Kilimo Kwanza Issue 20

Tuesday 31 August, 2010

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SUPPORTING THE PROMOTERS OF THE GREEN REVOLUTION

Irrigation: Bahi Districttakes the lead

Sorry, no title no loan

Tuesday 29 June, 2010

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SUPPORTING THE PROMOTERS OF THE GREEN REVOLUTION

Planting maize bannedResidents must harvest rainwaterUnused fertilizer confiscated

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The Guardian KILIMO KWANZA

FINANCE


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The Guardian KILIMO KWANZA Tuesday 31 August, 2010

2 EDITORIAL

By Angel Navuri

They turn up empty hand-ed and enquire about theloans they have beenpromised by the politicalleaders. The bank ofcourse turns these typicalTanzanian peasant farm-ers away, until they can

show that they have a registerable interestin the land they are farming on.

Understandably, they are baffled withthe Tanzania Investment Bank, which re-cently set up a specialised window to lendfarmers, also being among those that willnot entertain a borrower who has no landtitle. But a solution is on the way. Theprocess of registering, surveying and titlingland has gathered momentum. What ismore, the (Central) Bank of Tanzania hasalso taken a bold step and set up guaranteeschemes with banks that are involved in fi-nancing farmers.

Most peasants in Tanzania say theycannot step up their scale of agriculturaloperations because they lack capital. Yetthey possess the most important capital in-put for farming – land. How then do theyheed their leaders’ call to modernise andcommercalise their farms in order to breakout of their poverty trap?

Since the declaration of Kilimo Kwanzaa year ago, farmers have been advised toseek finance from banks as the quickestway to secure modern equipment, buy in-puts, improve storage and engage in basicprocessing to stem the colossal post-harvestlosses. But the banks require security,which most farmers do not have. The wakeup call must have come with the opening ofthe agriculture window at the TanzaniaInvestment Bank – and the farmers did notqualify to borrow there. Reason? No securi-ty.

Despite their holding hectares uponhectares of land, Tanzanian farmers cannottake this valuable asset to the bank, be-cause most of them do not have official doc-uments to prove their ownership, the docu-ments through which ownership can belegally transferred to a buyer, or a creditor.

All that is set to change, however, asthe Ministry of Lands, Housing and settle-ment embarks of an exercise to step up thesurveying and registration of land upcoun-try. The ICT Director in the ministry MrElias Nyambusani disclosed to KilimoKwanza in Dodoma recently that they havestarted in earnest to survey the country, es-pecially those areas where farming is tak-ing place with a view to issuing the bonafide farmers with titles to their land. Thatway, the farmers should be in position topresent 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 percentof the land in Tanzania is not yet surveyed.The whole country measures nearly onemillion square kilometres, of which about17 percent is surface, fresh water. A total of44 million hectares are suitable for agricul-ture but only a few of these are beingutilised, far below their optimum potential.Documentation for some nearly two hun-dred thousand hectares is being fasttracked through efforts of the TanzaniaInvestment Authority and the PrimeMinister’s Office for depositing in the LandBank from where large scale commercialfarmers shall access them.

For its part, the Tanzania InvestmentBank is encouraging small farmers to mo-bilise themselves and form groups whichshall be dealt with to provide some financ-ing, but still this will have to be preceded bydocumentation of land. TIB’s manager forSmall and Medium Enterprises BenjaminMazigo was emphatic while speaking toKilimo Kwanza that without documenta-tion of their land, the investment bankshall not be able to deal with the farmers.“So the ball is back in the government’scourt to ensure farmers have documenta-tion for their land,” he said

Apparently, Kilimo Kwanza has nowreached a stage where the participation ofthe ordinary farmers cannot meaningfullygo forward until they acquire documenta-tion for their land. President Jakaya

Kikwete himself has repeatedly calledupon farmers to secure documents of regis-tration for their land. According to theLands ICT chief Elias Nyabusani withoutdocuments, farmers cannot access institu-tional funding for increasing productivityand yet most of them are cultivating verysmall pieces of land due to lack of equip-ments.

Nyabusani said that its now high timefor large-scale commercial farming to takethe lead as it will also sensitive the smallfarmers to grow more and supply the com-mercial farmers. This, he said, will be thebest way for the farmers to be able to pro-duce more as they have a reasonable guar-antee of market.

According to the director when com-mercial farming picks up, it will help thefarmers to utilize the land better than everbefore because with more assured marketsthan looking at the limited official reservesor the long broken-down government indus-tries that cannot absorb the products fromthe farmers.

Speaking about external factorsNyabusani said that there is a problemwith Tanzanian laws that allow businesspeople to import low quality, cheap prod-ucts that adversely affect Tanzanian farm

products. “The government should reviewthe trade laws to make sure that there isreasonable security for Tanzania productsand infant industries by raising the pricefor foreign products,” he said.

To empower the Tanzanian farmers,Investment Bank SME manager BenjaminMazigo explained that the currently farm-ers are being advised to form themselvesinto groups of twelve to make it easier forthem to be financed more than as individu-als. “Currently farmers are forming them-selves into groups as a way to be financed tobe able to buy the agriculture inputs as itwill be difficult for the Bank to handle indi-vidual farmers,” he said. “There are thosethat cannot afford to buy a power tiller butit will be easy for them to be in groups”

He said there are no two ways about se-curing loans as the bank is also doing busi-ness and cant knowingly bankrupt itself.He pointed out that not all farmers requirethe same level of financing to improve theiroutput, as they are at different stages of de-velopment, with some only in need of smallsums for some inputs, hence the need tohave them in groups that can be lent largesums.

The Bank of Tanzania 2007 reportshows that loans to the broader agricultur-al sector accounted for only 10.4 percent ofthe total loans to the private sector. Yetsuch loans are currently available at ratesfor industrial production, and in realityonly 0.8 percent of the total lending by com-mercial banks was directed for agriculturalproduction.

There is also evidence of funds ear-marked for the agricultural sector remain-ing unutilized in some commercial bankswhen channeled through them. It alsoturned out that even lending of donorsfunds to agriculture is still an interest rateof 20 per cent, which actually defeats thewhole purpose of the existence of suchfunds. It remains doubtful whether com-mercial banks will on their own decide onconcessionary lending in agriculture, thebank notes, and that legislation in this re-gard may be necessary as India among oth-ers has done.

The Permanent Secretary Ministry ofAgriculture, Food Security andCooperatives Mohamed Muya said that it isnow high time farmers should change theirattitude towards crops to be planted asmany of them still see food as maize andrice only, but they have to think of othercrops like cassava, and potatoes. Accordingto the PS, peasant farmers should start todistinguish between crops for business andthose for domestic use.

He acknowledged the challenge of stor-age and infrastructure that farmers cannothandle on their own and is the responsibil-ity of the government.

Sorry, no titleno loan

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Another farmers Bank totake off with 50bn/-The main aim of start-ing a farmer’s bank is tomake sure farmers areindependent and canaccess loans more eas-ily than is the case withother banks.

RLDC working to make poultryfarmers and cotton growers richerAs the government is strug-gling to curb the problem ofaccess to market for thefarmers Rural Live hood De-velopment Company has en-gaged itself in makingmarkets work for producersas a way to support KilimoKwanza.

A mere tractor loan can worsena farmers’ situationThe country is currentlygripped in Kilimo KwanzaFever with both private sec-tor and the governmentlooking to the land and Agri-culture to end the direpoverty gripping the masseswho live in this bountiful re-source rich country.

Modern irrigation becomes a reality in Bahias Israelis arrive to pilot drip methodsLocal farmers and govern-ment experts have joinedhands to ensure constructionworks for irrigation schemesin Bahi district take off atrecord speed.The DistrictCommissioner, Mrs BettyMkwasa, is one woman in ahurry to ensure KilimoKwanza in Bahi becomes a re-ality, whatever the obstacles.

Almost everyone in Tanzania, farm-ers and non-farmers alike, sayslack of finance is a major hindranceto agricultural modernisation andcommercialization. The peasantfarmer says he is stuck in povertyand subsistence farming because helacks capital to break out. The ur-

ban worker says he cannot take part in the country’sinviting agriculture sector because he lacks the capitalto break in. The political leaders say they are settingup an agricultural bank and agriculture windows inother banks to help the farmers to access capital sothey can break out of their poverty circle. The bankerssay they are willing to lend the farmers money provid-ed they are provided security, otherwise known as col-lateral. The government says it is speeding up the doc-umentation of land so that farmers can get certificatesof registration for their land, so they can access bankloans.

But it will take more than just the provision ofcash or a tractor loan to turn a peasant into a com-mercial farmer. Treating agriculture like a businessstarts with the mind. A peasant mentality may notsimply be changed by using a tractor instead of a handhoe alone. In a situation where agricultural extensionservices are long broken down; where natural climaticconditions still control over 95 percent of the arableand livestock farming; where many people find it diffi-cult to differentiate between personal expenses cashand business funds – don’t even our elite mix up de-partmental funding and their own personal needs – itmay requiremore clear headed guidelines if funding tofarmers is not going to end up as a failed initiatives.

Elsewhere in this paper, a well established agri-business operator has suggested a round table bring-ing together planners, lenders and borrowers to puttheir heads together and agree on the structure of thepackage that a farmer needs to take off with minimalrisks of failing before even the second harvest. Hetakes a hard look at the belief that increasing theploughing capacity – that is a farmer opening up moreacres of land – is sufficient to launch him into theranks of commercial farmers.

There writer says that there is an urgent need todetermine the minimum package of equipment neces-sary to for a small farmer to produce for examplemaize and rice competitively so that we can supply ourdomestic market, export our surplus profitably andraise our farmers’ standard of living to well above thepresent poverty line.

By simply enabling a farmer to plough more acres,without a corresponding increase in his ability to tendthe larger area and output, youmight actually put him

in more trouble than he was in when he was tilling asmall piece of land. A tractor is a mere carrier of a setof equipments, which are more than a plough. So afteropening up a few hundred acres, a farmer needs an in-creased capacity to plant them, weed them, harvestthem and protect the output from the notorious post-harvest losses occasioned by lack of storage and poorhandling.

Relying on hand labour could be more costly thanusing technical innovations that may have been over-looked, or denied, when the initial loan was being tak-en. At current farm gate prices of Tshs240 a kilo ofmaize for example, it does not make sense for a farmerto pay Tsh200 per a kilo of maize to be hulled by hand,but this is the going rate. So that is what he will haveto do faced with a large output he is not used to han-dling, if he opened up more land than he is equippedto handle. But that is if he gets to produce the largeoutput in the first place. He may plough two hundredacres because he borrowed Sh37 million to buy a trac-tor, but lack money to secure high quality seeds, pro-vide water if the rain fails, buy fertilisers and herbi-cides and finally successfully harvest all the produce.What is clear therefore is that technology should notjust be applied to a small portion of the process. Thereshould be enhancement along the whole chain so thatone enhanced step is not rendered ineffective by thestunted ones.

It is important to examine creative ways of en-hancing farmers’ access to better technology withoutexposing them to high credit risks. There is no need forexample for a farmer to own a tractor that will be re-dundant for most of the time. He should only borrowmoney to hire one for a few days. But before being giv-en the loan, he must show proof of having access to arentable tractor like belonging to a society that has onefor hire. We should avoid turning peasants intodebtors who failed because they borrowed to buypieces of equipment that did not increase their pro-ductivity. Someone may fail to pay back say, shs40million he borrowed to buy a tractor yet if he had bor-rowed a little more he would have made profits andbeen able not only to pay back but also to prosper. It isimportant to give loans. It is even more important forthe borrowers to succeed and can pay back.

Wallace MauggoEditor

Time to get clear headedabout agricultural financing

Artwork & Design: KN Mayunga: [email protected] To have your organisation promoted in Kilimo Kwanza, Call: 0787 571308, 0655 571308 0754 571308

Agriculture window at TIB yet to lend farmersLands ministry speeds up surveying the countrysideInvestment Bank advises farmers to form groups

Nyambusani and Mazigo

INVITATION FOR PROPOSALS (IFP)FOR

CONSULTANCY TO UNDERTAKING SUB SECTOR ASSESSMENT FOR GRAPES

IntroductionRural Livelihood development Company (RLDC) is a non for profit organization that works in six re-gions of the central corridor with a vision of making market systems work better for rural produc-ers to improve their welfare. RLDC delivers its mission through working in specific selected subsectors mainly agricultural and those that are closely related. Currently RLDC has interventions indairy, sunflower, poultry, rice, radio and cotton. RLDC continuously seeks to assess the potentialityof other sectors or sub sectors in the central corridor first for knowledge base and second for po-tential development of the sector.

RLDC has set aside funds to undertake several sub sectors assessments during the period 2010-2011. For these particular Terms of reference, RLDC would like to undertake an assessment of theGrapes sector.

This term of reference is prepared to provide the consultant with proper guidance of expectedactivities and deliverables from the assignment.

ObjectiveTo 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.

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, ca-

pacity 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 sec-

tor.• 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 AssignmentThe assignment needs to be undertaken by exploration of information both from the secondary andprimary sources. Field visits, interviews, focus group discussions with relevant stakeholders needsto be employed in undertaking the assignment.The consultant shall also work in close collaboration and support of the team of interns at RLDC mar-ket development department.

Coverage/ScopeThe assessment needs to focus more on the grapes production region mainly Dodoma but also col-lect and analyse information at the national level as well as the grapes in the international market.

DeliverablesThe 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 presen-

tation 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 thepresentation 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 stakehold-

ers.• 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 FrameThis 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, up-

dated CV of the proposed consultant(s), profile of the consultant or of consulting firm, relevantcertificates, a detailed work plan with time table and budget quoted in Tanzania shillings and besent to.

Chief Executive OfficerRural Livelihood Development Company (RLDC)2nd Floor, NBC Building, Kuu Street,P.O Box 2978, DodomaEmail: [email protected] xx

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The Guardian KILIMO KWANZA

COVER STORY


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4 COVER STORY

By Angel Navuri,Bahi

Local farmers and govern-ment experts have joinedhands to ensure construc-tion works for irrigationschemes in Bahi districttake off at record speed.The DistrictCommissioner, Mrs Betty

Mkwasa, is one woman in a hurry and isnot sparing any efforts to ensure KilimoKwanza in Bahi becomes a reality, whatev-er the obstacles.

No meaningful agricultural develop-ment can be expected in semi arid areaswithout irrigation but competent firms thatcan set up the required infrastructure arenot readily available. Hence the need to cre-atively assemble teams that comprise ex-perts borrowed from the central govern-ment, local agriculture officers and peasantfarmers themselves who are the intendedbeneficiaries of the irrigation schemes.

These creative efforts have seen thebirth of new irrigation schemes in Bahinamely Mtitaa which is costing Tsh400mil-ion, Chikopelo that will consume Tsh606million and Mtazamo whose cost is Tsh675million.

Besides these budgetary disbursementsfrom the government, another major contri-bution whose cost has not been computed isthe labour provided by the local farmers inclearing the paths and helping in the exca-vation of the canals.

Speaking to The Guardian’s KilimoKwanza that visited the irrigation schemes,the District agriculture officer SylvesterKashaga said that the constructions are inthe last stages and they will be handed overby November.

The farmers are involved in the processof the construction so that they can alsogain guidance from the contractors and theagriculture officers. It is a two-way process,for they also provide local knowledge to theexperts as construction goes ahead.

According to Mr Kahsaga, Bahi wassupposed to have 10 irrigation schemes butthey have decided to have four big irriga-tion schemes instead of having many ofthem that have a limited capacity of serv-ing.

Kashaga said that the establishementof the schemes it’s for boosting rice produc-tion in the interim, then later they will haveother crops included too. The projects willbe depending on a combination of the riversand rains as a source of supplying water.

“For this irrigation schemes the famerswill dependmore on the river water and therains, “he said, explaining that it will beseasonal farming. Besides harvesting therains, water will also be obtained from therivers Bubu, Mtonga, Mkambala, and

Makorongo.Besides the volunteer labour from the

farmers, the District Agriculture Officeralso highlighted the major commitment ofthe District Engineers and technicians whomade the as irrigation construction possi-ble. “There is money for irrigation develop-ment for all districts in this country butwhy some have not taken off is partly dueto lack of such committed technical person-nel as the ones we have in Bahi,” he ex-plained

The district commissioner BettyMkwasa said that her district managed toget good contractors after they advertisedin the media and scrutinised the qualifica-tions of the applicants.

Mkwasa also disclosed that Israeli con-tractors will be coming on board very soonand 20 hectares have already been ear-marked for them to start a pilot drip irriga-tion schme with several farms. This will bejust the first phase of a project that will cov-er 116 hectors for the entire drip irrigationpilot scheme.

Asked how she managed to attract somuch money (over a billion shilings) to thedistrict’s irrigation scheme, Mkwasa saidthey got the funds by writing good, convinc-ing proposals by the help of their agricul-ture officer. “We were not given the moneythat easily,” she recalled. “For your districtto benefit, you have to submit proposalsthat are good and convincing of you are tothe needed funds for construction,” she said“I think we got more money this year thanany other ditrict for irrigation,” she said.“But we still need more because irrigationconstruction is quite expensive.”

Mkwasa also said that plans of drillingboreholes for farming are underway sincethe area is so dry and there will be specificareas since many of the areas have saltywater.

Speaking on the shortage of seeds, shesaid in her district it is not yet a problem.The DC reiterated that her ban on plantingmaize in Bahi is still in force and “seriousaction” awaits anybody who dares violate it.

“Changing the mindset of the people toagriculture is a challenge leadership at alllevels in the country is still facing,” shesaid. The DC slapped a ban on the plantingof maize in her district earlier this year,saying it is time residents realised thatthere are other, more profitable crops – in-cluding rice - to grow. She also ordered theconfiscation of fertiliser obtained under thesubsidy scheme that may be found lying inpeople’s homes instead of being taken to thegardens.

Extension agriculture officer SeshikaMchomvu expressed the confidence thatfrom now on, the Bahi farmers will producemore than enough for subsistence becauseof the irrigation schemes that that havebeen started.

He said that at first farmers could notproduce enough because the water couldnot move to the farms as a lot was sinkingto the ground but now it will be easy as thewater flow is technically controlled.

Irrigation officer Nicolas Lipundu saidthat the renovation of the dams will help incollecting more water and it will help incontrolling more than before.

He said that at first the water held byone dam was 56,000 cubic metres but afterrenovation the dam can now hold 60,000cubic metres.

According to Lipundu before renovationof the dam and construction of the irriga-tion schemes the water used to “passthrough” and not getting to the farms butnow the water will be controlled and direct-ed to where its needed.

He said to further boost the irrigationcapacity, a survey tp precede drilling ofboreholes will start soon as to avoid fromgetting salt water that is not good for irri-gation.

A local farmer, Mr Hassan Abubakarsaid that they didn’t expect that irrigationconstruction could become a reality, andcan hardly believe their good luck.

He expressed satisfaction that in addi-tion to providing more water for farming,the irrigation scheme actually controls the

floods, something they had never expectedto see in their lifetime.

Abubakar noted that right now theframers are happy and are ready for seriousfarming and are fearing that they mightproduce too much produce for the available

market. Speaking on behalf of the other lo-cal contractors, Contractor Christion Kaguoof Kaguo Business Enterprise CO.LTD saidthat the construction will be handed over byNovember.

But Kaguo urged the government to re-

view its irrigation contracts guidelineswhich he said have a lot of limiting regula-tions that many local contractors are failingto meet.

“We have good contractors too in thecountry but the government should review

its irrigation contracts as there are so manyissues to be tackled. This has lead to manyof contractors not being interested in ap-plying for the irrigation contracts,” he ar-gued. “That’s why the government is facinga challenge of getting good contractors.”

Modern irrigation becomes a reality in Bahi as Israelis arrive to pilot drip methodsTshs1.6bn worth of irrigation schemes to be handed over by November Local contractors say government tendering condititions too stringent for them

District agriculture officials and localfarmers took the Guradian KilimoKwanza aroiund the ongoing irrigationschemes construction works recently

The Guardian KILIMO KWANZATuesday 31 August, 2010

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6 INTERVIEW PRODUCTION COST

By Angel Navuri, Dodoma

As the government isstruggling to curb theproblem of access tomarket for the farmersRural Live hoodDevelopment Companyhas engaged it’s self inmaking markets work

for produces as a way to support KilimoKwanza.

Q: Please give us a brief history ofRLDC?

A: It is a non profit company financedby the Swiss Agency for Development andCorporation was established in the centralcorridor of Tanzania with a goal of makingmarkets work for rural producers. Part ofthe technical expertise is provided by Swissorganization interoperation and swisscon-tact. Rldc is working to facilitatemarket de-velopment in the following sectors: sun-flower, cotton, rural commercial radio,dairy, poultry and rice.

We have established and implementeda unique and systematic approach withinmarket facilitation. The organization is con-tinuously looking for partners from privateand public side to share the common visionof making systems in Tanzania work betterfor rural producers to improve their wel-fare.

Q: Why should public and privatesector should get involved in RLDCmarket facilitation activities?

A: A systematic approach such as oursis key to bringing about change in marketdevelopment. Making markets work betterfor the poor approach is recognized by de-velopment workers as themost effective ap-proach to bring about change in marketsystems and therefore sustainable develop-ment.

In diverse sectors such as agriculture,health, water, livestock, manufacturingand mining, efforts at direct interventionfail because the systems are not in place tosustain the effort. The poor are dependenton market systems for their live hood.

Therefore changing themarket systemssuch as regulations, tax policies, access tofinancial services, productivity improve-ments, tends to work more effectively andsustainably to improve livelihoods and re-duce poverty.

We combine market development witha clear pro poor focus in a difficult econom-ic area. Following this vision is our missionto link market development to poverty re-duction for rural producers, mostly smallholder farmers. The organization aims atimproving the welfare of about 80,000households by the end of 2011, which corre-sponds to half a million people.

The market economy is still not fullyfunctional and the government continues toplay an important role as a key actor inmarket development which elsewhere isconsidered to be the domain of the privatesector.

We are the leading facilitator of themarket development in the sunflower sec-tor. Sunflower oil has a great potential forthe whole of Tanzania and more specifical-ly for the central corridor with its dry cli-matic conditions, and we hold a leading rolein the market development. We facilitatethe following activities: improving the pro-duction and marketing of quality seeds, es-tablishing contract farming systems be-tween rural producers and processors, cer-tifying oil quality standards, and refiningsunflower oil.

We are the biggest facilitator of marketdevelopment in the cotton sector. We facili-tate market interventions in organic andconventional cotton with emphasis on con-tract farming and warehouse receipt sys-tems, which allows cotton farmers to takeup loans on their produce.

Q: Do you have any plans of ex-panding the facilitation role?

A: We are expanding our facilitatingrole in the market development into sectorslike dairy, poultry and rice, the implanta-tion of the market development facilitationjust started in 2009 and the first resultswere expected by mid 2010. The goal of thedairy sector effort is to transform informalmarket initiatives into a well organized,formalised market system. The poultry sec-tor efforts replicate a successful pilot projectwhich was facilitated by us in the Bariadidistrict; we have also concluded an assess-ment of the rice sector and have shared astrategy for the sector market developmentwith market actors to build a long termcommon vision for the rice sector.

Q: How do you find the market in-ternally and externally?

A: We don’t find the market but we de-velop market systems for rural producers toimprove their welfare, and this involvesboth internal and external because we focus

more on the local market which later willlead external market as well as foreignersbuying and exporting.

Relating to Kilimo Kwanza we sensitizethe farmers to have good relationship withlocal industries, so that they will be able tosell their products.

Q: How do you earn money to runthe market development system?

A: The money is from donors and wehave to account for every cent, and thedonors are still supporting to make the pro-gram a success.

Q: What are the challenges that theorganization is facing?

A: There are so many challenges butwould like to mention few like infrastruc-ture in the rural, private sector sector theyare not dynamic for example on researchthey always avoid risk, climate change isalso another challenge .

Q: How many regions is the organ-ization dealing with?

A: We are dealing with six regionswhich are Dodoma, Singida, Morogoro,Tabora, Shinyanga and Manyara. RLDC iscontinuously concerned about the fate ofsmall producers, especially with respect toaccess reliable markets which could ensurecontinued income and enable rural produc-ers to access financial service for purchaseof inputs and cash against crops in the field.The contract farming intervention in thecotton sector is geared to provide the con-

tracted farmers with agri-inputs, such asimproved seeds, fertlizers, agro-chemical,extension services, all partners of RLDC ex-ercise contract farming.

The aim in the cotton sector is to in-crease productivity in cotton growing froma current average of 270kg per acre to anaverage of 340 per acre, which increase ofabout 25 percent. Organic cotton producersare supposed to increase from 3,000 house-holds to 6,000 households by the end of2010.

Imprioved business environmentthrough good contract and communicationamong cotton stakeholders is one of the pre-conditions to achieving these targets.Through the cotton strategy the organiza-tion expects to reach 25,000 households, ofwhich a quarter are organically trained.Organic cotton farming has expanded andhas proven to be a viable option to accesspremium markets. Over 3000 farmers hadorganic certification in the 1st year inSingida region.

The organization aims at transformingthe poultry sector, which is a conventionalsubsistence activity into a commercial busi-ness, to provide employment and income forrural small holder producers, and in partic-ular for women.

A thorough assessment indicates hugepotential in the poultry sector, especially inthe central corridor. In its earlier phase theorganization facilitated interventions to im-prove production and marketing of poultryin a pilot project in two villages in theBariadi district, Shinyanga region.

The project involved adaptation of acommercial poultry-keeping model that hasachieved tremendous results in many coun-tries, including Bangladesh and Kenya.

The outcome of the Bariadi model suc-ceeded in substantially increased income ofthe producers. In addition the presence ofabout 60 percent women in the groups in pi-lot villages indicates the potential to createincome opportunities for women. Overall,600 percent increase in chicken productionwithin one year of piloting was achieved.Growth and progress are visible in thesepoor communities, including improved andincreased chicken production and salesaround Baridi town and afar.

One farmer, Christina Theo sold 75chickens at 5000 to 7000 tshs each in onemonth, greatly boosting disposable incomefor her family and raising their quality oflife. The we got mr Nicodemus Lyatinga forinstance, who says that the demand is nowexceeding supply of his local chickens, a sit-uation faced by others in his community.

The organization aims at improving lo-cal products consumption as well as com-mercializing the local poultry industry inthe next two years.

But we are focusing for all products pro-duced by farmers, for example cotton mar-ket development in central of the country.The cotton sector has a huge potential to in-crease the income and employment of ruralproducers in the central corridor.

RLDC working to make poultryfarmers and cotton growers richer

Jonathan Lane

The country is currentlygripped in Kilimo KwanzaFever with both privatesector and the govern-ment looking to the landand Agriculture to end thedire poverty gripping themasses who live in this

bountiful resource rich country.Farming like any other business is a

skilled and complex vocation which re-quires skills in agronomy, business plan-ning and financial management. No matterwhether you are eking a living out of thesmall 100 acre farm or you run a 5000hectare agri-business outfit, the challengesare the same, just the scale is different .

Perhaps the real issue here is thatwhile we have large scale farms on thisscale owned by experienced and skilledfarmers, the vast majority of the newemerging class of “mechanized farmer” arein fact peasant class subsistence farmerswho are evolving out of subsistence exis-tence into commercial farming, wherebythey intend to produce more than they needand will sell the surplus. But this will onlybe sustainable if that surplus is sold for aprofit and the farmer gains from his invest-ment and risk to expand.

Typically we have ploughed, planted,weeded and harvested virtually singlehandedly using labour and hand tools sinceindependence until now. In fact in the1970’s we had 3 times more tractors thantoday which is a shocking but true fact. Onthe ground today we now have a new driveto issue the farmers with equipment fi-nanced by loans from our various institu-tions such as AITF, commercial banks, andmore recently some agricultural windowloans from a government owned bank.

It seems these farmers appear to havechosen or been advised to buy only a tractorand plough and the lending banks havestood back and agreed to this on the nobleprincipal that we are in a free market econ-omy and the borrower knows his own busi-ness. Unfortunately both the borrowers andthe lenders are new to this business and thelearning curve needs to be shortened if weare to avoid failure and disillusionment.

A tractor is in fact just the tool-carrierfor a whole range of different tools neces-sary to mechanise; ploughing, seed bedpreparation, planting, weeding and har-vesting equipment. All are equally impor-tant tools to investment in if the tractor isto be utilized efficiently.

The current spate of new start ups istypically a farmer equipped today with onlya plough and tractor who has now got a 3 to4 year debt to repay and the capacity toplough 150 acres a year. However havingploughed the land, has he planned how tofind and pay for the labour, seeds, fertilizerand finally storage and transportation ofthis expanded area?

Immediately we expand the cultivatedarea of land in Tanzania using tractors forploughing, we correspondingly increase thelabour cost of all the activities. I cameacross maize being hulled by hand inKilimanjaro region at Tsh20,000 per100kgs bag due to labour shortage and oth-er competing activities happening at thesame time. This is 200/= a kilo and maize isnow being sold in the market for Tsh240 akilo and falling .

Mechanized cultivation and harvestingcan bring the cost down to perhaps 120/= akilo and the single biggest cost of maizehulling still largely done by family labourand hired labour can come down to 15 /= oreven lower. I sell a maize sheller for aboutTsh3.5m which is driven by the tractor andcan hull 1000 kgs an hour of maize grain. Itis driven off the tractor and costs the ownerof the tractor perhaps Tah120,000 worth offuel and labour to process 10,000 kgs in aday, that is 12/- a kilo versus up to Tsh200a kilo by hand .

Mechanical weeding and use of chemi-cal herbicides and tractor driven sprayersalso add huge cost savings to the productioncost .

A small and very approximate costingcomparison is appended below to illustratethe cost benefit of mechanized versus hand.If the farmer with the tractor and ploughhas a loan of Tsh45m and he is producingat a loss how then will he repay his loansand provide an income to his family? Whenhe defaults who will we blame? The farmeror the bank?

It’s probably now very urgent for theplanners, lenders and borrowers to puttheir heads together and decide what is theminimum package of equipment necessaryto produce maize and rice competitively sothat we can supply our domestic market,export our surplus profitably and raise ourfarmers’ standard of living to well above thepresent poverty line.

My humble suggestion is that whilefarmers continue to buy tractors andploughs through their SACCOS loans theSACCOS should itself invest in a pool ofcultivation, planting, weeding, and harvest-ing equipment that is hired to the memberso that he can utilize his tractor fullythroughout the year without the excessiveburden of financing the same.

Banks that lend to finance a tractor andplough may get their money back if theirclient is a contractor providing ploughingservices. If he’s just a farmer relying onhand labour then the cost of production willexceed the market price and the businesswill fold quickly.

The table shows a very approxi-mate scenario of capital outlay vs prof-it from a 100 acres maize venture us-ing mechanized versus labour.

Clearly then, banks who are restrictingloans to the 100 acre farmer are in fact en-suring he can’t repay. There is no half wayhouse on the road to mechanization.Commercial farming is a competitive busi-ness and anyone venturing to grow for prof-it must be advised accordingly

THE POTENTIAL FOR COSTSHARING USING COMMUNITYMACHINERY POOLS AND CROPSTORAGE FACILITIES

It is a fact that for the next 25 yearsTanzania Agriculture shall develop aroundthe uplifting of the co- operative and Saccosmovements . Perhaps 75% of our productionshall rely on small farming communitiesworking under the umbrella of co-operativesocieties and SACCOS. It is also a fact thatwe currently don’t have any infrastructureto support the farmers’ post harvest stor-age. Collateral management for warehousereceipts systems is being established but itis still in its infancy, bogged down with gov-ernment controls and completely lacking inphysical infrastructure .

A 2,500 ton silo with cleaning, drying,fumigation, weighing and bagging facilitycan be installed today for a very modestsum probably not exceeding USD200,000.These are turnkey projects which can bemanaged by software systems which can belinked to the Saccos bank so that ware-house receiptsmanagement can all beman-aged at extremely competitive prices and atthe same time be profitable to the opera-tors. They do however have to be owned andmanaged by a private service provider whois paid a fee per ton for each service provid-ed. The challenge here is to get governmentout of the business of managing crops andinto the business of regulating and legislat-ing. Legislation that bars middle men frombuying crops from farmers and forces themto buy from the warehouse receipt managerwould be a good start.

Various claims about how much of theannual crop Tanzania looses annually topost harvest losses vary but they are defi-nitely not less that 40%. Banks, Saccosgroups and potential private sector serviceproviders need to sit down and have abrainstorm on this one. Government partic-ipation will also be relevant if only to notewhat legislation is necessary to protect theinvestors in infrastructure and the farmerswho grow the crops from middleman ex-ploitation. Farming and crop storage needsstrong government legislation and regula-tion so that private sector investment ispromoted and protected and farmers areshielded from the middle men who current-ly control the farmers and in my opinionkeep them submerged in debt and poverty.

There is no rocket science here. All ofthe above suggestions and observations aretried and tested in emerging economiesaround the world where large populationseke out a living from small scale farmingunder coops and saving societies. There isan urgent need for a review of financing pri-orities, government legislation and focus onprivate sector participation to guide theKILIMO KWANZA green revolution to itsrightful place in history.

The contributor is a seasoned industri-alist, farmer and machinery distribu-tor in Tanzania.

A mere tractor loan canworsen a farmers’ situation

Mr Oguttu, the RLDC chief,talks to Kilimo Kwanza

Earning cash fromorganic cotton

A happy peasant withthe products of her“golden eggs”

Sunflower can grow inmost parts of the country,including the drier ones

By Angel Navuri

For a long time since inde-pendence, farmers inTanzania seemed to havebeen forgotten. Yet agri-culture has always beenreferred to as the back-bone 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 ini-tiative which prioritises agriculture.

It is under this initiative that a farm-ers’ bank will soon be established. The firstof its kind, the bank will enable farmers inthe country to access loans without barri-ers. President Jakaya Kikwete broke thegood news in Dodoma recently when clos-ing the Nane Nane farmers’ fair, sayingthat the government has set aside 50bn/-for establishment of the bank.

“The main aim of starting a farmer’sbank is to make sure farmers are inde-pendent and can access loans more easilythan is the case with other banks,”President Kikwete said.

The President said that since the gov-ernment has decided to focus on agricul-ture, a farmer’s bank should be started as away to boost their income.

He said farmers will be motivated inproducing more to sell and depositing theirearnings to the bank for their own benefit.

According to him, the farmers’ bankwill be different from the agricultural bankthat is currently under the TanzaniaInvestment Bank. It is the farmers them-selves that will be in charge of their bank.

The farming public is yet to be given de-tails about this proposed bank, in regard tomatters like its shareholding, which agen-cies will spearhead its creation in the wayTIB is doing for the Agriculture

Bank, and which proportions the gov-ernment’s sh50bn will be shared betweenloanable deposit and for structural set up.On his part, the Tanganyika FarmersAssociation (TFA) Chairman, Elias Mshiu

said they have all along advocated for afarmers bank with full support from thegovernment. Adding that the recent liberal-ization of state bank and their subsequentprofit motivation has left farmers terriblyexposed.

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 shouldunderstand that agriculture is the back-bone and leading sector of the economy.The sector is vital to the country’s economy

and the reduction and eradication of pover-ty. “Apart from providing food, agricultureremains the country’s main source of in-come for the rural population which forms80 percent of the total population and em-ploys 70 percent of the active labour force.It contributes about 50 percent of the GDPand 75 percent of foreign exchange earn-ings,” he noted Mshiu said TFA is proud tohave been actively engaged in the advance-ment of the agricultural sector in Tanzaniafor three quarters of the century.

Our services have extended to thewhole spectrum of the sector, from provid-ing small- holders with hand hoes to find-ing markets for products from large com-mercial farmers,” he noted.

According to Mshiu, the agriculturalsector has not received the attention it de-serves. It is neglected and unexploited. Hesaid agricultural exports are yet to attainsatisfactory levels and that productivity isstill very low. Moreover, the business cli-mate in

Tanzania is constrained by several fac-tors and this affects investment in the sec-tor. The Minister for Agriculture, FoodSecurity and Cooperatives Steven Wassirasaid that the farmers’ bank is to give wayfor farmers to tackle agriculture as an in-vestment that will transform their lives.

He said it was high time farmers prac-ticed agro-business which has seen manydeveloped countries eradicate poverty sincethey treat it as a tool of boosting the econo-my. Wassira said this year’s Nane Nanetheme; Green Revolution and FoodSecurity explained that the main aim of in-creasing more agricultural extension offi-cers is to make sure that farmers access in-formation accordingly.

He said agricultural inputs have in-creased by 112 percent so that farmerswould be able to get all the agricultural in-puts needed as a way to increased produc-tion.

Wassira said the Nane Nane thememotivated farmers and other stakeholdersto participate in agricultural investment,including the private sector.

By Angel Navuri

INADEQUATE storage facilities at one ofthe major grain markets in the countryhave contributed to huge losses by farmers,especially during the rainy season.

The situation is indicative of the woesfaced by farmers across the country.

Speaking to Kilimo Kwanza recently,the Chairperson of the ManagementCommittee of Tandale Market in Dar esSalaam, Sultan Kiyumbo cited poor infra-structure, no water supply and shortage thespace as other challenges faced by users ofthe market.

”This market is in urgent need of im-provements because the number of farmersand buyers using it has increased tremen-dously,” he said.

Elaborating, the chairperson said thatthe inadequate storage contributes to hugelosses suffered by grain sellers during therainy season.

The market charges 20 shillings perkilogram of rice and beans and five (5

)shillings per kilogram for maize deliveredat the market.

However the market is not responsiblefor any losses arising from destruction, de-cay or deterioration of produce deliveredand stored at the market.

“Users of the market should follow upsuch issues with their brokers,’ he added.The brokers are responsible for reimburs-ing the farmers for any damage to the pro-duce stored at the facility.

Before transporting their produce tothe market, farmers usually first check ex-istingmarket prices from brokers operatingthere. The farmers also remain in constantcommunication with their selected brokersviamobile phone to confirm the sales statusof their produce.

A broker and the Treasurer of TandaleMarket and Grain sellers Association andInvestment, Sadik Kubiga confirmed thatlosses are common especially in rainy sea-son. He also commented that competition ishigh at the market and that farmers cannotexpect to sell produce on the same day it isdelivered. “Sakes depend on the buyer’s

price so many farmers leave their producewith us,” he said.

Confirming that poor storage facilitiesas a main hurdle, farmer Sadik Omar saidthat many grain farmers in the country de-pend on the market but storage remainstheir biggest problem to date.

He also cited poor profit margins re-sulting from price fixing by buyers as an-other major hindrance for farmers hopingto reap gains from the grain trade.“Transportation cost me TSH 6,500 perbag. To make a profit I should sell my grainat TSH 1,200 per kilo. However I am nowforced to sell it at TSH 900 per kilo which isnot profitable,” he lamented.

Commenting on the East African (EAC)common market, the farmer said that thereis no way for local farmers to participateand gain from the common market becausethe government has banned selling of grainto neighbouring countries.

Tandale is an open market thatemerged in 1976 andwas later re-organizedinto a whole salemarket by the governmentin 1986. The facility receives different kinds

of produce from all over the country. Withtime it has evolved into a major wholesalegrain market in the city.

A few months back, the Minister ofAgriculture, Food Security andCooperatives, Hon. Steven Wassira (pic-tured) termed successful co-operative soci-eties as a savior for farmers.

“They evade the onslaught of un-scrupulous middlemen and other high-pro-file crop thieves and go for reliable cropmarkets,” he is quoted saying. According tothe minister a lot of grain produce inTanzania is wasted in the fields and muchof the harvested crop is sold at throw-awayprices to middlemen.

But some Members of Parliament(MP’s) contended that there was no point instoring farmers' produce, reasoning insteadthat farmers need to sell their produce incash and spend the money on other essen-tials like fertilizer, food, school fees anditems of clothing.

Agriculture is of vital importance toTanzania given that about 30 per cent ofthe GDP, 30 per cent of the total exports

and about 80 per cent of labour force comesfrom this sector. However, significant im-provement in agricultural productivity hasnot been observed due to the rain-fed agri-culture.

The economy is dependent on agricul-ture which accounts for about 40 per cent ofGDP and 80 per cent of the country’s labourforce works in the sector. As a result per-formance of the sector affects other eco-nomic indicators.

For example the inflation rate was heldfirmly at below five per cent especially be-tween 2002 and 2006. Unfortunately, foodprices became unstable driving inflationrates to 7.3 per cent in 2006 and to 7.0 percent in 2007. In 2008, the global financialcrisis sent food and oil prices galloping tak-ing the inflation rate to 10.3 per cent.

Tanzania remains among the poorestcountries in the world with a per capita in-come of US$400 (2007).

Despite substantial improvement ofmacro-economic indicators such as foreignexchange reserves, poverty reduction re-main a challenge in the country.


8 NEWS

Another farmers Bankto take off with 50bn/-

Farmers affected by poor grain storage at market

Mtwara power tillersbecome decorations

By Abdallah Bakari,

AS FARMERS cerebrate one year of imple-mentation of kilimo kwanza, it has been es-tablished that 81 power-tillers out of 185purchased by Mtwara District Councilhave not been given to farmers, instead areused in the “show yards” in District Counciloffices.

The survey made recently by this re-porter at Masasi, Nanyumbu, Mtwara andNewala Districts here in Mtwara regionhas established the facts that Tandahimbadistrict council is leading in holding morepower-tillers of which 38 out of 50 are inhold.

The District Executive Director, Mr.Abdallah Njovu said only 12 power-tillershave been submitted to the farmers, how-ever, the intention was to submit all 50 ma-chines after the payment of 20 percent ofthe price by farmers’ groups or hamlets.

Newala District Council which pur-chased 50 power-tillers, only 30 have beentaken by farmers while 20 remain onCouncil’s yard, while Masasi DistrictCouncil holds 11 out of 21 power-tillers,and Nanyumbu has nine out of 21 pur-chased power-tillers.

Also, the survey established thatMtwara-Mikindani Municipality pur-chased only six power-tillers, in which onlythree have been taken by farmers andMtwara Council which purchased 37 hassucceeded to supply all power-tillers totheir farmers.

The Mtwara District ExecutiveDirector, Mr. Mohamed Ngwalima saidonly effort enabled they to succeed the mat-ter was to educate the farmers on the im-portance of using power-tillers on cultivat-ing the land.

“We purchased these power-tillers asthe implementation of the order given byPrime Minister, Mizengo Pinda, the aimwas to make revolution on the use of mech-anization, but farmers do not respond ac-cordingly ... they suppose to contribute 20percent of the price which was about 1.5million” said Mr. Adoh MapundaNanyumbu’s District Executive Director.

Mtwara Mikindani MunicipalityExecutive Director, Mr. Sabin Silima said,farmers had poor response on taking pow-er-tillers, however sensitized efforts weremade.

“New ideawas the District Councils notto purchase power-tillers before an demandapplication from farmers who combinedinto a group or hamlet … the money usedto purchase these power-tiller which arenow here could be used to other areas” saidSilima

Some farmers said their poor responsewas caused by extremely poverty amongfarmers and asked Councils to providethem as loans.

“When you introduce new issue to someone you should be able to incur opportunitycosts …, we, as farmers, need power-tillersbut we don’t have money to contribute”,said Aman Ismail, a farmer at TandahimbaDistrict

By Salma Said

INADEQUATE meat processing facilitiesin the country are denying livestock farm-ers the full benefits from their trade, theherdsmen have complained.

“Most of the livestock keepers in thecountry are small farmers with a largenumber of livestock. Unfortunately theyearn very little because of limited process-ing facilities,” recently said Mr JeremiahTemu, an official at the Pugu livestockmarket in Dar es Salaam. He was ad-dressing a team of journalists who wereprobing agricultural marketing policies.

In spite of Tanzania’s huge livestocksector and the government’s stated com-mitment to develop the industry, the coun-try is still lagging behind in processing and

by-product industries like tannery.Noting that Tanzania’s animals are

basically fed on natural vegetable materi-al, the official dared call locally producedmeat “organic”, saying that the meat istasty.

Although he could not reveal the gov-ernment’s strategy to improve the live-stock market, Mr. Temu said that skin andmeat processing industries would increasethe value chain for farmers.

Similar concerns about shortage of re-liable customers, lack of loans and tax dis-crepancy in the livestock business wereraised by traders interviewed at the mar-ket. One Mr Fadhil Maige took issue withinconsistency in taxation, saying “In Ilalamunicipality of Dar es Salaam the live-stock trading tax is 1,250/= per day, whilein Kinondoni we pay 1,500/=. The authori-ties should reduce the tax.”

Maige also complained of discrimina-

tion, bureaucracy and suspected corrup-tion in approving of loans to small scalelivestock farmers. The trader called on thegovernment to assist in promoting the live-stock industry.

On her part, the Pugu LivestockMarket Manager, Ms. Agnes Maiga saidthat the market receives an average of 400– 500 heads of cattle from the main live-stock producing regions of Shinyanga,Dodoma, Tabora, Singida, and Mwanza.The market also receives sheep and goatsand has a holding capacity of 3,000 sheepand goats.

In efforts to improve the market, hermanagement is planning to strengthen thelivestock information system for traders tocompare different market prices and to ed-ucate traders on livestock trading so thatthey can attract more foreign customers.

Meat processing hamperinglivestock sector

Documents

Kilimo Kwanza Issue 20