1. The Report – An Executive Summary
- Introduction, Background and Objectives
The Policy Action Group convened a policy conference under a theme titled Assessing the changing landscape of Tanzania’s agriculture. The event was be held from the 2nd to the 4th December 2014 at the Serena Hotel, Dar es Salaam.
The 2014 Agricultural Policy Conference aimed at deepening the understanding among policy makers on three overarching issues:
- The need for more evidence based policy making for sustainable and inclusive growth.
- Addressing challenges of gas and oil discoveries. While the gas sector offers diversification opportunity and acceleration of economic growth, the agricultural sector remains the major employer and the realistic vehicle for poverty reduction.
- The need for a greater youth engagement in agriculture and that agriculture has the greatest potential to generate the much-needed jobs for youth.
The workshop enrolled 133, 104 and 109 participants in days 1, 2 and 3 respectively. They came from public and private sectors, development industry, academia and from research institutions, projects and programs.
Key themes, papers presented, a summary of deliberations and conclusions are as follows.
- SESSION 1: Youth Motivational Videos: Youth in agriculture
Three videos about successful youths enterprises were presented. These covered investments in exporting fresh vegetable, leather processing and honey. The youth entrepreneurs further outlined their investments, entrepreneurial histories and made revelations regarding their successes. The deliberations, however centered on two major key issues: (i) Challenges that youth face when attempting to engage in Agriculture and (ii) Proposals on the way forward with the aim of enticing even more youths to get involved in agribusiness.
Generally it was observed that it is possible for youths to engage in agriculture if an enabling policy and business environment is created. The conclusions of the session were:
- Capital in agro-enterprises, besides financial injection, (which is inevitable) also entail a well-thought and executed business innovation as key to profitability.
- The trade regime as a whole, and its policies and strategies, must demonstrate the value that the nation places on what is produced locally versus what is imported.
- Building the capacity of the youth for them to engage in agriculture and agro-processing should be a continuous process. Youths gain more knowledge and skills from learning visits. There is therefore a need to encourage youths to visit other youths who have been successful in the sector.
- The government should support youths’ agribusiness initiatives by creating a well-thought, participatorily arrived at, enabling policy environment.
- SESSION II: Changing Landscape of Tanzania’s Agriculture
This session had two key thematic presentations: (i) The Changing Landscape of Tanzania’s Agriculture – National and Regional perspectives. This paper gave an overview of national and continental agricultural development policy initiatives and how they relate to Tanzanian Agriculture sector. (ii) The implications of Oil and Gas for agriculture competitiveness. It outlined not only the potential negative implications e.g. the ‘Dutch disease’, but also policy options to mitigation the negatives.
The discussion was insightful. Key issues that ought to be brought up in research and policy analysis and design include: the irony in that the country is a net importer of food while at the same time 80 percent of the population is employed in agriculture; the differing and diversity of productivity and growth across geographical areas within the country, sub-sector and commodities; inspired by the 10% Maputo declaration on budgetary allocation – the increasing trend should be reviewed in terms of what does that budget end up doing, how deep and close to farmer services does the budget reach. With regard to oil and gas crucial would be the articulation and management of the changing government revenue and expenditure patterns, with an eye on emerging implications for investments, incentive and disincentives posed to agriculture.
- SESSION III: Agricultural Productivity
This session had three presentations: (i) The impact of The National Input voucher system. (ii) The determinants of SHF profitability of fertilizer use in maize and the effect of the NAIVS. (iii) The seed industry in Tanzania; is there potential growth? The presentations managed to trigger useful discussions by panelists and the plenary.
Agro-inputs (including seed) distribution system are still weak. There is a need to strengthen the capacity of agro-dealers and introduce ICT models that would make the business, and seed supply specifically, more efficient and improve coordination between ASA and seed companies. In line with the above there is a need to review existing policies with a purpose of allowing the private sector to be more involved in the inputs industry, including the one on seed. There was an emphasis on training on one hand and making inputs (seed, chemicals, and fertilizer) more available to SHF on the other. The two have to go together for effective use of inputs. Agricultural input subsidy appealed to participants, convincing that it is required. It has worked well in other countries with remarkable positive effects on productivity. However, vexing questions vexing questions arose including: Which segment(s) of the commodity value chain truly needs subsidies? For how long would the government be ready and able to subsidize? Lessons such as that from Sasakawa Global 2000 whereby farmers increased productivity of maize from about 5 bags per acre to 30 bags per acre but productivity was not sustainable due to market uncertainties ought to inform policy decisions. The analysis of NAIVS left a lot to be desired. The broader picture of challenges wasn’t all clear, including a feel of inadequate data and potential corruption in the system. It was clear that inputs studies, and especially the one on seed, would have benefitted and be enriched by drawing from regional studies and lessons. For example, infrastructure and rural energy are critical. They have been observed to influence inputs use in the region parallel with, and augmenting, inputs subsidy.
- SESSION IV: Fiscal Policy (1) – Public Expenditure
Two papers were presented during this session: (i) Strengthening of Mutual Accountability through Agriculture Joint Sector Reviews (ii) Public Expenditure Review – The MAFAP approach.
The presentations were viewed to be very important in the context of the theme of the conference. Participants acknowledged that agriculture public investment analysis is a tough exercise and the team was thus congratulated.
The general feel with regard to budgets and tracking expenditures were centered on some areas of ambiguity. For example, it wasn’t clear whether the differences in government expenditure records in and for agriculture could be explained by the expenditures made by MIT on market access – such as the expenditure on the warehousing which was also managed by MIT. In the same vein, another example illustrates the ambiguity: How is CAADP public expenditure in agriculture defined – is it in a narrow perspective or is it based on a widened definition? Issues of broader than public expenditure on agriculture also arose. For example, in the interest of a true joint sector review, it was thought that non-public expenditure in support of the agriculture sector should also be captured. For example investments made by the private sector, non-state organizations, PPP and those through donor funded projects. A consensus seemed to be that such investments should be considered, compared, and evaluated vis-a-vis government sector development objectives and funding. Furthermore, participants were mindful that important is not only the volume of expenditure, but also the effectiveness of public expenditure e.g. in road construction and extension services, and they questioned the same. Both have, elsewhere, been observed to be less efficient in yielding results, or more costly per unit of infrastructure developed, in Tanzania than in comparable countries – even in the region. There may be merit on this observation. Because, if the government is reaching the aggregate 10% expenditure in agriculture, why then are we not reaching the 6% growth for the agriculture sector?
Furthermore emphasis was made in that investment in rural infrastructure (roads) is among the most important public expenditure for market access together with market information. Finally a suggestion was also made on the need to track expenditure spatially; mapping expenditure in relation to population and especially tracking the poor population.
- SESSION V: Fiscal Policy (2) – Taxation
The plenary had an opportunity to listen to three presentations on the theme: (i) Analysis of produce CESS in Tanzania: Policy options for fiscal reforms. (ii) The proposed 2014 VAT Bill: Implications for agriculture. (iii) In Quest for Inclusive Growth: Exploring the Nexus between Economic Growth, Employment, and Poverty in Tanzania.
Several issues emerged during the discussion. One cutting across was multiplicity of taxes and taxing bodies. While acknowledging that it is difficult to imagine alternative sources of revenue if certain taxes are abandoned, a serious proposition was made regarding replacing the multiple, disaggregated regulatory bodies (one dimension is that between Central government and Local government authorities LGAs) into a single agricultural sector regulatory authority that would, amongst others, administer taxation. Besides the multiplicity and levels of taxes charged on agricultural produce, the plenary was also concerned regarding tax exemptions intended to provide incentives to agricultural investors. Participants questioned how tax exemptions are administered and whether the resulting tax reliefs truly benefit the targeted groups, i.e. farmers and agro-processors, and not simply other opportunistic business entities and individuals along the value chains.
In response to the proposed new vat and the list of items exempted, participants felt that the law has focused much on the lower part of the value chain – production; and to some extent it is overly biased on horticulture. What about post-harvest, agri-processing and food processing inputs in general? If truly agriculture is to be commercialized, up the value chain nodes ought to be encouraged through several mechanisms including such targeted tax incentives.
Much was discussed regarding the LGA’s charged cess. For example, cess is charged per unit of value, in this way it is a disincentive to producers who produce quality commodity and fetch premium price. It’s thus advised that cess should be charged per unit of volume e.g. tsh/ton or per kg. It should also be reduced to the level of industrial cess i.e. 0.2%. Most important, however, was that the recommendations made by the paper to offer alternatives to cess, needed to be further quantified and generate more insightful consequences of the revisions. For example, if the cess rate was to be reduced to 2% or 1% for food crops what would be the revenue forgone? Advocacy for tax revisions normally go down well when consequences of the revisions, and the alternatives for the ‘tax man’, are clearly illustrated.
- SESSION VI: Inclusive Growth: Youth, Access to Resources, ICT and Non Farming Value Chains
Papers with the following titles were presented during session VI.
(i) Farmers’ access to financial services in emerging urban markets (ii) Promoting Inclusive growth by engaging youth in Agriculture value chains. The case of Tanzania Graduate Farmers Association (iii) Inclusive Growth: Youth, Agribusiness and ICT – what policies can work? (iv) Meat value chain: experience and policy challenges (v) Dairy Value chain – policy challenges.
The paper on inclusive growth drew the attention of participants and made them focus on ‘data’. The concern was that poverty is declining at a low pace despite a lot of efforts by government, private sector and civil society organizations. Statistics indicate that in 21 years (1991 – 2012), poverty dropped by 10.4% (from 38.6 – 28.2%) by simple arithmetic and other factors remaining constant, Tanzania would therefore need 58 years to reduce poverty to 10% and 78 years to eliminate poverty.
As a result the plenary was of the view that the ‘policy aims’ should be to ensure ‘growth with full employment and productive livelihoods for all’. As such, agriculture transformation should see resources being provided to enable small families producers (a large % of whom are women) transform themselves into more productive producers. Relatively large scale mechanized agriculture enterprises shouldn’t expel small farmers from their land. They ought to be an agent for ‘inclusive growth’ and engage SHF in contract and out grower farming. This apparently conforms with the philosophy and practice of the SAGCOT initiative. There is therefore an obvious need to change the traditional way of farming and make it modern. This will not only attract youths to engage but will also link SHF with agro-processors, and also make it easy to access capital from banks. It was also the opinion of the plenary that increasing productivity may increase income, but only if the marketing constraints are resolved.
The engagement of youths in agriculture should be a high priority for all stakeholders in the sector. Heterogeneity within youths, across regions and even within the same region should be considered when designing support services. This heterogeneity should be unpacked in order to come-up with workable solutions for the various challenges that youth currently experience.
The fast growth of urban population presents a tremendous demand for commodity value addition especially in Emerging Urban Centers. This is an opportunity for smallholder farmers particularly youths. There is therefore a need for further research on rural – urban linkages, and on how policy interventions can raise the effectiveness of such linkages towards wealth creation and improving the wellbeing of the rural population in line with agriculture modernization and the engagement of youths.
Emerging Urban Centers (EUC) can help youths to engage in the agriculture sector not only as farmers but also as service providers in commodity value chains e.g. become artisans. Other issues could also be brought on board like training on health to protect youths from diseases or from engaging in drugs abuses, and in business planning for better access to finance. VETA and other forms of tertiary education centers have a good opportunity in this area.
Growth in Tanzania has to be truly inclusive, even in the agriculture development efforts, Tanzania seem to be biased towards crop production, oblivious of the potential in the livestock sector. There are good reasons to create policy incentives that would direct investment in the livestock industry. For example, in 2006[? Could be 2011], TAFSIP identified policy weaknesses in promoting livestock trade. Resolving the same would have facilitated infrastructure and services especially in rural areas to contend with poor feeder roads, limited livestock haulage as well as holding facilities. The meat and dairy value chains have great potential to create employment especially for youths. Livestock development, like crops, will also need transformation and modernization. The current production system doesn’t generate wealth nor does it help in food security. The regions that have many cattle also have high rates of anemia and, malnourishment including anemia, contributes to low productivity.
Lastly the plenary felt that climate change, urban planning in competition with formally agro / crops land (e.g. Arusha sub-urban), ICT pull factors for it to contribute to agriculture, cheap imports of dairy and meat products (e.g. those from Kenya to Arusha) and the competition it poses against local production, high interest rates charged by commercial lenders, dilapidated livestock marketing infrastructure are all key to growth but were not discussed adequately for concrete recommendations to come out of the conference, but they are all significant for promoting agricultural productivity and promoting commercialisation.
- SESSION VII: Agricultural Markets, Trade and Public Sector Investments
The agricultural marketing session had three papers, as follows:
(i) Drivers of maize prices in Tanzania. This study, and the paper, quantified the domestic and external drivers of Tanzanian maize prices using an econometric error correction model to determine the price relationship between 18 markets in Tanzania’s and regional and global prices. (ii) Price incentives and disincentives to farmers – A case of cashew nut value chain in Tanzania. (iii) Measurement of regional food basket costs in Tanzania.
The discussion was rich and the following were the key messages. Overall the plenary felt that the agricultural marketing system is weak. There is inadequate market information; inadequate standards and limited capacity of farmers to adhere to the standards; there are policy uncertainties e.g. unpredictable imports of sugar, rice and edible oil. There are long value chains involving many players coupled with inefficiencies that end up with low primary producer prices. Generally, there is a need to improve the business environment, in order to make markets more efficient. This, amongst others, can be achieved by enhancing public – private investments to avail the market with data, information, standards, logistics, etc. In aggregate, these services would address the noted market weaknesses.
There is a need for a more friendly policy and business environment on markets for farmers. At the same time there is a need build farmers capacities for them to benefit from improved markets. The government has a big role to play in this area especially considering the structure and organization of Tanzania’s agriculture. In the process, attention must be paid to regional markets. Furthermore, the emphasis should go beyond maize and rice and include marketing of other important SHF’s crops like cassava and sweet potatoes.
With regard to cashew, key should be for Tanzania to access markets for processed cashew nut. There is also a need to critically analyze the detachment of the WRS from the auction market. Public private partnerships in the cashew nut industry should be promoted and thus diversify the market to include other buyers instead of depending entirely on India.
Overall it was clear that continued improvement of policies is necessary but not a sufficient condition. For example, export restrictions without concerted efforts to develop the local industry may not yield intended results. Price evidences, and regional or inter-country correlations, must be linked to what is behind the numbers – any two price series could correlate, that correlation by itself should not lead to major conclusions. Enterprise activities and what needs to be done to intensify business activities across markets are equally if not more important aspects and thus topics for research. Such analytical frameworks would provide more practical and exact pointers for interventions to enhance marketing and trade.
- SESSION VIII: Nutrition and Gender
Two papers on nutrition were presented in the eighth session: (i) Nutrition sector review (ii) Nutrition sensitive agriculture.
Generally the two papers presented an unsatisfactory status of nutrition as may be read from the abstracts and presentation slides. There were also intriguing patterns of food insecurity. For example – regions with surplus food like Mbeya, Iringa, Rukwa and Ruvuma were the ones with high levels of malnutrition and bigger numbers of stunted children.
Conference participants drew a number of observations. Most likely the reason why we are failing in agriculture is because we are having stunted and anemic children due to poor nutrition in rural areas. These are the children who become farmers during their adulthood. Agricultural production, therefore, without improved nutrition status of the people involved in the sector is null and void.
Participants pointed to a number of issues that ought to be addressed by policy analysts. For example: more attention is needed on crops other than cereals, e.g. cassava, horticulture, etc. There is a need for establishing agricultural products standards including those for fresh produce. Accessibility and affordability, not only own produced HH products, may also be impinging on food security – some products are expensive, other products are only available seasonally. Furthermore an issue related to food security is food safety. There were also ideas such as those calling for the development of gender related technologies which may help to increase the availability of nutritionally rich food at the household level e.g. drip irrigation, drying of foods, cooking modalities to reduce overcooking, etc. In addition, an emphasis was that the issue of nutrition is more of education and sensitization. Farmers are cultivating a number of crops e.g. a diverse range of fruits and vegetables, but they do not use them in a manner that they may harness best nutrition – ironically some are considered to be inferior foods. Poor nutrition is not a problem confined to rural areas. In urban areas, the abuse of food is also leading to its own form of poor nutrition – obesity. Finally, and from a slightly different angle, participants felt that there is an apparent research gap in the consumption side or analysis of the demand side of key food crops in the country.
- SESSION IX: The New Alliance on Food Security and Nutrition – New Areas for Tanzania
There was only one presentation.
Progress in implementation of policy reforms under the new alliance on food security and nutrition.
A policy matrix on the New Alliance on Food Security and Nutrition was presented and participants were given an opportunity to discuss it through questions and comments. The following were noted under the following sub-headings of the matrix.
Agricultural input policy:
- Tanzania should widen the scope to include:
- Access and usage of fertilizer by small farmers
- Improved input subsidies to be targeted for increasing productivity.
- Strategies to develop human resource. This should ensure availability of necessary skills set to attract investments as well as for an effective government agricultural extension support.
- Research and development in the area of environmental management and its contribution to a green revolution?
- In the case of the agricultural input policy, where it is called for enabling the private sector to develop systems, plenary wanted an addition – “according to government guidelines and regulations”
- On agricultural statistics the plenary was of the view that data has two sides. On one side there is data collection, a task of statisticians. On the other, there is data use, i.e. for planning purposes, monitoring and evaluation. The quality of agricultural statistics data can only be improved with close exchanges between two sides. Such mechanism ought to be developed and put in place in Tanzania.
- In addition, it is important that capacities of policy makers are strengthened, especially in the use of agricultural statistics. Policy makers should not only understand how they can use existing agricultural statistics, but also be able to provide feedback to statisticians on the usefulness of the available agricultural statistics, and further guide on the kind of data they need for fact-based policy making.
- Strengthen the policy action to “invest in agriculture statistics capacity building”. The goals should be to more explicitly relate to principles of transparency in the collection and analysis of agricultural data. In doing so, recognizing the need for the public to access the raw data for more constructive dialogue. Clarifying the NBS as the agency mandated to be the repository for this data. Lastly, enhance public’s internet access to agricultural data.
Agricultural Markets and Trade policy.
- Tanzania should include the issue of developing crop standards; collaboration with TBS is needed in this case.
- Tanzania ought to note that Post Harvest Management is more comprehensive than agricultural industrialization. It covers both SHF and large-scale production systems, storage and value addition.
- Trade policies should address and include rules-based import tariffs in the agenda.
- Structural Trade system: closely look into country rules and regulations, dispute settlement why they occur, red tape procedures.
- Continued efforts should be made to create a competitive environment: antitrust law, anticorruption, provide necessary support to new entrants.
- There is a need to pursue courses of action to see that Tanzania’s trade policies are coherent with regional ones.
- Business development services in the area of marjeting and trade ought to be addressed.
Land Policy and Land Tenure
- Land tenure policy: add “on an equitable basis for women and men including youths, with minimal disruption to ….”. Objective 1 procedures for investors to access land … add “while respecting land rights of local producers and their communities, including women and youths”.
- Under land Tenure Policy – the plenary questioned whether RUBADA is the appropriate institution for land bank – or it it TIC, Ministry of Lands – others? There is a need to clarify the roles and responsibilities of MLNR, TIC, RUBADA, etc.
- Land access: equity access by youth, women, local versus foreign investors; land security protection to those with titles and use rights.
- Tanzania should include the promotion and enforcement of land use planning to mitigate conflicts.
- Access to capital and finance – including alternative fincne mechanisms for Agro-SMES, client screening and evaluation methods.
- Nutrition is missing – there is need to include nutrition may be under agriculture sector policy. Tanzania may include a policy objective that focuses on nutrition.
- Finance: New financing models, hybrid financing trade-credits, venture capital, investment funds, investors and access to commercial loans.
- Development of right institutional arrangement that support private sector development progressively.
- Livestock sector policy, agricultural insurance policy, and climate change ought to be brought to picture.
- Agricultural industrialization – focusing on the youth, value addition, enhancing competitiveness and eying emerging urban centres.
 PAG organizations include ANSAF, USAID, SAGCOT, AGRA, SERA project, REPOA, Michigan State University, FAP, FAO, ESRF, ReSAKSS and Tanzania’s Ministry of Agriculture.