Agriculture

A Future Secured

Agriculture

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A Future Secured

As a percentage of the country’s area, land dedicated to agriculture is below the continental average, although efforts are underway to develop certain regions. Climate and terrain affect the agricultural […]

As a percentage of the country’s area, land dedicated to agriculture is below the continental average, although efforts are underway to develop certain regions. Climate and terrain affect the agricultural potential of the various regions of the country, and this is directly related to the wellbeing of the areas’ inhabitants. The arid coastal and southern highlands experience some of the lowest income levels in the country, while residents of the central and northern regions have to deal with more acute malnutrition, according to a report by the International Fund for Agricultural Development (IFAD). Additional constraints on agriculture are related to periodic drought and flooding, creating extreme difficulties for food crop farmers who rely on their produce to a larger extent than cash crop farmers. Through the Southern Agricultural Growth Corridor of Tanzania (SAGCOT), which focuses on approximately one-third of the country, including Mbeya and Iringa, a major portion of the country should begin to enjoy improved agricultural practices. Inaugurated internationally in 2011, it is a comprehensive investment strategy that aims to create an efficient agrarian value-chain, and represents a new, more proactive engagement with the sector on the part of the government.

CASHING IN

The country’s main cash crops are cashew nuts, coffee, cotton, tea, and tobacco, as well as cloves and other spices from Zanzibar. The sector provides 65% of industrial raw materials and 30% of export earnings. However, insufficient investment in recent years has led to a generally inadequate innovation environment, and post-harvest losses for perishable products can run as high as 40%. Additionally, the lack of technologies related to irrigation is holding back production in the south, and improved storage facilities would go a long way toward the enhancement of export-oriented crops.

Horticulture is a sub-sector that was designated as a priority export driver in the National Export Strategy in 2008. The country enjoys a lush, diverse array of vegetables and fruit, of which less than 10% is processed. The potential for this sector to guarantee Tanzania’s food security, and consequently control inflation, in addition to providing high-quality produce for export, is clear. The Tanzania Horticultural Development Strategy 2012-2021 aims to define and exploit valuable regional and international markets for food exports.

FLOURISHING TRADE

Aside from opportunities to advance farming and cultivation methods, there are whole segments that have been largely overlooked to date. One such example is in floriculture, a high value area that has been extremely successful in countries such as Ecuador. There are plans to open flower farms in the Usambara, Iringa, Mbeya, Kagera, Arusha, Kilimanjaro, and Morogoro regions, with lowland flower farming potential in Tanga, Dar es Salaam, Mtwara, and Lindi, according to the Ministry of Agriculture. However, for export-driven, delicate products such as flowers, major investment is required to ensure that infrastructure is available. A ban on Tanzanian flowers being transported through Nairobi, stemming from a reported pest problem, was overturned in 2013, allowing producers to start rebuilding relationships with former clients. Floriculture now has a chance to gain ground.

The Ministry of Agriculture and Food Security offer a number of investment incentives specifically for the sector. These include zero-rated duty on capital goods and products such as fertilizer, pesticides, and herbicides, zero-rated VAT on agricultural exports and domestically produced input products, and reasonable corporate and withholding tax rates on dividends.

EVERY FIN IS POSSIBLE

Tanzania’s fishing prospects are also good, with huge potential for formal development. Over the past decade, fish and fishery product exports have dropped, and the sector was already contributing less than 3% to the national economy. Fortunately for Tanzania’s approximately 180,000 registered fishermen, recent developments show that international partners are willing to make committed investments to the industry. As part of the China-Africa Fishery Cooperation Plan, China plans to engage in the Tanzanian sector in order to realize its full potential, and estimates its potential worth at up to $6 billion annually. Over the course of 2013, discussions advanced, and in October the Tanzanian Minister for Industry and Trade, Dr Abdallah Kigoda, announced that a new market had been won in China for Tanzanian fish products. This is an important step for the industry, and signifies a renewed global appreciation of the quality of Tanzanian products, which could reverse the unimpressive development of the industry thus far.

Tanzania’s agricultural sector is overflowing with opportunity. And despite a notable level of technical inefficiency in methods of production and tools, it is just a question of time and money. With well-placed investment, the continued shrewd allocation of public funds to support food security initiatives, and effective partitioning of arable land, Tanzania has the potential to become a significant regional exporter of agricultural products. The refining of standards and quality control is creating a viable sector, and one that will play a key role in the country’s 2025 goal of raising the living standards of its citizens.

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