Africa Guardian

Theo Mushi
Tanzania has adopted “Kilimo Kwanza” strategy to modernize the agricultural
sector in order to increase the production of cash and food crops. It
targeted to give priority to five regions which lead in production of grains
which include Mbeya, Ruvuma, Iringa and Rukwa Corridor and the National Food
basket. It will enable Tanzania to meet one of the targets of MKUKUTA and
Millennium goal of reducing hunger and increasing food security. There will
also be an increase in export earnings from traditional and non-tradition
crops, livestock products, fishery and agro-forestry.
This years budget (2010/11) has allowed over Tsh 900 billion for the
agricultural sector which is near the target of 10 percent of the budget as
agreed by SADC member states in Maputo a few years ago.
The “KILIMO KWANZA” programme prepared by National Business Council and
Tanzania Private Sector Foundation in collaboration with key government
ministries is intended to complement the current 7 years agricultural sector
development programme (strategy) which had targeted to spend 82 billion over
a period of 7 years. It is being implemented at district level as District
Agricultural Development Programme (DADP) and Participatory Agricultural
Development Programme (PADP). Despite the increase in budget allocation
priority should be given to capacity at the district levels to have more
planners and extension officers to train farmers through demonstration
farms.
The efforts to develop the agricultural sector should go hand in hand to
develop the industrial sector. There is a lot of complementarity between the
two sectors. Industry depends on agricultural sector for raw materials.
Agriculture depends on industrial sector for agricultural machinery,
irrigation equipment, fertilizers, pesticides and veterinary medicine.
There is also a need to have more allocation for the Ministry of Regional
Administration and Local Government which coordinates the activities at
district levels. It has a responsibility to see that the funds allocation
for irrigation and other aspects of agricultural development are used
properly and conduct monitoring and evaluation of the implementation of
“KILIMO KWANZA” to see that the intended outcomes are realized. It is
equally true that in order to realize the goals of “KILIMO KWANZA” there is
a need for better funding of national and district large and small
irrigation schemes.
It is now a reality that the donors who made a commitment to give money for
ASDP have not disbursed the funds as they committed to do so. This means the
private sector will have to play a bigger role as investors in market
structures, agro-processing industries and large scale commercial farms
which will increase production of crops and create jobs in the rural areas.
It is truism to say that the goals of KILIMO KWANZA will be realized without
paying attention to small scale farmers who account over 90 percent of food
and cash crops in the country. It is a step in the right direction to
increase budget allocation to subsidize fertilizers, seeds and veterinary
medicine. Increasing allocation to the Strategic Reserves Agency and
Agricultural Inputs Fund will facilitate the realization of the goals of
KILIMO KWANZA. In targeting the small farmers to end dependence use of hand
hoe and instead to enable them to hire tractors and ploughs in a bid to
expand areas under cultivation in order to increase production of food and
cash crops. It is relevant to explore and expand sources of funding for
KILIMO KWANZA. As far as funding is concerned for the agricultural sector ii
is only the World Bank and International Food and Agricultural Development
(IFAD) which have committed to assist Tanzania in agricultural development.
Bilateral donors are adopting a position of ‘want and see’ before they make
good their promises to finance ASDP and KILIMO KWANZA.
The government needs to be commended for increasing allocation to
agricultural sector research on better seeds because this will increase crop
yields. But there should be a deliberate effort to see that information on
agricultural research and results is disseminated to small scale farmers by
extension officers who should be forced to leave their officers at the
district level and go to live with farmers and teach them how to conduct
modern farming practices.
There has been a ‘window’ in TIB to extend loans to farmers which operates
as a revolving fund. Sources say that only 70 percent of this fund has been
allocated to lending to small scale farmers although they constitute over 80
percent as producers of food and cash crops. This brings us to the case of
collateral for loans extended to the farmers. It is not realistic for the
government to have a credit guarantee scheme for small scale farmers and
this would consume nearly the whole budget because the number of small scale
farmers is big.
It is expected the Agricultural Development Bank is in final stages of
becoming operational to lend to farmers, fishing, livestock and
agro-forestry sub-sectors. It is important to learn from past mistakes of
dishing money to small entrepreneurs without educating them on the loan
facility and agri-business and giving them regular market information and
reliable markets as an incentive for them to borrow and increase production.
In the early years of independence nearly 50 years ago there was a National
Agricultural Credit Agency which gave loans to small scale farmers. The
colonial government officers only asked how many acres a farmers had and
gave Tsh 100 per hector so that a farmer with five acres got Tsh 500 which
was a lot of money at that time. There were no plans to monitor and evaluate
the impact of the loans and the funds were used by farmers to marry
additional wives and festivities. At the end the Agricultural Credit Agency
collapsed and it is because of this banks have shunned lending to the small
scale farmers.
Farmers should be sensitive to form producer cooperatives so that they can
borrow as a group to SACCOs. Small scale farming is not clearly mentioned as
a small or medium enterprise in the SME policy but it is part of SMEs and
also a private sector component. Therefore banks under the micro-financing
policy should start to lend to small scale farmers through SACCOs and
members will apply peer pressure to ensure high recovery of loans extended
to small scale farmers. It is time to evaluate the viability of floating
municipal bonds to raise money to develop per-urban modern farming in cities
like Dar es Salaam, Kibaha and Bagamoyo.
Cooperative and Community banks should be on the forefront to lend to small
scale farmers directly. The Property and Business Formalization Programme is
implemented in time it will be possible to give small farmers legal property
rights (title deeds) to be used as collateral for bank loans.
As for large scale commercial farmers and agro-processors TIC should give
sector specific incentives like the mining sector to waive taxes on petrol
or diesel used by tractors and other equipment needed by the investors in
that sector.
*Theo Mushi passed away in 2010. This article is as relevant to day and it
was when he wrote it.