May, 2010

POLICY

EDITORIAL

2,000,000 farmers benefit from ‘voucher’ input subsidy

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2,000,000 farmers benefit from ‘voucher’ input subsidy The system has improved output in food surplus areas where it was introduced to for that purpose.The president said two million farmers were currently benefiting from the system which was initially aimed at food crops.

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Challenges facing Nile Basin Initiative

No need to fear agreement over use of Nile water

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elegations from seven of the nine Nile Basin Initiative (NBI) member countries met in Entebbe over the weekend and ratified a pact to provide for a new arrangement of sharing the River Nile waters. But this was done in the absence of Egypt and Sudan, who boycotted the meeting.

The Nile ‘Cooperative Framework Agreement’ (CFA), seeks to establish a permanent Nile River Basin commission which will set clear procedures of water sharing thereby replacing the two colonial-era pacts which are in favour of Sudan and Egypt but are deemed unfair by the seven countries. The seven are Ethiopia, Kenya, Uganda, Tanzania, Democratic Republic of Congo, Rwanda and Burundi.

A 1929 pact between Egypt and Britain gives Egypt veto power over upstream projects as well as access to most of the Nile waters. Further still, a 1959 pact between Egypt and Sudan, allowed the two countries 55.5 and 18.5 billion cubic metres of water, respectively, every year.

But the seven countries that were represented at Entebbe maintain that these past treaties are unfair and they want a reasonable watersharing pact that allows for more irrigation and power projects.

Although the talks have dragged on for over ten years, and many points have already been agreed upon, the seven countries now find a new agreement over the use of the Nile water inevitable because of the climate change phenomenon. Rainfall in no longer predictable and they need to develop irrigation systems to continue growing food to feed their people.

The situation is critical for Ethiopia but all the other members need to develop irrigation as well, though they have other sources other than from the Nile catchment. It would for instance alarm a Tanzanian farmer to learn that the existing agreements, signed between Britain and Egypt, do not allow him to use Lave Victoria water for irrigation without permission from Egypt.

The action would be treated as aggression by Egypt.

On the other hand, Egypt and Sudan maintain that for them the river Nile is the source of life, as most of their agriculture depends on it.

Sudan argues that that the seven countries have got sufficient rainfall and should not clamour for Nile waters which are crucial for life in Sudan and Egypt. As for Egypt, they say they do not intend to discuss any pact that involves a review of their share of the Nile water. Minutes after the signing of the Entebbe agreement, Egypt stated unequivocally that it is not bound by anything the other NBI members had passed.

Egypt and Sudan are very sensitive about intentions by upstream countries carrying out projects on the Nile that may affect their ‘share’ of the world’s longest river’s water. But now the other seven say they need to start using the water for farming purposes. Ethiopia, which contributes 85 percent of the Nile waters and is not allowed to use any for irrigation, has in the past stated that it will no longer bow to “intimidation” by Egypt and Sudan. Kenya has warned that without a new agreement, there will be no peace.

But collective or individual saber rattling by any of the nine countries will not bring about peace. And without peace there can be no development. NBI members therefore need to woo Egypt and Sudan back to the table so that they become party to the new agreement. In reality, Egypt and Sudan cannot stop the other members from using the water, short of using force. Which may not succeed.

It is better therefore that negotiations are given another chance. Egypt and Sudan need to know that the other members are not out to destroy them, understand the need for interdependence and are not intending to deny them water. What they seek is a mutually agreed framework for utilizing the internationally owned resource, the great River Nile. The NBI meet again in Ethiopia in a month or so. Every member should attend. Solutions shall be found through discussion and negiotiation, not by splitting.

Wallace Mauggo Editor

Lack of cash prevents Ethiopia from exploiting the Nile waters and the prime minister accused Egypt's opposing any international funding of large scale irrigation projects on the Nile.

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TFA vows to take farming inputs to the whole country TFA’s main preoccupation now is to increase accessibility of agriculture inputs all over the country for farmers. For many of the farmers in the rural areas, commercial farming is simply not feasible because of difficulties traveling long distance to buy agriculture inputs

Kilimo Kwanza Founder Tanzania President Jakaya Kikwete with World Economic Forum Founder, Klaus Schwab during the Dar es Salaam meeting.

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Positive, lasting change must first reach the bottom of the pyramid

The Guardian and Nipashe Kilimo Kwanza are committed to supporting all the promoters and stakeholders of Tanzania’s Green Revolution.

At present the matter is no longer being debated, as to whether the poorest sections of society constitute a market or they aren’t, and additionally, it isn’t just a few corporate entities who think of this market

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To have your organisation promoted in Kilimo Kwanza, Call: 0787 571308, 0655 571308 0754 571308

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By Jaston Binala he voucher system in which farmers buy fertilizer at cheap, subsidized prices, is proving successful in improving agricultural output in Tanzania, President Jakaya Kikwete told the World Economic Forum that sat in Dar es Salaam recently.

The system has improved output in food surplus areas where it was introduced to for that purpose. The president said two million farmers were currently benefiting from the system which was initially aimed at food crops.

It has been so successful, Tanzania was now considering to introduce the system in cash crops as well, the President said.

President Kikwete also gave credit to the private sector for Tanzania’s current green revolution initiative of Kilimo Kwanza, which is now a government commitment to give agriculture first priority in all it is doing at present. He said Kilimo Kwanza originates from ideas mooted by the private sector through the national business council (TNBC) a think tank which brings together the government and private sector. The president chairs the council.

The voucher system has been so successful, the president said, that if resources were available more farmers would get the subsidies. The president made the remarks while discussing during a session on a new vision for Africa’s agriculture. Agriculture is a key component of African economies, providing up to 70% of employment for countries like Tanzania, but climate change may reduce production by up to 25% in the coming years, threatening food security and potential economic gains. Forum organizers set the discussion topic at the plenary session to identify how stakeholders can work together effectively to drive sustainable growth in the agriculture sectors on the continent and capture the region’s considerable agricultural potential.

President Kikwete said the voucher system was copied from Malawi, which he had heard had performed a miracle in agricultural output. Other contributors sitting at the high table as main panelists included Ethiopian Prime Minister Meles Zenawi, Dr. Kanayo Nwanze, President of the Rome-based International Fund for Agricultural Development (IFAD), and an expert on agriculture from Malawi, Dyborn Charlie Chibonga, Chief Executive Officer of the Smallholder Farmers’ Association of Malawi (NASFAM).

Dr. Nwanze told the meeting Africa must invest in the rural areas because that is where food is grown if food shortages are to be wiped out. Smallholder farmers should be turned into agricultural entrepreneurs, he said.

The general consensus on how to improve agriculture on the continent was that African needs a revolution in small holder farming, who currently badly need access to funding as well as access to market information which would enable them to make sensible business decisions affecting their farming and farm produce.

To the persistent but key question of what is holding Africa back President Kikwete identified six problems hindering agricultural progress in Africa, namely: Dependence on rain water; lack of good disease resistance seeds; the lack of sufficient fertilizers and the lack of pesticides. He also identified the lack of skilled farmers and a poor marketing system which lacks incentives to the farming communities.

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Tuesday 18 May, 2010

COVER STORY

COVER STORY

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Row over the Nile: A matter of life and death?

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t was not just another meeting of delegates from several African countries, there are already many of them. Last week’s meeting of several members of the Nile Basin Initiative in the lakeside town of Entebbe in Uganda was different and could have far reaching effects on the lives of 160 million people.

The first worrying thing about the Entebbe meeting is that one of the two parties did not attend. The party that attended went ahead and signed an important agreement. The party that did not attend rejected it promptly.

Although all nine members of the initiative, which has been working since 1997 with the active support of the World Bank, are supposed to be one group, the reality is that in matters of using the waters of the river Nile, there are two sides: the upstream countries and those downstream.

The so-called downstream are the two main users, Sudan and Egypt. Sudan however maintains that it is midstream, or belongs to the two.

Actually, the final convergence of all the tributaries of the Nile takes place at Khartoum. And Sudan in fact has several tributaries that feed into the Nile.

The so-called upstream comprises the other countries starting with Tanzania, which has the farthest point south of the waters that feed the Nile, Burundi, Rwanda, Democratic Republic of Congo, Uganda, Kenya and Ethiopia, which contributes 85 percent of the water. The upstream countries meeting in Entebbe decided to pass a new agreement on using the Nile waters to replace the old agreements signed by Egypt and Sudan with Britain before the upstream countries became independent.

Egypt and Sudan stayed away from the meeting and the governments in Khartoum and Cairo promptly denounced the new agreement after its signing in Entebbe.

Tanzania, Uganda, Ethiopia and Rwanda were the first to sign the new Cooperative Framework Agreement (CFA) and the other upstream countries were expected to sign soon. Their signing was delayed mainly because the appropriate personalities from their governments were not physically present in Entebbe. The CFA document has been left open for one year – until May 13, 2011, to particularly “give Sudan and Egypt a chance to change their mind and sign”. Uganda’s Minister of State for Regional Affairs, Mr Isaac Musumba, who signed on behalf of Uganda urged the other countries to follow suit to “pave way for development projects on the Nile”.

“I urge the rest of the countries to append their signatures when this document is open,” Mr Musumba said. Kenya’s High Commissioner to Uganda, Maj Gen Geoffrey Okanga said that Kenya’s position on the CFA has not changed and it will sign

the treaty as soon as possible. “We think we have reached a stage where we should move forward in ensuring the proper use of our water resource,” he said.

The Nile CFA seeks to establish a permanent Nile River Basin commission that will set clear procedures of water sharing thereby replacing the two widely disputed colonial-era pacts deemed unfair by seven countries, including Rwanda.

A 1929 pact between Egypt and Britain gives Egypt veto power over upstream projects as well as access to most of the Nile waters. Further, a 1959 pact between Egypt and Sudan, allowed the two countries 55.5 and 18.5 billion cubic metres of water, respectively, every year.

The upstream states say they signed the pact as this was agreed in a recent meeting in the Sinai resort of Sharm El Sheik, Egypt. Egypt wants to keep its 55.5 billion cubic meters share of the river and also to keep veto power over any new irrigation projects undertaken by the other states.

The Nile Basin covers an area of about 3.1 million sq kms – about 10 percent of the African continent, and about 160 million people live within the watershed boundaries of the Nile Basin where the dominant economic sector is agriculture.

Sudan reacted to the Entebbe agreement by saying the upstream countries have a lot a rein while upstream all they have are the Nile waters. Egypt in reaction

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All nine countries were close to an agreement, and so there was no need for the upstream countries to sign their own deal, they have a lot of rain, this is nature

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By The Guardian Reporters

simply said for them the Nile water is a matter of national security. And Kenya said without a new co-operative framework, there indeed will be no peace. "Where there is no rule of law, the rule of the jungle does not provide peace." A Kenyan official, John Nyaro was quoted by the BBC as saying The BBC also quoted Rwanda's Environment Minister Stanislas Kamanzi thus: "Egypt has been requesting to defer the signing of the Cooperative Framework Agreement - we couldn't wait any longer, since we have been negotiating for over 10 years."

The legal counsel of the Sudanese delegation Ahmed el-Mufti, was quoted by Reuters saying that all nine countries were close to an agreement, and so there was no need for the upstream countries to sign their own deal. "They have a lot of rain: This is nature," he said.

"They do not need the water. Here in Sudan we need water." The Egyptians did not mince their words. Foreign Minister Ahmed Abul Gheit issued a stern warning that water rights were a "red line". He threatened legal action against the new deal is reached, the AFP news agency reports.

Speaking to The Guardian in Dar es Salaam later on the weekend, Sudanese Ambassador to Tanzania AbdelBagi H. Kabeir was more conciliatory, saying the decade-long talks have so far yielded agreement on 97 percent of the issues and is optimistic that the remaining 3 percent shall also be resolved by negotiation. But he maintains the Entebbe meeting was not supposed to have taken place in the first place.

The ambassador also said Egypt and Sudan cannot stop projects if upstream countries decide to set them up against the existing agreements. “They have built a huge dam in Ethiopia, possibly higher than Aswan, and they did not get consent to do it,” he said. “Sudan is of the view that we have no option but to cooperate.”

Slamming the Entebbe meeting further, Kabeir said, “Any sort of grouping within the NBI is not for the good of anybody. The Nile is for all of us and we should be emphasizing needs rather than rights of the various users.

The ambassador advised the ‘upstream’ countries to concentrate on the billions of litres of rainwater that they allow to flow away, evaporate or sink into the ground and use it better to develop their agriculture. He readily added that Sudan and Egypt are more than willing to help the countries develop their capacity to manage all this water better.

He also lamented the introduction of politics in issues of the Nile which in his view should remain technical. “If we allow for splits to develop, we shall obviously be weakened while divided, and even worse, conflict shall arise. And some forces outside the Nile Basin shall celebrate. In fact they are already celebrating the Entebbe deal because it shows disagreement amongst Africans.”

Challenges facing Nile Basin Initiative

Blue Nile Falls in Ethiopia

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lthough one of the most developed countries on the continent, Egypt faces a precarious future as its population growth is expected to outstrip its capacity to grow enough food to feed its people by the year 2017, according to Cairo’s own official projection. Its agriculture is well developed but depends heavily on the water of River Nile, as it has done since the beginning of civilization.

Now a decision by upstream countries to take charge of the decision over who uses how much of the rivers water and when under a new agreement signed in Entebbe last week takes away part of Egypt’s control of the Nile. Cairo has denounced the Entebbe agreement, and threatened to take legal and diplomatic measures to nullify it. "This is a national security issue," Egyptian officials have been reminding the upcountry partners over the years. "The Nile is life for Egypt."

The Nile Basin Initiative (NBI) was set up in 1997 and is supported by the World Bank. It has already led to co-operative work on hydropower and irrigation schemes, a vital issue in the face of looming climate change. But there are compete project proposals for the Nile’s waters and the

International Rivers Network (IRN) now classifies the Nile Basin as a global hotspot for potential water conflict. Nile Basin countries are among the world's poorest nations and are prone to instability.

After 13 years of hard work are about to culminate into a framework for harmonious sharing of the Nile’s waters, NBI faces a split as the seven upstream states pass a new deal that Egypt and Sudan find unacceptable. The upstream countries, faced with climate change, are generally trying to develop their agriculture based on more reliable water supply than rain, and the Nile waters are candidate for developing irrigation projects.

Ethiopia in particular has been prone to deadly famines whenever drought strikes and wants to take up irrigation using the Nile waters, of which it contributes 85 percent. Todate, many Ethiopian farmers depend on relief food donations.

Ethiopia's insistence to tap the water of the Blue Nile for Agriculture is likely to put it on a collision course with Egypt, which considers the Nile waters untouchable.

These are the types of conflicts that NBI seeks to immunize the Nile Basin against.

Ethiopia's Prime Minister Meles Zenawi in 2005 described current arrangement of the rights over the Nile water by the two downstream states as simply unfair. “While

Egypt is taking the Nile water to transform the Sahara Desert into something green, we in Ethiopia - who are the source of 85% of that water - are denied the possibility of using it to feed ourselves. And we are being forced to beg for food every year," he said.

He warned that Ethiopia would not be intimidated by historic threats of Egypt’s readiness to use force if necessary to maintain its control over the Nile. After a lot has been achieved to bring the Nile Basin countries closer in the past five years, now it is back to threats.

"It is an open secret that the Egyptians have troops that are specialised in jungle warfare,” Mr Zenawi said then. “Egypt is not known for its jungles. So if these troops are trained in jungle warfare, they are probably trained to fight in the jungles of the East African states. If Egypt were to plan to stop Ethiopia from utilising the Nile waters it would have to occupy Ethiopia and no country on earth has done that in the past." Of course lack of cash prevents Ethiopia from exploiting the Nile waters and the prime minister accused Egypt's opposing any international funding of large scale irrigation projects on the Nile, a charge Egypt always denied. While NBI has gone a long way in reducing such tensions, it is now back to unilateral decisions and red line proclamations.

81 years of a Nile Pact In 1929 Egypt secured a pact with Britain - representing its then East African colonies – giving Cairo the right to veto upstream projects that would affect its water share.

In 1959, another pact was signed by Egypt and Sudan, granting Egypt 55.5bn cubic metres of water every year – repre-

senting 87% of the Nile's flow. Sudan was allocated 18.5bn cubic metres, the remaining 13%.

In 1997, World Bank-sponsored negotiations over the management and development of the Nile resources took off with the creation of the Nile Basin Initiative. The structure brings together the

downstream states of Egypt and Sudan with the upstream Burundi, Democratic Republic of Congo, Ethiopia, Eritrea, Kenya, Rwanda, Tanzania and Uganda.

In -2010: As the agreements near completion, the upstream members sign a new deal which is disowned by Egypt and Sudan.

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Tuesday 18 May, 2010

PERSPECTIVE

PERSPECTIVE

TFA vows to take farming inputs to the whole country

Agriculture PS Mohamed Muya addresses the farmers in Morogoro

By Angel Navuri

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rriving at Morogoro’s main bus terminal of Msamvu, don’t ask a tax driver where the offices of Tanganyika Farmers Association (TFA) are.

He will say that he doesn’t know. But should you say you are looking for the office of Kilimo Kwanza, he will take you without hesita-

tion, to TFA. This little experiment shows how TFA actively is spreading the message of Kilimo Kwanza to the public as a way of supporting the implementation of Tanzania’s green revolution.

TFA main preoccupation now is to increase accessibility of agriculture inputs all over the country for farmers. For many of the farmers in the rural areas, commercial farming is simply not feasible because of difficulties traveling long distance to buy agriculture inputs. It was in pursuit of this

objective of spreading inputs countrywide that TFA recently opened a new branch in Morogoro and soon will be inviting new members to join the association During the launching ceremony, Ministry of Agriculture officials repeated the Kilimo Kwanza call saying that agriculture in Tanzania should become a business and stop focusing on subsistence for feeding rural households.

Once again, as has been the case on many occasions, the justification for Kilimo Kwanza was explained to the public – its is

simply the surest way to get the country out of mass poverty, given that 80 percent of the people of Tanzania depend directly on agriculture.

The Agriculture Permanent Secretary Mr Mohammed Muya added urged the people to change their attitude towards agriculture as an activity for the old and illiterate people but for everyone.

He gave cite exampled of developed countries like the United States where farmers of all ages cultivate using tractors that are fitted television and other ICT ap-

pliances.

“Let us join the farming profession without fear, and let all farmers join TFA or set up similar associations and networks,” he said. “That way, you find agriculture becoming actually enjoyable and quite interesting.”

TFA Chairman TFA Elias Mshiu said that the association is proud to have been actively engaged in the advancement of the agricultural sector in Tanzania for three quarters of a century.

TFA services have extended to the

whole spectrum of the sector from providing small holders with hand hoes to finding markets for products for large commercial farmers.

He said that the key challenges which negatively impacted their operations were identifies and the constraints addressed as far as possible. Underscoring the importance of farmers operating within a larger group rather than singly, the chairman however cautioned that this does not mean that there would be no ups and downs. “In fact we had more than our fair share of

hard and difficult days on several occasions we have been down but not out,” he said.

But we have always risen up and seen the next day.”

Mshiu explained that TFA has taken seriously its rightful role to provide quality farm input products and services to farmers, assist farmers in reaching both local and export markets for their produce and provide farmers with advocacy at both local and international forums.

“TFA’s mission now is to make sure that there is accessibility of agriculture in-

puts all over the country to all farmers,” he pledged, TFA now has 4,800 members and in 11 branches in the country and it will expand to more areas.

Giving TFA history, Mr Mshiu said that in1935-1945 The Kenya Framers Association (KFA) opened branches in Moshi, Arusha and Iringa, with the local headquarters in Arusha to serve farmers in Tanganyika, basing on principles similar to operations in Kenya.

In 1955 TFA Ltd was incorporated and took over KFA’s assets and operations in

Tanganyika. Soon after in 1962, the Tanganyika Government received an African Development Loan funding from the British Government to empower local farmers to increase their participation in agricultural production, especially in the management of large farms.

The government assigned the funds to TFA for management, greatly increasing TFA’s agricultural intervention capacity and contact with local farmers. TFA membership thus swelled.

In 1963,the Tanganyika government

established the National Agricultural Products Board which in turn appointed TFA as its main agent on account of its extensive and wide network of storage facilities and infrastructure. TFA services to farmers thus further blossomed.

But disaster was about to strike. in 1967 following the Arusha Declaration, the government confiscated and nationalised several TFA assets TFA investments in subsidiary and associated companies such as Farms Vehicles Ltd, Northern Dairies Ltd, the Vegetable Dehydration and Seed

Drying Plant. Private food crop export was banned. TFA and its members’ commercial and agricultural activities were devastated.

As if all that was not bad enough for TFA, in 1968 the government established the National Milling Corporation and legislated a crop confinement policy whereby only NMC and cooperative unions were allowed to buy crops, taking away TFA’s right to purchase process and market farm products and therefore its ability to supply farm inputs on credit to members.

Consequently, TFA’s services to its

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members were severely reduced as was its financial strength.

To rub more salt in TFA’s wounds, in 1973-1975 the government systematically abolished all cooperative societies and unions and established crop authorities to deal in various crop products. Farmers tried to turn to the emasculated TFA for farm inputs. But the government also nationalised all large farms measuring 50 acres and above, including TFA members’ farms in Tanga, Kilimanjaro, Arusha, Manyara and Mbeya.

In 1976 cooperative societies and unions were re-established and the National Agricultural and Food Corporation was formed by the government. Management of nationalised farms was handed over to NAFCO and to the new cooperative unions. In 1986 The Economy is liberalised and TFA started repositioning itself to recover lost ground. Several new private players entered the farm inputs market resulting in intense competition and closure of most of the small ones. Most of the government crop authorities started dying off.

In1989 TFA established an annual agricultural show for farmers, suppliers and service providers which was later taken over by the Agriculture ministry and renamed NaneNane.

But even under a liberalized regime, government weaknesses continue to haunt NFA. In 1994 for instance, the government delayed reimbursement of subsidies on large imports of bulk fertilizers for almost 10 years, sending TFA into a serious cash flow situation that stifled its ability to purchase supplies for farmers. Consequently financial performance declined over the years that followed, giving more room to new players. By1995 TFA branches were operating in Arusha, Moshi, Dodoma, Iringa, Mbeya,Tanga and Dar es Salaam along with depots in Oldeani, Karatu, Mafinga, Mbozi, Mwanga, Tukuyu and Babati.

In 2003, TFA’s Arusha shopping centre opened for business on Sokoine Road. The TFA complex has since grown to became one of the largest shopping centres in the country.

In 2007, TFA’s new four year cooperate strategic plan was approved by the board to return TFA to profitability after several years of losses. The plans focus on growth in both its farm inputs and services to members as well as growing its commercial property business for cushioning in the volatile agriculture sector.

At the end of the Morogoro event, TFA’s Managing Director F. Wanganju appropriately quoted Founding President Julius Nyerere thus “because of the importance of agriculture in our development one would expect that agriculture and the needs of agricultural producers would be the beginning and the central relevance point of all our economic planning, instead we have treated agriculture as if it was something peripheral, or just with all others, and used by others without having special claim upon them, we are without exception , and every parastatal and every party meeting would be working on the direct and must now stop this neglect of agriculture, we must now give it the central place in all our development planning for agriculture is indeed the foundation of all our progress.”

There were testimonies of managers who are dealing with TFA. One of the mangers for FICA Seed, Mr Goodluck Minja said that their products have been packed into small quantities in a way that any farmer can afford buying the seeds.

Minja said that the company always makes sure that the seeds reach to the farmer at the right time being helped by TFA. MEA Fertilizers Country Manager Francis Ndegwa said that the company deals in all types of fertilizers for all types of crops, being sold in small quantity starting from 1kg so as all farmers could afford.

He said that the company its self cannot be able to distribute the fertilizer all over that’s why it’s being helped by TFA. Kickstart Regional Sales Officer (Mbeya, Rukwa) Stanley Raymond said that Kickstart targets small farmers and the ‘moneymaker’ pumps are sold to small scale farmers farmers can afford.

Under the Kilimo Kwanza strategy TFA has identified a number of opportunities for collaboration with the government to support and enhance the effectiveness of the strategy. Underpinning most of these opportunities is the use of the TPA distribution network to support the government in its endeavour’s to promote higher productivity of farms across Tanzania. TFA has claim to offering an efficient and focused conduit for information, services and supplies to reach the wider farming community via a trusted, private and Tanzania owned organization Like many other organisations of this nature, TFA’s intends to fund its growth plans from both internal revenues and external financing. But again like other organisations in Tanzania, TFA finds funding from banks “not forthcoming… unlikely to be obtained”.

So they are waiting for the day government will help to fill this funding gap through the Tanzania Investment Bank agriculture window and eventually Tanzania Agriculture Development Bank, when it becomes operational.

The Guardian KILIMO KWANZA 8

By Miki Tasseni

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ROF. C.K. Pahlad who for many years worked with Michigan University in the United States is credited with having thought up the notion of ‘bottom of the pyramid,’ whose ingenuous sense of strategy was creating a large consumer market out of the ‘poorest of the poor.’ In classical economic outlook this zone was nearly beyond reach for routine marketing strategies, but with this innovation gathering pace in the 1990s, corporations started thinking of how to reach the ‘bottom of the pyramid.’ Plenty of micro-financing strategies arose from such thinking, when its initial motive of charity was superseded.

At present the matter is no longer being debated, as to whether the poorest sections of society constitute a market or they aren’t, and additionally, it isn’t just a few corporate entities who think of this market.

Everywhere the various market leaders have found ways of reaching this bracket of potential consumers and real users of a large array of products, for instance how mobile phone service providers fought tooth and nail to reach the nooks and crannies of urban and rural society. The same can be said of productive utilities like power tillers, whose acquisition and use by the breadth of farmers is crucial.

One method that corporate entities like Nestles used to reach the bottom of the pyramid in potentially large markets of the poor as in India or Bangladesh was to create local zones of credit and extension of product acquisition by credit.

Such procedure required the use of peer pressure in acquiring the product and in paying the loan, in the case of Nestle being heifers and collecting milk from those who participated in the program.

Soon the company was obtaining a large part of its needs from far cheaper sources than before, and its ability to sell to the breadth of poor potential consumers equally improved.

Other dimensions of reaching out to ‘the bottom of the pyramid’ has been in education, but experts note that not many entrepreneurs move into vocational education as it doesn’t pay as much as formal education, as the latter is more competitive.

Where this problem has been noticed for instance in India, many state governments started working to bring up solutions where subsidies are extended for service providers, enabling the government to watch on standards, as it would have a say on what happens in those schools. But the fact that they remain private helps to generate more enterprise, and diminishes costs, thus making subsidy by the government supplement to private effort, enhancing effectiveness.

There are various areas in which these diverse methods of reaching out to the ‘bottom of the pyramid’ can be applied in relation to Kilimo Kwanza thrust in the regions, each method depending on the sources of initiative, financing, and capacity of the groups targeted. While a number of tractors have already been spread in various regions, those who remember the collapse of tractor use efforts during the heydays of Ujamaa villages are singularly worried whether this time things will be different. It was one of the key reasons why US Ambassador Alfonso Lenhardt was quoted or otherwise interpreted in the local media – and in the first Kilimo Kwanza supplements – as apparently showing he was ‘opposed to mechanization.’ It was a bit more complex; rather, it was sustainability.

With specialized farming being mooted, for instance it was being suggested by some MPs that each region or district have its specialized crop where technical support becomes easier to provide.

Problems facing such crop extension, when this is fairly uniform in a given area,

Tuesday 18 May, 2010

PERSPECTIVE

Positive, lasting change must first reach the bottom of the pyramid

also become easier to handle, especially if it is the public authorities who are expected to do something; they habitually worry only about what touches large numbers of people. The reason is that when something be-

comes widespread among residents of a particular area, it begins to have an effect in representation, as it becomes a policy input.

Where it is private companies which

conduct extension, such uniformity would not be entirely relevant, but rather a substantive presence of people conducting similar crop or other activity – for instance processing of various farm produce. When

their mode of starting such business arose from extension effort to reach the ‘bottom of the pyramid’ they can similarly create structures for consultation and common problem solving. In that case the relevant

corporate entity would have reason to keep its doors open, and not just doors but having field representatives, phone numbers for use by individuals or groups as the case may be, etc. It is a question of the design, as it has worked in various countries.

The difficulties that open up in the Tanzanian context for that matter is that there are two traditions in development activity which are largely complementary but potentially inimical with a commercial thrust in the ‘Kilimo Kwanza’ extension aspect. The first aspect of tradition is government supply of public goods, and during the Ujamaa period, even tractors were supplied by the government to villages, and they were simply expected to take care of them.

This mostly failed, in like manner as the government set up regional transport companies, lined up vehicles, and what regions were supposed to do was to maintain them and use the profits for development; it didn’t happen as it was expected.

The other aspect of that tradition is donor aided projects, which are also public but have a donor tag at first, before eventually being transferred to local authorities to administer and maintain – as during the Ujamaa days. Already there are numerous cases of failure once project funding from outside ends, as no infrastructure of civic responsibility or a transition to commercial use has been prepared.

The fact of its being an aid project for the use of villagers, where the whole effort is clothed in charitable sentiments, hinders any eventual transfer of such project to individual operators, as this looks like theft, ‘ufisadi.’

At the same time, starting a project right from the word go as commercial risks failing the test of reaching the ‘bottom of the pyramid’ as its user capacity would have to be ‘terms cash,’ which can scarcely work, at times even for private dispensaries. For the latter, it has been learnt that they need to keep their fees very low, making it necessary for the subsidy element to be brought in, and in that case this could be a workable model for aid projects as well.

They are easier to adapt to a user-friendly private sector character, where from the word go people are involved in a civic capacity, rather than communities. It is this initial communitarian approach which cripples the shift to civic cost-recovery mode.

Just how far such questions would have been raised in the various colloquia of the World Economic Forum meeting in Dar es Salaam lately is a different matter, but it is certainly of considerable interest for instance to the World Bank. Since 1996 research has been directed at ‘making aid work,’ and it is hard to see if any hard answers have been reached or started being applied, given the fact that the most substantive idea circulating as late as the 2005 ‘Accra agenda for action’ was to direct more aid resources to budget support. When this is the case, it follows that projects would be developed as public goods that are provided by the government, construction supervised by local governments or central government agencies, with costing structures, pilferage or non-accountability staggering.

Overall, at least as a point of departure, one feature would be to redesign development work as a whole in such a manner that loans to groups like SACCOS, or funding directed at local governments by aid organizations, and even substantial portions of what is now directed at the central government could be redirected. What used to be called the ‘JK billions’ could provide a framework for pooled resource building for various sorts of needs, for instance crop processing, building schools etc where individual credit is tied up with social goods. That way a civic element of costing and recovery, as well as putting up credible structures of accounting and not the lethargy and pilferage reigning at present, improves both local government work, aid projects and enterprise at the local level, thus effectively reaching out to the ‘bottom of the pyramid’ in extension, training, enterprise.

Good connections needed for commercial agriculture

By Mark Magila, Tanzania Agricultural Partnership MUCH of Tanzania’s agricultural activity is disconnected. Farmers are poorly linked to inputs, finance and markets. This makes farming inefficient and uncompetitive. It also leaves most small-scale farmers stuck with unproductive, traditional methods that sustain rural poverty.

Many people are talking about Kilimo Kwanza concept and how to achieve its goal. Tanzania Agricultural Partnership (TAP) provides a practical model that can assist Kilimo Kwanza move from concept into action.

Currently working in 25 districts, TAP brings together key actors in specific agricultural value chains, and helps farmers and local agri-businesses become more efficient and more profitable. This contributes directly to reduced rural poverty, agricultural growth and stimulates the local and national economy.

A LESSON FROM MBARALI In Mbarali District TAP has helped a local Public-Private Partnership develop a TShs. 4 billion local Commodity Investment Plan (CIP) targeting rice. The plan includes upgrading irrigation canals, farmer-tofarmer exchange visits and technical training on a high yielding, high quality rice va-

riety. In addition, four Warehouse Receipt Systems have been developed. Facilitated by the Rural Urban Development Initiatives (RUDI), the CIP work brought together the rice farmers’ apex organisation (AMBERICO)), the National Microfinance Bank (NMB), the Local Government Authority, the Association of Mbarali Agrodealers, the national small-scale farmers’ NGO (MVIWATA) and a number of local and national agricultural processors and traders.

A 146 million Tshilling credit from NMB financed post-harvest payments to the farmers against the collateral of 616 tons of un-milled rice which was stored for sale at a better price later in the season.

Segments of the plan suitable for public finance were submitted to the District Council for inclusion in the 2009/10 Budget and qualified for finance through the national Agricultural Sector Development Programme.

As the plan was prepared by the people who were going to have to make it work, and would directly benefit from it, there was a better chance of it working than many other plans. Agreement was reached on each partner’s role in achieving the common objective of value chain development.

The major risks were identified and plans established on how best they could be shared and managed. At the moment, 143 tons are left unsold and Tshs 100 million

left to be repaid on the loan.

Inevitably, the Mbarali plan was not perfect. Although the farmers were able to get a post-harvest payment, they were reluctant to sell later in the year when the price did not reach the levels of last year.

The lessons learnt from the first years’ work include the need to watch the price changes more carefully and realistically, and the need to develop local milling capacity to add value to the crop and command better prices in the future.

This is just one example from one district of how TAP works. After initial pilot activities in five high potential Southern Highland districts during 2007, TAP started expanding field work in 2008. Phase one

in 25 districts will end this year. The work has been mainly financed by the Government of Norway. More recently, a Food Facility Grant from the European Commission has continued part of the work by focusing on rice and maize.

TAP operates as an open, inclusive partnership. It is run by a small independent unit within the Agricultural Council of Tanzania. The main role is to catalyse and link the activities of the many partners around specific agricultural value chains.

This includes extension and demonstration, inputs (seeds and fertiliser), finance (especially credit for inputs and warehouse receipt systems), information and output marketing.