TANCOFF UN-SUPPORTED ACTION PLAN 2019-2028

Tanzania is surrounded by countries that provide markets for its agricultural commodities – especially rice and maize. These agro-give Tanzania a high comparative advantage in East and Central African trade. The export window helps to tip the agro-commodity market prices higher in favour of farmers (suppliers) due to increased demand. These export markets provide a lifeline for rural small-scale farmers, being part of a regional supply chain, having farmed these crops mostly using inputs obtained on credit from suppliers. Therefore, apart from making livelihoods from export revenues, the farmers also use the money to pay for the input credit loans – such as seeds, fertilizers, farm equipment hire services and labour, thus pushing money circulation around to activate the economy. However, export of these agricultural commodities is subject to Government approval, after satisfying itself of domestic food security, thereby allowing export of potential food surplus.

Decisions on Government’s export approval depend on the information it has at an instant. The longer the Government takes to have the right information on food situation countrywide, the longer it will take for it to decide on export approval. Favourable regional market dynamics (where prices for Tanzanian maize and rice are high in Kenya, Sudan, Congo, etc) are usually a snapshot in time – whose timing should perfectly match the Government export approval. Unfortunately, at least for a past couple of years/seasons, the Government has been receiving the countrywide food information later than regional agro-commodity price booms, thus allowing exports at a time when good prices and margins have been lost. This has had a negative impact on revenues for Tanzanian rural maize and rice farmers together with agribusinesses along the respective supply chain. It also affects unfavourably their repayment of debts from agro-input suppliers as well as funding of their access to basic socioeconomic services such as education, health and other livelihood utilities. Their contribution to Government revenue (payment of taxes) is also hampered due to erosion of profits.

TANCOFF UN-SUPPORTED ACTION PLAN 2019-2028

1 file(s) 210.95 KB

Download