Tuesday 31 August, 2010
SUPPORTING THE PROMOTERS OF THE GREEN REVOLUTION
kilimokwanza@guardian.co.tz
Irrigation: Bahi District takes the lead
Tuesday 29 June, 2010
SUPPORTING THE PROMOTERS OF THE GREEN REVOLUTION
kilimokwanza@guardian.co.tz
Planting maize banned Residents must harvest rainwater Unused fertilizer confiscated
Sorry, no title no loan
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Tuesday 31 August, 2010
EDITORIAL
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Modern irrigation becomes a reality in Bahi as Israelis arrive to pilot drip methods Local farmers and government experts have joined hands to ensure construction works for irrigation schemes in Bahi district take off at record speed.The District Commissioner, Mrs Betty Mkwasa, is one woman in a hurry to ensure Kilimo Kwanza in Bahi becomes a reality, whatever the obstacles.
RLDC working to make poultry farmers and cotton growers richer
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Time to get clear headed about agricultural financing lmost everyone in Tanzania, farmers and non-farmers alike, says lack of finance is a major hindrance to agricultural modernisation and commercialization. The peasant farmer says he is stuck in poverty and subsistence farming because he lacks capital to break out. The urban worker says he cannot take part in the country’s inviting agriculture sector because he lacks the capital to break in. The political leaders say they are setting up an agricultural bank and agriculture windows in other banks to help the farmers to access capital so they can break out of their poverty circle. The bankers say they are willing to lend the farmers money provided they are provided security, otherwise known as collateral. The government says it is speeding up the documentation of land so that farmers can get certificates of registration for their land, so they can access bank loans. But it will take more than just the provision of cash or a tractor loan to turn a peasant into a commercial farmer. Treating agriculture like a business starts with the mind. A peasant mentality may not simply be changed by using a tractor instead of a hand hoe alone. In a situation where agricultural extension services are long broken down; where natural climatic conditions still control over 95 percent of the arable and livestock farming; where many people find it difficult to differentiate between personal expenses cash and business funds – don’t even our elite mix up departmental funding and their own personal needs – it may require more clear headed guidelines if funding to farmers is not going to end up as a failed initiatives. Elsewhere in this paper, a well established agribusiness operator has suggested a round table bringing together planners, lenders and borrowers to put their heads together and agree on the structure of the package that a farmer needs to take off with minimal risks of failing before even the second harvest. He takes a hard look at the belief that increasing the ploughing capacity – that is a farmer opening up more acres of land – is sufficient to launch him into the ranks of commercial farmers. There writer says that there is an urgent need to determine the minimum package of equipment necessary to for a small farmer to produce for example maize and rice competitively so that we can supply our domestic market, export our surplus profitably and raise our farmers’ standard of living to well above the present poverty line. By simply enabling a farmer to plough more acres, without a corresponding increase in his ability to tend the larger area and output, you might actually put him
in more trouble than he was in when he was tilling a small piece of land. A tractor is a mere carrier of a set of equipments, which are more than a plough. So after opening up a few hundred acres, a farmer needs an increased capacity to plant them, weed them, harvest them and protect the output from the notorious postharvest losses occasioned by lack of storage and poor handling. Relying on hand labour could be more costly than using technical innovations that may have been overlooked, or denied, when the initial loan was being taken. At current farm gate prices of Tshs240 a kilo of maize for example, it does not make sense for a farmer to pay Tsh200 per a kilo of maize to be hulled by hand, but this is the going rate. So that is what he will have to do faced with a large output he is not used to handling, if he opened up more land than he is equipped to handle. But that is if he gets to produce the large output in the first place. He may plough two hundred acres because he borrowed Sh37 million to buy a tractor, but lack money to secure high quality seeds, provide water if the rain fails, buy fertilisers and herbicides and finally successfully harvest all the produce. What is clear therefore is that technology should not just be applied to a small portion of the process. There should be enhancement along the whole chain so that one enhanced step is not rendered ineffective by the stunted ones. It is important to examine creative ways of enhancing farmers’ access to better technology without exposing them to high credit risks. There is no need for example for a farmer to own a tractor that will be redundant for most of the time. He should only borrow money to hire one for a few days. But before being given the loan, he must show proof of having access to a rentable tractor like belonging to a society that has one for hire. We should avoid turning peasants into debtors who failed because they borrowed to buy pieces of equipment that did not increase their productivity. Someone may fail to pay back say, shs40 million he borrowed to buy a tractor yet if he had borrowed a little more he would have made profits and been able not only to pay back but also to prosper. It is important to give loans. It is even more important for the borrowers to succeed and can pay back.
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INVITATION FOR PROPOSALS (IFP) FOR
CONSULTANCY TO UNDERTAKING SUB SECTOR ASSESSMENT FOR GRAPES
Introduction Rural Livelihood development Company (RLDC) is a non for profit organization that works in six regions of the central corridor with a vision of making market systems work better for rural producers to improve their welfare. RLDC delivers its mission through working in specific selected sub sectors mainly agricultural and those that are closely related. Currently RLDC has interventions in dairy, sunflower, poultry, rice, radio and cotton. RLDC continuously seeks to assess the potentiality of other sectors or sub sectors in the central corridor first for knowledge base and second for potential development of the sector. RLDC has set aside funds to undertake several sub sectors assessments during the period 20102011. For these particular Terms of reference, RLDC would like to undertake an assessment of the Grapes sector. This term of reference is prepared to provide the consultant with proper guidance of expected activities and deliverables from the assignment. Objective To assess and develop a grape sub sector analysis for the central corridor.
Specific Objectives: • Undertake value chain analysis of grapes subsector • Asses and analyse the grapes sub sector business environment in Tanzania context. • Asses and analyse the support functions of the grapes sub sector in Tanzania.
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The main aim of starting a farmer’s bank is to make sure farmers are independent and can access loans more easily than is the case with other banks.
Wallace Mauggo Editor
8 Artwork & Design: KN Mayunga: changetz@yahoo.com
Sorry, no title no loan
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The country is currently gripped in Kilimo Kwanza Fever with both private sector and the government looking to the land and Agriculture to end the dire poverty gripping the masses who live in this bountiful resource rich country.
Another farmers Bank to take off with 50bn/-
FINANCE
Agriculture window at TIB yet to lend farmers Lands ministry speeds up surveying the countryside Investment Bank advises farmers to form groups
As the government is struggling to curb the problem of access to market for the farmers Rural Live hood Development Company has engaged itself in making markets work for producers as a way to support Kilimo Kwanza.
A mere tractor loan can worsen a farmers’ situation
The Guardian KILIMO KWANZA
Tuesday 31 August, 2010
To have your organisation promoted in Kilimo Kwanza, Call: 0787 571308, 0655 571308 0754 571308
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Nyambusani and Mazigo By Angel Navuri hey turn up empty handed and enquire about the loans they have been promised by the political leaders. The bank of course turns these typical Tanzanian peasant farmers away, until they can show that they have a registerable interest in the land they are farming on. Understandably, they are baffled with the Tanzania Investment Bank, which recently set up a specialised window to lend farmers, also being among those that will not entertain a borrower who has no land title. But a solution is on the way. The process of registering, surveying and titling land has gathered momentum. What is more, the (Central) Bank of Tanzania has also taken a bold step and set up guarantee schemes with banks that are involved in financing farmers. Most peasants in Tanzania say they cannot step up their scale of agricultural operations because they lack capital. Yet they possess the most important capital input for farming – land. How then do they heed their leaders’ call to modernise and commercalise their farms in order to break out of their poverty trap? Since the declaration of Kilimo Kwanza a year ago, farmers have been advised to seek finance from banks as the quickest way to secure modern equipment, buy inputs, improve storage and engage in basic processing to stem the colossal post-harvest losses. But the banks require security, which most farmers do not have. The wake up call must have come with the opening of the agriculture window at the Tanzania Investment Bank – and the farmers did not qualify to borrow there. Reason? No security. Despite their holding hectares upon hectares of land, Tanzanian farmers cannot take this valuable asset to the bank, because most of them do not have official documents to prove their ownership, the documents through which ownership can be legally transferred to a buyer, or a creditor. All that is set to change, however, as the Ministry of Lands, Housing and settlement embarks of an exercise to step up the surveying and registration of land upcountry. The ICT Director in the ministry Mr Elias Nyambusani disclosed to Kilimo Kwanza in Dodoma recently that they have started in earnest to survey the country, especially those areas where farming is taking place with a view to issuing the bona fide farmers with titles to their land. That way, the farmers should be in position to present the titles as collateral in banks
where they seek loans for capital. It is not an easy task because, as Kilimo Kwanza recently reported, up to 89 percent of the land in Tanzania is not yet surveyed. The whole country measures nearly one million square kilometres, of which about 17 percent is surface, fresh water. A total of 44 million hectares are suitable for agriculture but only a few of these are being utilised, far below their optimum potential. Documentation for some nearly two hundred thousand hectares is being fast tracked through efforts of the Tanzania Investment Authority and the Prime Minister’s Office for depositing in the Land Bank from where large scale commercial farmers shall access them. For its part, the Tanzania Investment Bank is encouraging small farmers to mobilise themselves and form groups which shall be dealt with to provide some financing, but still this will have to be preceded by documentation of land. TIB’s manager for Small and Medium Enterprises Benjamin Mazigo was emphatic while speaking to Kilimo Kwanza that without documentation of their land, the investment bank shall not be able to deal with the farmers. “So the ball is back in the government’s court to ensure farmers have documentation for their land,” he said Apparently, Kilimo Kwanza has now reached a stage where the participation of the ordinary farmers cannot meaningfully go forward until they acquire documentation for their land. President Jakaya Kikwete himself has repeatedly called upon farmers to secure documents of registration for their land. According to the Lands ICT chief Elias Nyabusani without documents, farmers cannot access institutional funding for increasing productivity and yet most of them are cultivating very small pieces of land due to lack of equipments. Nyabusani said that its now high time for large-scale commercial farming to take the lead as it will also sensitive the small farmers to grow more and supply the commercial farmers. This, he said, will be the best way for the farmers to be able to produce more as they have a reasonable guarantee of market. According to the director when commercial farming picks up, it will help the farmers to utilize the land better than ever before because with more assured markets than looking at the limited official reserves or the long broken-down government industries that cannot absorb the products from the farmers. Speaking about external factors Nyabusani said that there is a problem with Tanzanian laws that allow business people to import low quality, cheap products that adversely affect Tanzanian farm
products. “The government should review the trade laws to make sure that there is reasonable security for Tanzania products and infant industries by raising the price for foreign products,” he said. To empower the Tanzanian farmers, Investment Bank SME manager Benjamin Mazigo explained that the currently farmers are being advised to form themselves into groups of twelve to make it easier for them to be financed more than as individuals. “Currently farmers are forming themselves into groups as a way to be financed to be able to buy the agriculture inputs as it will be difficult for the Bank to handle individual farmers,” he said. “There are those that cannot afford to buy a power tiller but it will be easy for them to be in groups” He said there are no two ways about securing loans as the bank is also doing business and cant knowingly bankrupt itself. He pointed out that not all farmers require the same level of financing to improve their output, as they are at different stages of development, with some only in need of small sums for some inputs, hence the need to have them in groups that can be lent large sums. The Bank of Tanzania 2007 report shows that loans to the broader agricultural sector accounted for only 10.4 percent of the total loans to the private sector. Yet such loans are currently available at rates for industrial production, and in reality only 0.8 percent of the total lending by commercial banks was directed for agricultural production. There is also evidence of funds earmarked for the agricultural sector remaining unutilized in some commercial banks when channeled through them. It also turned out that even lending of donors funds to agriculture is still an interest rate of 20 per cent, which actually defeats the whole purpose of the existence of such funds. It remains doubtful whether commercial banks will on their own decide on concessionary lending in agriculture, the bank notes, and that legislation in this regard may be necessary as India among others has done. The Permanent Secretary Ministry of Agriculture, Food Security and Cooperatives Mohamed Muya said that it is now high time farmers should change their attitude towards crops to be planted as many of them still see food as maize and rice only, but they have to think of other crops like cassava, and potatoes. According to the PS, peasant farmers should start to distinguish between crops for business and those for domestic use. He acknowledged the challenge of storage and infrastructure that farmers cannot handle on their own and is the responsibility of the government.
Specific tasks: • Identify the number of households involved in the sector disaggregated by gender • Identify the number of processors and potential processors in the sector including location, capacity and actual processing capacity. • Identify the total area under grape cultivation as well as potential • Analyse the market trends of grapes and grapes products • Analyse any ongoing initiatives and comment on their relevance to development of the sub sector. • Analyse and evaluate the economic potential in terms of revenue vs. cost and time • Meet and hold discussions with farmers, processors, LGAs in Dodoma Urban, Chamwino and Bahi • Hold a half day stakeholder meeting where you make a presentation for the findings of the study and to get feedback from the stakeholders. • make conclusions from the study and recommendations to RLDC • Show types/varieties of grapes and potential of each variety • Identify key constraints to the sub sector development based on the above context • Assessing in which ways women profit or can potentially profit from the sector • Identify the inequalities between women and men in accessing and controlling resources in the sector Approach to Undertake the Assignment The assignment needs to be undertaken by exploration of information both from the secondary and primary sources. Field visits, interviews, focus group discussions with relevant stakeholders needs to be employed in undertaking the assignment. The consultant shall also work in close collaboration and support of the team of interns at RLDC market development department.
Coverage/Scope The assessment needs to focus more on the grapes production region mainly Dodoma but also collect and analyse information at the national level as well as the grapes in the international market.
Deliverables The contracted consultant will deliver to RLDC, • Work plan/schedule of activities to be undertaken during the agreed time frame. • A draft subsector assessment report in MS word version and also conduct a power point presentation to share findings with grape stakeholders including the local government authorities. A final improved version of the report that shall address comments and issues raised during the presentation of findings. Profile of the Consultant • A minimum of five years experience in market research, sector assessment tasks as a consultant • A background knowledge of the grapes sub sector or wine industry • High level of competency in analysis of data and information • Ability to facilitate workshop, meetings and conduct presentation to share findings to stakeholders. • Understanding of Dodoma municipality and its suburbs is an added advantage. • Experience in dealing with/working with rural communities • Fluency in both spoken and written English and Kiswahili Time Frame This assignment need to be undertaken for a maximum of 30 working days from the contracting day
Application and Further Information on the Assignment • Deadline for application is 10st September 2010 at 4.00PM. • Only short listed applicants will be contacted for further details and assessment of capacity • Applicants should submit an assignment proposal. The proposal should include cover letter, updated CV of the proposed consultant(s), profile of the consultant or of consulting firm, relevant certificates, a detailed work plan with time table and budget quoted in Tanzania shillings and be sent to. Chief Executive Officer Rural Livelihood Development Company (RLDC) 2nd Floor, NBC Building, Kuu Street, P.O Box 2978, Dodoma Email: info@rldc.co.tz
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The Guardian KILIMO KWANZA
The Guardian KILIMO KWANZA
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COVER STORY
Tuesday 31 August, 2010
The Guardian KILIMO KWANZA
Tuesday 31 August, 2010
COVER STORY
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Modern irrigation becomes a reality in Bahi as Israelis arrive to pilot drip methods
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By Angel Navuri,Bahi ocal farmers and government experts have joined hands to ensure construction works for irrigation schemes in Bahi district take off at record speed. The District Commissioner, Mrs Betty Mkwasa, is one woman in a hurry and is not sparing any efforts to ensure Kilimo Kwanza in Bahi becomes a reality, whatever the obstacles. No meaningful agricultural development can be expected in semi arid areas without irrigation but competent firms that can set up the required infrastructure are not readily available. Hence the need to creatively assemble teams that comprise experts borrowed from the central government, local agriculture officers and peasant farmers themselves who are the intended beneficiaries of the irrigation schemes. These creative efforts have seen the birth of new irrigation schemes in Bahi namely Mtitaa which is costing Tsh400milion, Chikopelo that will consume Tsh606 million and Mtazamo whose cost is Tsh675 million. Besides these budgetary disbursements from the government, another major contribution whose cost has not been computed is the labour provided by the local farmers in clearing the paths and helping in the excavation of the canals. Speaking to The Guardian’s Kilimo Kwanza that visited the irrigation schemes, the District agriculture officer Sylvester Kashaga said that the constructions are in the last stages and they will be handed over by November. The farmers are involved in the process of the construction so that they can also gain guidance from the contractors and the agriculture officers. It is a two-way process, for they also provide local knowledge to the experts as construction goes ahead. According to Mr Kahsaga, Bahi was supposed to have 10 irrigation schemes but they have decided to have four big irrigation schemes instead of having many of them that have a limited capacity of serving. Kashaga said that the establishement of the schemes it’s for boosting rice production in the interim, then later they will have other crops included too. The projects will be depending on a combination of the rivers and rains as a source of supplying water. “For this irrigation schemes the famers will depend more on the river water and the rains, “he said, explaining that it will be seasonal farming. Besides harvesting the rains, water will also be obtained from the rivers Bubu, Mtonga, Mkambala, and
Local contractors say government tendering condititions too stringent for them
Tshs1.6bn worth of irrigation schemes to be handed over by November
Makorongo. Besides the volunteer labour from the farmers, the District Agriculture Officer also highlighted the major commitment of the District Engineers and technicians who made the as irrigation construction possible. “There is money for irrigation development for all districts in this country but why some have not taken off is partly due to lack of such committed technical personnel as the ones we have in Bahi,” he explained The district commissioner Betty Mkwasa said that her district managed to get good contractors after they advertised in the media and scrutinised the qualifications of the applicants. Mkwasa also disclosed that Israeli contractors will be coming on board very soon and 20 hectares have already been earmarked for them to start a pilot drip irrigation schme with several farms. This will be just the first phase of a project that will cover 116 hectors for the entire drip irrigation pilot scheme. Asked how she managed to attract so much money (over a billion shilings) to the district’s irrigation scheme, Mkwasa said they got the funds by writing good, convincing proposals by the help of their agriculture officer. “We were not given the money that easily,” she recalled. “For your district to benefit, you have to submit proposals that are good and convincing of you are to the needed funds for construction,” she said “I think we got more money this year than any other ditrict for irrigation,” she said. “But we still need more because irrigation construction is quite expensive.” Mkwasa also said that plans of drilling boreholes for farming are underway since the area is so dry and there will be specific areas since many of the areas have salty water. Speaking on the shortage of seeds, she said in her district it is not yet a problem. The DC reiterated that her ban on planting maize in Bahi is still in force and “serious action” awaits anybody who dares violate it.
District agriculture officials and local farmers took the Guradian Kilimo Kwanza aroiund the ongoing irrigation schemes construction works recently
“Changing the mindset of the people to agriculture is a challenge leadership at all levels in the country is still facing,” she said. The DC slapped a ban on the planting of maize in her district earlier this year, saying it is time residents realised that there are other, more profitable crops – including rice - to grow. She also ordered the confiscation of fertiliser obtained under the subsidy scheme that may be found lying in people’s homes instead of being taken to the gardens. Extension agriculture officer Seshika Mchomvu expressed the confidence that from now on, the Bahi farmers will produce more than enough for subsistence because of the irrigation schemes that that have been started. He said that at first farmers could not produce enough because the water could not move to the farms as a lot was sinking to the ground but now it will be easy as the water flow is technically controlled. Irrigation officer Nicolas Lipundu said that the renovation of the dams will help in collecting more water and it will help in controlling more than before. He said that at first the water held by one dam was 56,000 cubic metres but after renovation the dam can now hold 60,000 cubic metres. According to Lipundu before renovation of the dam and construction of the irrigation schemes the water used to “pass through” and not getting to the farms but now the water will be controlled and directed to where its needed. He said to further boost the irrigation capacity, a survey tp precede drilling of boreholes will start soon as to avoid from getting salt water that is not good for irrigation. A local farmer, Mr Hassan Abubakar said that they didn’t expect that irrigation construction could become a reality, and can hardly believe their good luck. He expressed satisfaction that in addition to providing more water for farming, the irrigation scheme actually controls the
floods, something they had never expected to see in their lifetime. Abubakar noted that right now the framers are happy and are ready for serious farming and are fearing that they might produce too much produce for the available
market. Speaking on behalf of the other local contractors, Contractor Christion Kaguo of Kaguo Business Enterprise CO.LTD said that the construction will be handed over by November. But Kaguo urged the government to re-
view its irrigation contracts guidelines which he said have a lot of limiting regulations that many local contractors are failing to meet. “We have good contractors too in the country but the government should review
its irrigation contracts as there are so many issues to be tackled. This has lead to many of contractors not being interested in applying for the irrigation contracts,” he argued. “That’s why the government is facing a challenge of getting good contractors.”
The Guardian KILIMO KWANZA
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By Angel Navuri, Dodoma s the government is struggling to curb the problem of access to market for the farmers Rural Live hood Development Company has engaged it’s self in making markets work for produces as a way to support Kilimo Kwanza.
Tuesday 31 August, 2010
INTERVIEW
RLDC working to make poultry farmers and cotton growers richer
Q: Do you have any plans of expanding the facilitation role? A: We are expanding our facilitating role in the market development into sectors like dairy, poultry and rice, the implantation of the market development facilitation just started in 2009 and the first results were expected by mid 2010. The goal of the dairy sector effort is to transform informal market initiatives into a well organized, formalised market system. The poultry sector efforts replicate a successful pilot project which was facilitated by us in the Bariadi district; we have also concluded an assessment of the rice sector and have shared a strategy for the sector market development with market actors to build a long term common vision for the rice sector. Q: How do you find the market internally and externally? A: We don’t find the market but we develop market systems for rural producers to improve their welfare, and this involves both internal and external because we focus
T Jonathan Lane
Q: Please give us a brief history of RLDC? A: It is a non profit company financed by the Swiss Agency for Development and Corporation was established in the central corridor of Tanzania with a goal of making markets work for rural producers. Part of the technical expertise is provided by Swiss organization interoperation and swisscontact. Rldc is working to facilitate market development in the following sectors: sunflower, cotton, rural commercial radio, dairy, poultry and rice. We have established and implemented a unique and systematic approach within market facilitation. The organization is continuously looking for partners from private and public side to share the common vision of making systems in Tanzania work better for rural producers to improve their welfare.
Q: Why should public and private sector should get involved in RLDC market facilitation activities? A: A systematic approach such as ours is key to bringing about change in market development. Making markets work better for the poor approach is recognized by development workers as the most effective approach to bring about change in market systems and therefore sustainable development. In diverse sectors such as agriculture, health, water, livestock, manufacturing and mining, efforts at direct intervention fail because the systems are not in place to sustain the effort. The poor are dependent on market systems for their live hood. Therefore changing the market systems such as regulations, tax policies, access to financial services, productivity improvements, tends to work more effectively and sustainably to improve livelihoods and reduce poverty. We combine market development with a clear pro poor focus in a difficult economic area. Following this vision is our mission to link market development to poverty reduction for rural producers, mostly small holder farmers. The organization aims at improving the welfare of about 80,000 households by the end of 2011, which corresponds to half a million people. The market economy is still not fully functional and the government continues to play an important role as a key actor in market development which elsewhere is considered to be the domain of the private sector. We are the leading facilitator of the market development in the sunflower sector. Sunflower oil has a great potential for the whole of Tanzania and more specifically for the central corridor with its dry climatic conditions, and we hold a leading role in the market development. We facilitate the following activities: improving the production and marketing of quality seeds, establishing contract farming systems between rural producers and processors, certifying oil quality standards, and refining sunflower oil. We are the biggest facilitator of market development in the cotton sector. We facilitate market interventions in organic and conventional cotton with emphasis on contract farming and warehouse receipt systems, which allows cotton farmers to take up loans on their produce.
Tuesday 31 August, 2010
Earning cash from organic cotton
Mr Oguttu, the RLDC chief, talks to Kilimo Kwanza more on the local market which later will lead external market as well as foreigners buying and exporting. Relating to Kilimo Kwanza we sensitize the farmers to have good relationship with local industries, so that they will be able to sell their products. Q: How do you earn money to run the market development system? A: The money is from donors and we have to account for every cent, and the donors are still supporting to make the program a success.
Q: What are the challenges that the organization is facing? A: There are so many challenges but would like to mention few like infrastructure in the rural, private sector sector they are not dynamic for example on research they always avoid risk, climate change is also another challenge . Q: How many regions is the organization dealing with? A: We are dealing with six regions which are Dodoma, Singida, Morogoro, Tabora, Shinyanga and Manyara. RLDC is continuously concerned about the fate of small producers, especially with respect to access reliable markets which could ensure continued income and enable rural producers to access financial service for purchase of inputs and cash against crops in the field. The contract farming intervention in the cotton sector is geared to provide the con-
A happy peasant with the products of her “golden eggs”
Sunflower can grow in most parts of the country, including the drier ones
tracted farmers with agri-inputs, such as improved seeds, fertlizers, agro-chemical, extension services, all partners of RLDC exercise contract farming. The aim in the cotton sector is to increase productivity in cotton growing from a current average of 270kg per acre to an average of 340 per acre, which increase of about 25 percent. Organic cotton producers are supposed to increase from 3,000 households to 6,000 households by the end of 2010. Imprioved business environment through good contract and communication among cotton stakeholders is one of the preconditions to achieving these targets. Through the cotton strategy the organization expects to reach 25,000 households, of which a quarter are organically trained. Organic cotton farming has expanded and has proven to be a viable option to access premium markets. Over 3000 farmers had organic certification in the 1st year in Singida region. The organization aims at transforming the poultry sector, which is a conventional subsistence activity into a commercial business, to provide employment and income for rural small holder producers, and in particular for women. A thorough assessment indicates huge potential in the poultry sector, especially in the central corridor. In its earlier phase the organization facilitated interventions to improve production and marketing of poultry in a pilot project in two villages in the Bariadi district, Shinyanga region. The project involved adaptation of a commercial poultry-keeping model that has achieved tremendous results in many countries, including Bangladesh and Kenya. The outcome of the Bariadi model succeeded in substantially increased income of the producers. In addition the presence of about 60 percent women in the groups in pilot villages indicates the potential to create income opportunities for women. Overall, 600 percent increase in chicken production within one year of piloting was achieved. Growth and progress are visible in these poor communities, including improved and increased chicken production and sales around Baridi town and afar. One farmer, Christina Theo sold 75 chickens at 5000 to 7000 tshs each in one month, greatly boosting disposable income for her family and raising their quality of life. The we got mr Nicodemus Lyatinga for instance, who says that the demand is now exceeding supply of his local chickens, a situation faced by others in his community. The organization aims at improving local products consumption as well as commercializing the local poultry industry in the next two years. But we are focusing for all products produced by farmers, for example cotton market development in central of the country. The cotton sector has a huge potential to increase the income and employment of rural producers in the central corridor.
he country is currently gripped in Kilimo Kwanza Fever with both private sector and the government looking to the land and Agriculture to end the dire poverty gripping the masses who live in this bountiful resource rich country. Farming like any other business is a skilled and complex vocation which requires skills in agronomy, business planning and financial management. No matter whether you are eking a living out of the small 100 acre farm or you run a 5000 hectare agri-business outfit, the challenges are the same, just the scale is different . Perhaps the real issue here is that while we have large scale farms on this scale owned by experienced and skilled farmers, the vast majority of the new emerging class of “mechanized farmer” are in fact peasant class subsistence farmers who are evolving out of subsistence existence into commercial farming, whereby they intend to produce more than they need and will sell the surplus. But this will only be sustainable if that surplus is sold for a profit and the farmer gains from his investment and risk to expand. Typically we have ploughed, planted, weeded and harvested virtually single handedly using labour and hand tools since independence until now. In fact in the 1970’s we had 3 times more tractors than today which is a shocking but true fact. On the ground today we now have a new drive to issue the farmers with equipment financed by loans from our various institutions such as AITF, commercial banks, and more recently some agricultural window loans from a government owned bank. It seems these farmers appear to have chosen or been advised to buy only a tractor and plough and the lending banks have stood back and agreed to this on the noble principal that we are in a free market economy and the borrower knows his own business. Unfortunately both the borrowers and the lenders are new to this business and the learning curve needs to be shortened if we are to avoid failure and disillusionment. A tractor is in fact just the tool-carrier for a whole range of different tools necessary to mechanise; ploughing, seed bed preparation, planting, weeding and harvesting equipment. All are equally important tools to investment in if the tractor is to be utilized efficiently. The current spate of new start ups is typically a farmer equipped today with only a plough and tractor who has now got a 3 to 4 year debt to repay and the capacity to plough 150 acres a year. However having ploughed the land, has he planned how to find and pay for the labour, seeds, fertilizer and finally storage and transportation of this expanded area? Immediately we expand the cultivated area of land in Tanzania using tractors for ploughing, we correspondingly increase the labour cost of all the activities. I came across maize being hulled by hand in Kilimanjaro region at Tsh20,000 per 100kgs bag due to labour shortage and other competing activities happening at the same time. This is 200/= a kilo and maize is now being sold in the market for Tsh240 a kilo and falling . Mechanized cultivation and harvesting can bring the cost down to perhaps 120/= a kilo and the single biggest cost of maize hulling still largely done by family labour and hired labour can come down to 15 /= or even lower. I sell a maize sheller for about Tsh3.5m which is driven by the tractor and can hull 1000 kgs an hour of maize grain. It is driven off the tractor and costs the owner of the tractor perhaps Tah120,000 worth of fuel and labour to process 10,000 kgs in a day, that is 12/- a kilo versus up to Tsh200 a kilo by hand . Mechanical weeding and use of chemical herbicides and tractor driven sprayers also add huge cost savings to the production cost . A small and very approximate costing comparison is appended below to illustrate the cost benefit of mechanized versus hand. If the farmer with the tractor and plough has a loan of Tsh45m and he is producing at a loss how then will he repay his loans and provide an income to his family? When he defaults who will we blame? The farmer or the bank?
The Guardian KILIMO KWANZA
PRODUCTION COST
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A mere tractor loan can worsen a farmers’ situation It’s probably now very urgent for the planners, lenders and borrowers to put their heads together and decide what is the minimum package of equipment necessary to produce maize and rice competitively so that we can supply our domestic market, export our surplus profitably and raise our farmers’ standard of living to well above the present poverty line. My humble suggestion is that while farmers continue to buy tractors and ploughs through their SACCOS loans the SACCOS should itself invest in a pool of cultivation, planting, weeding, and harvesting equipment that is hired to the member so that he can utilize his tractor fully throughout the year without the excessive burden of financing the same. Banks that lend to finance a tractor and plough may get their money back if their client is a contractor providing ploughing services. If he’s just a farmer relying on hand labour then the cost of production will exceed the market price and the business will fold quickly. The table shows a very approximate scenario of capital outlay vs profit from a 100 acres maize venture using mechanized versus labour. Clearly then, banks who are restricting loans to the 100 acre farmer are in fact ensuring he can’t repay. There is no half way house on the road to mechanization. Commercial farming is a competitive business and anyone venturing to grow for profit must be advised accordingly
THE POTENTIAL FOR COST SHARING USING COMMUNITY MACHINERY POOLS AND CROP STORAGE FACILITIES It is a fact that for the next 25 years Tanzania Agriculture shall develop around the uplifting of the co- operative and Saccos movements . Perhaps 75% of our production shall rely on small farming communities working under the umbrella of co-operative societies and SACCOS. It is also a fact that we currently don’t have any infrastructure to support the farmers’ post harvest storage. Collateral management for warehouse receipts systems is being established but it is still in its infancy, bogged down with government controls and completely lacking in physical infrastructure . A 2,500 ton silo with cleaning, drying, fumigation, weighing and bagging facility can be installed today for a very modest sum probably not exceeding USD200,000. These are turnkey projects which can be managed by software systems which can be linked to the Saccos bank so that warehouse receipts management can all be managed at extremely competitive prices and at the same time be profitable to the operators. They do however have to be owned and managed by a private service provider who is paid a fee per ton for each service provided. The challenge here is to get government out of the business of managing crops and into the business of regulating and legislating. Legislation that bars middle men from buying crops from farmers and forces them to buy from the warehouse receipt manager would be a good start. Various claims about how much of the annual crop Tanzania looses annually to post harvest losses vary but they are definitely not less that 40%. Banks, Saccos groups and potential private sector service providers need to sit down and have a brainstorm on this one. Government participation will also be relevant if only to note what legislation is necessary to protect the investors in infrastructure and the farmers who grow the crops from middleman exploitation. Farming and crop storage needs strong government legislation and regulation so that private sector investment is promoted and protected and farmers are shielded from the middle men who currently control the farmers and in my opinion keep them submerged in debt and poverty. There is no rocket science here. All of the above suggestions and observations are tried and tested in emerging economies around the world where large populations eke out a living from small scale farming under coops and saving societies. There is an urgent need for a review of financing priorities, government legislation and focus on private sector participation to guide the KILIMO KWANZA green revolution to its rightful place in history. The contributor is a seasoned industrialist, farmer and machinery distributor in Tanzania.
The Guardian KILIMO KWANZA
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Tuesday 31 August, 2010
NEWS
Another farmers Bank to take off with 50bn/-
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By Angel Navuri or a long time since independence, farmers in Tanzania seemed to have been forgotten. Yet agriculture has always been referred to as the backbone of the economy. However, it now looks like there is a light at the end of the tunnel, thanks to the country’s Kilimo Kwanza initiative which prioritises agriculture. It is under this initiative that a farmers’ bank will soon be established. The first of its kind, the bank will enable farmers in the country to access loans without barriers. President Jakaya Kikwete broke the good news in Dodoma recently when closing the Nane Nane farmers’ fair, saying that the government has set aside 50bn/for establishment of the bank. “The main aim of starting a farmer’s bank is to make sure farmers are independent and can access loans more easily than is the case with other banks,” President Kikwete said. The President said that since the government has decided to focus on agriculture, a farmer’s bank should be started as a way to boost their income. He said farmers will be motivated in producing more to sell and depositing their earnings to the bank for their own benefit. According to him, the farmers’ bank will be different from the agricultural bank that is currently under the Tanzania Investment Bank. It is the farmers themselves that will be in charge of their bank. The farming public is yet to be given details about this proposed bank, in regard to matters like its shareholding, which agencies will spearhead its creation in the way TIB is doing for the Agriculture Bank, and which proportions the government’s sh50bn will be shared between loanable deposit and for structural set up. On his part, the Tanganyika Farmers Association (TFA) Chairman, Elias Mshiu By Salma Said INADEQUATE meat processing facilities in the country are denying livestock farmers the full benefits from their trade, the herdsmen have complained. “Most of the livestock keepers in the country are small farmers with a large number of livestock. Unfortunately they earn very little because of limited processing facilities,” recently said Mr Jeremiah Temu, an official at the Pugu livestock market in Dar es Salaam. He was addressing a team of journalists who were probing agricultural marketing policies. In spite of Tanzania’s huge livestock sector and the government’s stated commitment to develop the industry, the country is still lagging behind in processing and
said they have all along advocated for a farmers bank with full support from the government. Adding that the recent liberalization of state bank and their subsequent profit motivation has left farmers terribly exposed. Mshiu explained that never before has
there been a more apt time for a farmers’ bank and urged all relevant organs to rise “to the great moment of our time.” He noted that the government should understand that agriculture is the backbone and leading sector of the economy. The sector is vital to the country’s economy
Meat processing hampering livestock sector by-product industries like tannery. Noting that Tanzania’s animals are basically fed on natural vegetable material, the official dared call locally produced meat “organic”, saying that the meat is tasty. Although he could not reveal the government’s strategy to improve the livestock market, Mr. Temu said that skin and meat processing industries would increase the value chain for farmers.
Similar concerns about shortage of reliable customers, lack of loans and tax discrepancy in the livestock business were raised by traders interviewed at the market. One Mr Fadhil Maige took issue with inconsistency in taxation, saying “In Ilala municipality of Dar es Salaam the livestock trading tax is 1,250/= per day, while in Kinondoni we pay 1,500/=. The authorities should reduce the tax.” Maige also complained of discrimina-
and the reduction and eradication of poverty. “Apart from providing food, agriculture remains the country’s main source of income for the rural population which forms 80 percent of the total population and employs 70 percent of the active labour force. It contributes about 50 percent of the GDP and 75 percent of foreign exchange earnings,” he noted Mshiu said TFA is proud to have been actively engaged in the advancement of the agricultural sector in Tanzania for three quarters of the century. Our services have extended to the whole spectrum of the sector, from providing small- holders with hand hoes to finding markets for products from large commercial farmers,” he noted. According to Mshiu, the agricultural sector has not received the attention it deserves. It is neglected and unexploited. He said agricultural exports are yet to attain satisfactory levels and that productivity is still very low. Moreover, the business climate in Tanzania is constrained by several factors and this affects investment in the sector. The Minister for Agriculture, Food Security and Cooperatives Steven Wassira said that the farmers’ bank is to give way for farmers to tackle agriculture as an investment that will transform their lives. He said it was high time farmers practiced agro-business which has seen many developed countries eradicate poverty since they treat it as a tool of boosting the economy. Wassira said this year’s Nane Nane theme; Green Revolution and Food Security explained that the main aim of increasing more agricultural extension officers is to make sure that farmers access information accordingly. He said agricultural inputs have increased by 112 percent so that farmers would be able to get all the agricultural inputs needed as a way to increased production. Wassira said the Nane Nane theme motivated farmers and other stakeholders to participate in agricultural investment, including the private sector.
tion, bureaucracy and suspected corruption in approving of loans to small scale livestock farmers. The trader called on the government to assist in promoting the livestock industry. On her part, the Pugu Livestock Market Manager, Ms. Agnes Maiga said that the market receives an average of 400 – 500 heads of cattle from the main livestock producing regions of Shinyanga, Dodoma, Tabora, Singida, and Mwanza. The market also receives sheep and goats and has a holding capacity of 3,000 sheep and goats. In efforts to improve the market, her management is planning to strengthen the livestock information system for traders to compare different market prices and to educate traders on livestock trading so that they can attract more foreign customers.
Mtwara power tillers become decorations
By Abdallah Bakari, AS FARMERS cerebrate one year of implementation of kilimo kwanza, it has been established that 81 power-tillers out of 185 purchased by Mtwara District Council have not been given to farmers, instead are used in the “show yards” in District Council offices. The survey made recently by this reporter at Masasi, Nanyumbu, Mtwara and Newala Districts here in Mtwara region has established the facts that Tandahimba district council is leading in holding more power-tillers of which 38 out of 50 are in hold. The District Executive Director, Mr. Abdallah Njovu said only 12 power-tillers have been submitted to the farmers, however, the intention was to submit all 50 machines after the payment of 20 percent of the price by farmers’ groups or hamlets. Newala District Council which purchased 50 power-tillers, only 30 have been taken by farmers while 20 remain on Council’s yard, while Masasi District Council holds 11 out of 21 power-tillers, and Nanyumbu has nine out of 21 purchased power-tillers. Also, the survey established that Mtwara-Mikindani Municipality purchased only six power-tillers, in which only three have been taken by farmers and Mtwara Council which purchased 37 has succeeded to supply all power-tillers to their farmers.
The Mtwara District Executive Director, Mr. Mohamed Ngwalima said only effort enabled they to succeed the matter was to educate the farmers on the importance of using power-tillers on cultivating the land. “We purchased these power-tillers as the implementation of the order given by Prime Minister, Mizengo Pinda, the aim was to make revolution on the use of mechanization, but farmers do not respond accordingly ... they suppose to contribute 20 percent of the price which was about 1.5 million” said Mr. Adoh Mapunda Nanyumbu’s District Executive Director. Mtwara Mikindani Municipality Executive Director, Mr. Sabin Silima said, farmers had poor response on taking power-tillers, however sensitized efforts were made. “New idea was the District Councils not to purchase power-tillers before an demand application from farmers who combined into a group or hamlet … the money used to purchase these power-tiller which are now here could be used to other areas” said Silima Some farmers said their poor response was caused by extremely poverty among farmers and asked Councils to provide them as loans. “When you introduce new issue to some one you should be able to incur opportunity costs …, we, as farmers, need power-tillers but we don’t have money to contribute”, said Aman Ismail, a farmer at Tandahimba District
Farmers affected by poor grain storage at market By Angel Navuri INADEQUATE storage facilities at one of the major grain markets in the country have contributed to huge losses by farmers, especially during the rainy season. The situation is indicative of the woes faced by farmers across the country. Speaking to Kilimo Kwanza recently, the Chairperson of the Management Committee of Tandale Market in Dar es Salaam, Sultan Kiyumbo cited poor infrastructure, no water supply and shortage the space as other challenges faced by users of the market. ”This market is in urgent need of improvements because the number of farmers and buyers using it has increased tremendously,” he said. Elaborating, the chairperson said that the inadequate storage contributes to huge losses suffered by grain sellers during the rainy season. The market charges 20 shillings per kilogram of rice and beans and five (5
)shillings per kilogram for maize delivered at the market. However the market is not responsible for any losses arising from destruction, decay or deterioration of produce delivered and stored at the market. “Users of the market should follow up such issues with their brokers,’ he added. The brokers are responsible for reimbursing the farmers for any damage to the produce stored at the facility. Before transporting their produce to the market, farmers usually first check existing market prices from brokers operating there. The farmers also remain in constant communication with their selected brokers via mobile phone to confirm the sales status of their produce. A broker and the Treasurer of Tandale Market and Grain sellers Association and Investment, Sadik Kubiga confirmed that losses are common especially in rainy season. He also commented that competition is high at the market and that farmers cannot expect to sell produce on the same day it is delivered. “Sakes depend on the buyer’s
price so many farmers leave their produce with us,” he said. Confirming that poor storage facilities as a main hurdle, farmer Sadik Omar said that many grain farmers in the country depend on the market but storage remains their biggest problem to date. He also cited poor profit margins resulting from price fixing by buyers as another major hindrance for farmers hoping to reap gains from the grain trade. “Transportation cost me TSH 6,500 per bag. To make a profit I should sell my grain at TSH 1,200 per kilo. However I am now forced to sell it at TSH 900 per kilo which is not profitable,” he lamented. Commenting on the East African (EAC) common market, the farmer said that there is no way for local farmers to participate and gain from the common market because the government has banned selling of grain to neighbouring countries. Tandale is an open market that emerged in 1976 and was later re-organized into a whole sale market by the government in 1986. The facility receives different kinds
of produce from all over the country. With time it has evolved into a major wholesale grain market in the city. A few months back, the Minister of Agriculture, Food Security and Cooperatives, Hon. Steven Wassira (pictured) termed successful co-operative societies as a savior for farmers. “They evade the onslaught of unscrupulous middlemen and other high-profile crop thieves and go for reliable crop markets,” he is quoted saying. According to the minister a lot of grain produce in Tanzania is wasted in the fields and much of the harvested crop is sold at throw-away prices to middlemen. But some Members of Parliament (MP’s) contended that there was no point in storing farmers' produce, reasoning instead that farmers need to sell their produce in cash and spend the money on other essentials like fertilizer, food, school fees and items of clothing. Agriculture is of vital importance to Tanzania given that about 30 per cent of the GDP, 30 per cent of the total exports
and about 80 per cent of labour force comes from this sector. However, significant improvement in agricultural productivity has not been observed due to the rain-fed agriculture. The economy is dependent on agriculture which accounts for about 40 per cent of GDP and 80 per cent of the country’s labour force works in the sector. As a result performance of the sector affects other economic indicators. For example the inflation rate was held firmly at below five per cent especially between 2002 and 2006. Unfortunately, food prices became unstable driving inflation rates to 7.3 per cent in 2006 and to 7.0 per cent in 2007. In 2008, the global financial crisis sent food and oil prices galloping taking the inflation rate to 10.3 per cent. Tanzania remains among the poorest countries in the world with a per capita income of US$400 (2007). Despite substantial improvement of macro-economic indicators such as foreign exchange reserves, poverty reduction remain a challenge in the country.