Towards the end of last year, ANSAF commissioned a grand study to explore critical questions in the agricultural inputs sector. The study covered 20 districts in 10 regions of Tanzania Mainland, with a total of 569 sampled farmers and 32 sampled agro-input stockists. The study titled “Effective regulation for equitable delivery of inputs (quality seeds, fertilizers and pesticides) to smallholder farmers in Tanzania” was conducted by Mzumbe University. The findings show that the seed sub-sector in Tanzania is dominated by informal seed markets, which constitutes 90% of the sector, with the formal sector covering only 10%.
The formal seed market is dominated by the private sector, which accounts for 80% of seed. Low capacity to process foundation seed, the long period taken to certify and release new seeds and high prices of improved seeds are amongst the reasons for the small formal market. There are few seed companies active in either producing or importing seeds; the top seed companies are SeedCo Ltd, Sub-Agro, Pannar Seed, Kibo Seed Ltd, Highland Seed and Monsanto. This reduces competition in the market and may be contributing to high seed prices.
Official estimates of demand for improved seed of 60,000 tons is far below the potential demand estimated at over 212,000 tons, when considering the estimated acreages under different crops. If constraints such as credit, farmers’ awareness of yield potential of improved seeds, recycling of seeds (savings from previous harvest) are addressed, the demand and use of improved seeds can be enhanced. Import continues to play a big role in the supply of seed, and in 2014/15 accounted for almost 50% of maize seed availability. The extent of availability of improved seeds in the market varies across crops. The private seed sector has concentrated mainly one crop, maize-the major food crop. Production of breeder seeds is constrained by inadequate funding to research institutes. Despite the introduction of QDS production system aimed at availing improved seeds to the smallholder farmers’ at affordable prices, not many farmers have adopted use of QDS in crop production in the country. For about 40% of the sampled farmers in the study area, the major source of seeds was stockists/agro dealers, mostly located in the wards or nearest townships, reflecting a moderate access and low transaction cost.
The seed sub-sector regulatory framework in Tanzania is guided by the National Agriculture Policy of 2013 and three main Acts – The Seed Act of 2003 and its Regulations, 2011; and Plant Protection Act, 1997 and its Regulations of 1998, and Plant Breeders Act of 2012 and its Regulations of 2008; which provide for registration and certification and approvals of all seeds produced and imported in Tanzania before use. Both the private and public seed suppliers are regulated by the government through three main institutions whose mandates are contained in the legal instruments; the National Seed Committee, NSC (and advisory Committee of the Ministry of Agriculture, Livestock and Fisheries); The Agricultural Seed Agency (ASA) – mandated to produce, process and market seed; and also produce all foundation seeds for varieties breed from the public institutions; and Tanzania Official Seed Certification Institute (TOSCI), mandated to test and certify seed before entering the market; Tanzania Seed Trade Association (TASTA), which represents the interest of stakeholders in the seed sector.
While the Seed regulation provides for up to three years minimum requirement for field trials (DUS and NPT tests) which have repercussions not just on costs, but delays in variety release, it is possible to conduct these tests concurrently and hence reduce time and costs. The government institutions (ASA and TOSCI) have inadequate resources and capacity (human and infrastructure) to delivery their seed registration, testing, and certification mandates effectively. The regulatory framework does not establish a clear link between farmers, extension officers, seed dealers/suppliers in relation to diffusion of know-how information from top layers to farmers. Most of the information used in labeling seed packages, as required by law, is too technical compared to the normal knowledge and capacity of ordinary farmers. Despite the legal requirement for seed registration, testing and certification, counterfeit seed is reported to be more than 40%. More than 85% of private companies recently interviewed acknowledge counterfeit to be significant and a threat to their business performance and brand. More than three quarters of farmers interviewed have not been trained on the aspects of fake seeds and quality seeds and are therefore at risk. It is the opinion of some companies that the penalty provided for counterfeiting is too small, providing an incentive to illegal dealers to engage in counterfeiting. Stakeholders’ awareness of their legal rights is very limited and legal and regulatory processes are not well understood or accessible among small holder farmers across inputs value chains at large.
For the fertilizer sub-sector, the official annual demand for fertilizer for 2016/17 was estimated at 484,000 tons by the Ministry of Agriculture. This is considered to be far less of the potential demand, estimated at 885,000 tons given the national acreages under different crops and the recommended application rate of 50 kgs per hectare. Use of fertilizer in Tanzania is very low. at average of 9kg per ha (compared to an average world use of 122 kg per ha and average sub-Saharan countries use of 10.5 kg per ha), and is mainly attributed to high price levels for the imported fertilizer; little awareness on the part of smallholder farmers on the yield potential and land protection from appropriate use of fertilizer; but recently and for crops in specific areas; the increased demand for organic products / food. The market is dominated by imports which accounts for almost 90% of the fertilizer supplied, dominant being UREA, DAP/TSP and CAN. DAP accounts for 90% of phosphate fertilizers imported, but only 8.5% of total fertilizers imported in Tanzania. Only ten of the 62 registered importing companies are active in the market. Of the ten, three companies namely Yara Tanzania, Export Trading Group (ETG) and Premium Agro Chem Ltd account for 80 per cent of the imports, with the rest of companies accounting for the remaining 20%.
The dominance by a few companies reduces the level of competition and may contribute to high price levels. Minjingu Rock Phosphate Ltd is the main local producer and supplier of fertilizer. While Minjingu has a capacity of producing up to 150,000 tons per year , the factory currently supplies to the market between 20,000 and 30,000 tons per year due to limited domestic market. The limited market is on the one hand a result of farmers’ unawareness of Minjingu Phosphorous Rock as good and cheap source of phosphate fertilizer. Findings from the sampled farmers indicated that UREA was the mostly applied fertilizer by 41% of the smallholders in 2015/16. The application varied across crops; highest for maize at 31% and lowest for cotton at 17%. About 54% of the farmers reported to have purchased their fertilizers from stokists / dealers (39.7%) and cooperatives (14.1%). The regulatory framework indicates that the private companies are regulated by the Government through the Fertilizer Act of Tanzania, 2009 and its Regulations of 2011, together with supplemental Regulations of 2017 on bulk procurement, which provides for registration, testing, production and acquisition of importation of fertilizer and or fertilizer supplements; and the Act provides for establishment of the Tanzania Fertilizer Regulatory Agency (TFRA), which is mandated to register and test all fertilizer produced or imported into the country before use. Other institutions mandated to undertake other processes in the registration chain are: Tanzania Atomic Energy Council (TAEC) for radiation tests; Tanzania Weights and Measures (certifying weighing standard); Tanzania Bureau of Standards (TBS) – enforcement of fertilizer standards.
Observed concerns include the cost of registering and ultimately obtaining license in fertilizer and fertilizer supplement business, and especially for new product, as provided for in the legal instruments, is relatively high. This is on account of the cost of field tests and the minimum number of three seasons the trials has to be conducted, estimated at USD 10,000 per trial for new fertilizer type. Despite the elaborate regulatory requirement, there are fake fertilizers in the market. About 70% of the farmers sampled in the study were not conversant with criteria to be used to assess the quality of fertilizer and its genuineness. It is thought that the penalties imposed on the violation of Fertilizer Regulations, including counterfeiting is very lenient, at not less than Tsh 5 million and not more than Tsh 10 million, and imprisonment of not less than six months and exceeding three years, or both, compared to the profits such dealers make and losses that the many users may experience.
Dealing with five separate institutions (TFRA, TAEC, NEMC, TBS, W&M) in the registration process is considered cumbersome and needlessly increase the transaction costs of doing business. Fertilizer Regulations provides for cancellation or suspension of registration if a person running a fertilizer business is not sufficiently familiar with the provision of the Fertilizer Act and its Regulations. Going through the Act and Regulations indicate that information required to internalize by fertilizer dealers is very technical. Such information has to be understood by front desk sellers of fertilizers in order to provide accurate information to the users regarding the products, its use and performance. Qualitative information obtained from the field indicate that many fertilizer dealers / agents are not very conversant with the products they deal with, as required by law. This has a number of implications. First is that such dealers are not able to provide appropriate extension to users when in need of purchasing fertilizers. The impact of this is that users may end up buying the wrong product, leading to non-performance and even adverse effect. The net effect is to lose trust on the use of fertilizer and hence low fertilizer use across the country. The second effect is that fertilizer dealers may not be able to conduct their business successfully, if there is low customer turnout.
Only 47% of the sampled farmers in the survey reported to have applied fertilizer timely, the reason being late delivery.
Market outlook for the pesticides sub-sector is that Tanzania has put in place an integrated pest management plan (IPMP) to ensure responsible use of pesticides and effective management of potential pest occurrences. Practices that prevent pests both at pre and post harvest periods are recommended to minimize use of pests. In Karagwe District, for example, pesticide use is very low because of perceptions amongst growers, that pesticides are unfit for human health and coffee’s flavor. Buyers do prefer the organic coffee and hence small holder farmers are restricted to use any kind of agrochemicals. Almost 100% of pesticides are imported. Trade data shows that imports of pesticides have increase from around 10,000 to 22,000 tons, between 2011 and 2015, almost doubling.
Dominant amongst the pesticides imported are herbicides, insecticides and fungicide. Importation of rodenticides has also increased recently, rising from an average of around 800 tons per annum between 2011 and 2014, to more than 6300 tons in 2015. About 30% of the respondents in the sampled smallholder farmers indicated that they source pesticides form stockiest/dealers/ginneries. The reasons for is mainly accessibility and subsidized pesticides sold by stockiest. About 70% of the respondents reported to source the pesticides from neighbors and cooperatives
The application of pesticides in cash crops are relatively high, (for cotton at almost 30% and 26.2% for coffee) compared to food crops (maize and rice) where the use was around 22% for each one.
The regulatory framework for registration and certification of pesticides are governed by the Plant Protection Act, No. 13 of 1997, and the Plant Protection Regulations of 1998. The Act has provisions for safe handling and use of pesticides (URT, 1997).
8 The Act empowers to the Minister to put in place a Code of Conduct for the proper use of plant protection substances as well as register all pesticides in the country. In this provision, the Minister, in accordance with the power bestowed by Section 32 of the Plant Protection Act 1997, has appointed Tanzania Pesticides Research Institute (TPRI) as a capable, credible and competent institute to undertake the role of regulator.
9 TPRI was established by Section 18 of the TPRI Act of 1979. The major functions that TPRI has been given by the Minister include pesticides monitoring, pesticides research with respect to Plant Protection Act, Registrar of pesticides and Pesticides analysis.
10 The Act requires that all registered plant protection substance distributed or offered for sale must bear on the container, in understandable Kiswahili and English, a distinguishing name, a true descriptions of its active ingredient in relation to its net weight or volume, a list of crops that it has to be applied to, a description of precaution to be taken on its use, instruction on the disposal of used plant protection substance container and information on disposal of spills, the registration number, the name and address of the holder of registration certificate, or the provisional clearance, the formulation and the use before date (date of expiry) and the name of the registration
11 National Environmental Management Act, No. 20 of 2004 which has a comprehensive mandate on environment protection, is also responsible for monitoring appropriate agro-chemicals use, especially provisions that regulate Persistent Organic Pollutants (POPs).
12 Fully and provisionally registered products may be imported, sold and used by the general public. RESTRICTED products are sold in special pesticides shops for specific purposes, and can only be handled by well trained personnel.
13 The Act provides for heavy penalty of a fine not less than two million but not exceeding 10 million shillings, or three years imprisonment or both for a persons who violates the packaging procedures
14 Lack of the semi-autonomous pesticides regulatory body which may oversee all the regulatory issues of pesticides in the country. At the moment TPRI has been given the task of monitoring and regulating the pesticides in the country on behalf of the ministry despite its major function of Research on Pesticides.
15 Registering a new plant protection substance is relatively long and rather expensive. The Regulations require that the trial be conducted for at least three seasons. At the minimum this would cost USD 6,000 and take three years before a substance is registered.
16 Despite the well crafted Act and Regulation, including penalties the existence of counterfeit plant protection substance of around 40%.
17 More than a quarter of the sampled smallholder farmers during the study admitted not to know the criteria for assessing quality of fertilizer hence at a risk of being sold fake or wrong pesticides.
18 Some respondents have reported to experience pesticides low quality and performing pesticides, regardless of whether a particular pesticide was new or was approaching to expiry date
19 Smallholder farmers are not well informed on what measures to take once fake pesticides is sold to them;
20 About 45% of the sampled smallholder farmers in the study reported not to have taken any legal action while only 10% said the fake suppliers were caught responsible. The rest 10% percent of the respondents reported to switch to other suppliers for new pesticides after incurring losses. About 25% of the respondents returned fake pesticides and sought for compensation but most without success
• Expand seed development programme to other lead food and cash crops
• Continuous Sensitization of farmers about QDS, with its demonstrated performance so that farmers may adopt the same.
• Where credit is constraint to QDS adoption, this challenge may need to be address, for example through contract farming arrangement, where this is feasible
• Create enabling environment for competitiveness in the market through removal of entry barrier e.g. high registration fee;
• Training of all actors along the value chain regarding the quality control mechanism; detection of fake seed;
• Support research programmes for breeder seed development through adequate budgetary allocation by government, through the Ministry of Agriculture, Livestock and Fisheries;
• Review Relevant regulation: Increase the penalty for violation of the seed regulations, to increase the risk of potential counterfeit agents;
• Review the relevant regulations; consider the possibility of running some of the tests (DUS and NPT) currently to reduce time.
• Involvement of all stakeholders in the seed chains; development of smart but cheaper technology (e.g. Coin Scratching) for detecting genuine packed seed;
• Continuous training of farmers on how to detect fake seeds;
• Promote use Minjingu Phosphorous Rock fertilizer; upscale research on suitable areas;
• Improvement Regulatory environment; remove barriers to entry through review of fees and time for testing;
• Train fertilizer dealers on fertilizer characteristics and how to offer extension information on fertilizer use
• Making it mandatory for dealers to attend a certain minimum level of training;
• Review the penalties as one of the deterrent measures.
• Review Cost structure along the chain; especially transport and other handling charges at the port and in the warehouses;
• Mainstream IPMP at all levels to minimize usage of pesticides; Minimize usage of pesticides on food crops to maintain food health standard;
• Review Act and make provision for establishment of Pest Control Board under its own act, which will be responsible for registration of pesticides and regulations.
• TPRI to concentrate on research and policy advice;
• Aim at developing feasible smart labeling technology for detecting genuine (fake seeds);
• Train all stakeholders on the implementation of the Technology;
• Due diligence by companies on storage of packaging materials
• Reduce the time and cost of registering and testing pesticides before making it available to the consumers.