Africa Guardian

Pamoma Reporter:
For almost two centuries successive government interest in the clove
industry in Zanzibar has been promoted by the income wealth emanating from
the crop. For the farmers, the growing and marketing of the cash crop has
always known a heavy state control, sometimes bringing in boon and other
times doom.
From 1968 onwards, it has been the Zanzibar State Trading Corporation
(ZSTC) that has dominated clove marketing. For years, ZSTC was the “sole
buyer and exporter” of cloves, making the difference between the export and
purchase price a direct government revenue.
Even after ceding some grounds in recent years to allow other buyers, ZSTC
remains the main buyer. Supported by other government agencies, ZSTC also
helps to control and eliminate illegal clove trading. There is an active
government machinery lobbying farmers to sell their crop to ZSTC.
However, a cross section of farmers has been unhappy with prices offered by
the state agency. For years they have been smuggling their produce out of
Zanzibar as this offers them much better revenues. Using the new source of
information the internet provides, farmers know how to compare home selling
prices and the world market take. As a result, complains have been rife of
farmers being shortchanged. The market control also allows legitimate
private buyers to reduce their prices with farmers’ organizations crying
foul they are getting raw deals. As a consequence, smuggling has continued
to thrive.
Yet, despite the challenges facing the industry, Zanzibar cloves remain a
hot cake in selected markets worldwide. Cloves are a potential source of
wealth for farmers if able to cope with the market forces. By all
indications, at the moment all is not well with the industry.
What is it that is not going well?
It is a well known fact that clove production has declined in the isles
over the years. Several factors have been outlined to be the cause of the
decline: severe competition by foreign markets, aging plants, damage caused
by disease or pests and soil erosion, among others. Although, it would
appear multiple factors are attributed to the decline of the clove sector
in Zanzibar, the most decisive factor as research findings point out has
been government interference. It has had negative consequences by
contributing to lower producer prices compared to international markets and
inadequate or inferior input supplies to farmers. Further, research
findings point out that extension services are poor and cultivated clove
acreage is low due to government restrictions.
It seems the government has realized the best path to take in poverty
eradication is trying to rekindle the lost glory of the spice kingdom.
President Dr Ali Shein has been encouraging planting of new clove
seedlings, and there is refocused attention to the development of the
industry. He also recently announced a census for clove plants, something
that has not been done for decades. The state owned People’s Bank of
Zanzibar (PBZ) has increased its financing of ZSTC for buying cloves. The
developments augers well for the industry, but unfortunately these measures
are not enough. According to a 2010 Clove Advocacy Report by ZACPO it
emerged that restoring Zanzibar’s lost clove industry glory required the
reworking of the entire market system. Not by incidental or temporary
measures. Most of the recommendations made have not been taken heed of this
crucial, well substantiated advice. The report’s main conclusion called on
“the Government to accelerate the pace of deregulation of the clove
industry to give a new thrust in sector performance as projected under
market liberalization.”
The report which has been backed by experts and stakeholders called for
accelerating the pace of deregulation of the clove industry. Findings
pointed at a disbandment of ZSTC to allow for liberalization of the value
chain as the core measure to resolve the many challenges afflicting the
crop as reflected in the report’s conclusions and way forward below:
The stumbling block for implementations of the study recommendations seems
to be clove market law of 1985 and the congruent existence and mandates of
ZSTC. This means that the amendment of this law and disbanding of ZSTC
should be taken as a priority advocacy agenda in all subsequent engagements
between the Government and non state actors on this subject area. The
Government should be reminded of her commitments to implement
recommendations of the 2004 clove study and urged to take concrete actions
that will save the clove sector from further deteriorations. The
quantitative and qualitative evidence provided through this study should
complement the courteous effort to deregulate and subsequently liberalize
the clove sector for benefits of the people of Zanzibar. A detailed cost
benefit analysis of the ZSTC must be urgently commissioned to validate the
findings of this study and enable the well established public resolve to
rehabilitate the clove industry. As a matter of proceedings, such an
effort will require a coherent common national strategy that is clearly
articulated and adequately coordinated to be able to influence and first
track changes that the clove industry deserves as fast as it is recommended
by the current economic, social and environmental conditions. The
experience of major breakthrough in policy changes with Zanzibar Business
Council should be guiding the ensuing efforts for accelerating changes
envisaged in the clove industry. (The full report can be downloaded at
www.best-ac.org)
The Impact of Government Policy
Due to the dominant state presence in production and marketing of the
spices over the years, farmers may be inclined to think challenges
affecting them can only be solved by the government. The first stick used
by the state has been buying price control. So when ZSTC set the price at
Ths 3,500/- per kg and later on tops it up Tsh 15,000/-, farmers see this
as salvation.
Private buyers, who are afraid to invest substantive capital in the trade
because of market control by the state reluctantly watch prices set by ZSTC
and offer the same or slightly higher.
Farmers’ groups play little or no role in price setting and have a limited
position in the international market dynamics of the trade. Coffee, tea and
cotton farmers usually know the free market dynamics and prepare their
position. Clove farmers make a living under the mercies of the state. This
has been the case for almost two centuries. So long as the state protects
ZSTC’s position as the main buyer, private traders will not be willing to
invest substantial capitals in the crop.
The private buyers are businesses that have been given limited permission
to export cloves. A fully fledged policy on how they should operate and
invest in farmers would remove the burden of the government being the main
buyer and financier of the crops. This should be one of the best recipes
to rejuvenate the trade, but question is whether the state is ready to open
the market. So long as clove market is not liberalized farmers can hardly
have any guarantees that in the near future the price will follow
international market prices.
Farmers need to be better organized
In this age of science and technology only well informed farmers will
survive and take advantage of the market forces. Farmer groups must ensure
they have full access to market information about the crops they deal with,
at all stages from production to marketplace. Information is power and
internet nowadays allows for that access. It is government’s role to assist
farmer groups in using such new means of access to information relating to
the entire value chain of the clove crop, rather than running the market
mechanism. Certainly, if the government maintains its position in the
market as a trading entity, guarantees need to be there on how it will
foster its interests. In the information age, a nowadays much better
informed farmer community will demand for accountability, or seek its
trading channels independently, leading to smuggling.
One of the best informed and most vocal organizations defending the rights
for clove farmers is ZACPO. It has done a lot in gathering information and
by informing farmers over the years, but time has come for it to do more.
Organizing farmers at the grass root level, empowering them with direct
access to information and linking them up with truly progressive private
buyers who are willing to invest in farmers. Only such measures responding
to the reality of the information age will bring back the historical
vibrancy of the clove industry on the islands, ensuring a strong position
on the world market. The crop trade demands the level of transparency
experienced in the sale of coffee, tea and cotton.
A once sleepy village called Tandai in Kinore ward, located in Morogoro
Rural on the mainland, produces a modest quantity of cloves. Due to the
farmers being organized and selling together they are often able to
negotiate better prices than their Zanzibar counterparts. At the same time,
there is no state interference, only facilitation. That, as in any other
value chain, will restore a flourishing clove industry on the islands.
End