Agricultural Transformation in Tanzania: Challenges and Solutions

1. 13th Symposium on Development and Social Transformation Panel 9: Building Food SecurityThursday, April 20th (12:45-1:45pm)

2. 13th Symposium on Development and Social Transformation Panel 9: Building Food Security Agricultural Transformation: Tanzania’s Next StepAlba Struga

3. Tanzania:The Expanding Agricultural Market Alba Struga

4. Presentation Overview • Role of agriculture in Tanzania’s economy • Constraints to agricultural development • Case studies • Maize • Cashews • Flowers • Suggestions to improve agriculture

5. Agriculture in Tanzania • Accounts for 47% of GDP • Employs 75% of active labor force • Contributes to 51% of foreign exchange • Agricultural growth ~ 3.5% • Population growth ~ 2.8%

6. Constraints to Agricultural Growth • Low production, productivity and quality • Problems with infrastructure • Lack of access to support services • Lack of irrigated agriculture • Government constraints • Lack of agro-processing industries

7. Some Definitions • Traditional export crops • Coffee, cotton, tobacco, sisal, cashew • Non-traditional export crops • Fruits, vegetables and flowers • Cash value crops • Coffee, sugar cane, tea, cashew • Food crops • maize

8. Maize Production • Principal staple food crop • Grown in 44% of food crop land • National growth 1958-1998 2.4% per year, 0.3% less than population growth • The last five years show a deficit in maize

9. Constraints to Maize Production • Lack of credit facilities • Insufficient and inadequate inputs • Lack of storage facilities • Lack of collaboration among farmers • Lack of government support • Not enough resources to visit all small farmers • High transaction costs • Unfavorable trade policies for small exporters

10. Cashew Production • Source of income for 250,000 small farmers • Grows on poor soil • Tolerates drought conditions • 28% of global raw nut exports in 1990-1998 • Export earnings rose from $ 4 millions in 1990 to $107 million in 1998

11. Constraints to Cashew Production • Deterioration of export quality • Increasing production costs • Small number of buyers (India) • Emergence of new competitors (Vietnam) • Lack of domestic processing • Institutional constraints • High local and national taxes • The Cashew Board of Tanzania

12. Flower Seed Production • Flower seed production is replacing coffee production in northern Tanzania • 300 coffee growers switched to flowers • Easy to grow • Could be harvested twice a year • No artificial fertilizers

13. Constraints to Flower Seeds • Other major competitors (Kenya) • Balancing between cash and food crops • Land scarcity

14. Suggestions • Improvements in access to markets • Improvements in transportation infrastructure • Better access to inputs & credit • Diversification toward non-traditional export products (vegetables, flowers and fruits) • Vertical integration into processing industry • Organization of small farmers • Trade policy and regulatory environment

15. 13th Symposium on Development and Social Transformation Panel 9: Building Food Security Policy And Action Towards Food Security In TanzaniaJames Abraham

16. Food Security in Tanzania Policy & Sustainability

18. Cooperative Model • “Unionizing” of farmers, develops purchasing power (econ. of scale) • Develop relationships w/ Banks • Poor Legacy of Cooperatives • More isolated farmers are left out

19. Integrated Producer Scheme • Farmers enter into contractual distribution pipeline • Private companies control some to all of processing, transport, & marketing • Potentially harmful to farmers

20. IPS – Example Markets

21. Problems • Cash-crops vs. Staple crops • Govt. promoting international competition • Capital oriented agriculture, leaves poor in dark.

22. 13th Symposium on Development and Social Transformation Panel 9: Building Food Security The Agricultural Sector Of ArgentinaMichael Anthony Lagiglia

23. Argentina’s Agricultural Sector

24. Agricultural Sector overview • Argentina based its first economic success on agriculture in the late 19th century. • 60 Percent of all exports • One of the main grain producers • With a population of 40 million, Argentina produces enough food for 300 million • Recently, Argentina’s biggest prospect for growth has been in its agriculture sector.

25. Relative size in grain exports

26. Argentina Gross Domestic Product Growth by Sector, 1997 - 2005

28. Comparative Advantage • Argentina has few competitors in Southern Hemisphere • Temperate climate ideal for agriculture • Sector is free of subsidies • Few farmers use chemical products • Livestock are mainly grass-fed • Increasing market share in upscale foreign demand – higher margins

29. Growing regions

30. Wine industry • In 1987, exports accounted for 1% of output. • By 2003 they amounted to 12% of output • Multinational investment • Credit problems • Infrastructure

31. U.S. Relationship

33. Positive Long-run Outlook • Growth of large-scale commercial farms • Establish international market channels • Continued MNC investment • Closed gaps in corn yields • Development of internal waterways • Demand from China • US and EU agri-sector support programs? • FTAA ?

34. FTAA welfare effects

35. Negative Outlook • Poor infrastructure • Truck transportation subject to oil-price risk • Domestic storage capacity shortfalls • Inadequate credit system • Commodity prices? • Climate change?

36. Questions?

37. 13th Symposium on Development and Social Transformation Panel 9: Building Food Security Thursday, April 20th (12:45-1:45pm)