Published On: Tue, Mar 29th, 2016

Agriculture in Tanzania: New avenues for large and small farmers to make money

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By Patrick Rwehumbiza

Riding on the quick success of an out growers’ rice scheme in the Southern Islands of Morogoro region, Tanzania hopes to attract more high value agricultural investments as a vehicle to lift millions of peasants from poverty.

Through the Public-Private-Partnership (PPP), the government is marketing a new model of smallholder farming that will guarantee handsome profits on investment as well as an attractive income for producers.

The plan is simple –leverage on the financial muscle of private investors while providing farmers unparalleled market opportunity. “This way we will be able to mechanize our farming and empower farmers who have for years lacked access to ready markets and suffered a vicious cycle of low commodity pricing,” explains Agriculture, Food Security and Cooperatives minister Stephen Wassira.

Mr Wassira gives the example of Kilombero Plantations Limited (KPL), a large scale rice project in Morogoro, saying the outgrower scheme there has more than tripled farmers’ income in a few years. “We want to build on the momentum by replicating this example.”

It is a position reinforced by Dr Sinare Sinare who chairs the Agricultural Council of Tanzania (ACT), which brings together farmers in the value chain across the country. He says a win-win situation for investors and farmers would remove existing suspicions on the real intention of large private investment in the sector.

The minister says the full impact of the smallholder schemes would be felt once a good number of investments lined up for implementation gain momentum. They include those coordinated under the Southern Agricultural Growth Corridor (SAGCOT).

Under SAGCOT, launched at a World Economic Forum summit in 2010, the government has earmarked thousands of hectares of fertile land for private investors.

SAGCOT was designed specifically to act as an inclusive, multi-stakeholder partnership to rapidly develop the region’s agricultural potential.

One of the signature PPP projects under SAGCOT is the Bagamoyo Sugar Infrastructure and Sustainable Community Development Programme (BASIC). It is a mammoth ethanol production project spanning over 22,000 hectares. Peasant farmers on the land that is grossly underutilized are expected to become successful cane growers.

“This scheme will be transformational. Partners are working to bring the project into fruition. It will be a game changer,” says Mr Wassira.

According to the minister, the investment will come with a sugar mill to process up to 60 per cent more cane than could be grown on its nucleus estate, thus creating the opportunity for smallholders in the surrounding settlements to become commercial cane outgrowers. The sugar mill is expected to produce brown sugar, ethanol and electricity to supply the national grid.

Some of the key financiers for the Bagamoyo project are the International Fund for Agricultural Development (Ifad) and the African Development Bank (AfDB).

IFAD’s country representative Mr Pichon Francisco says other than the immediate outgrowers, the Bagamoyo project will have a multiplier effect impacting thousands of other people in the service supply chain. Mr Francisco says that the project will cement the 30 decade-long relationship with state players to raise the living standards of peasant farmers and their families.

Mr Francisco said IFAD will not promote exclusive dependency on sugarcane cultivation in the programme area. “Instead we will seek to mainstream climate resilience and livelihood diversification in all smallholder investments to help manage climate risks and maximize benefits for smallholders.”

He also said IFAD will ensure that the programme meets global environmental as well as social standards. All technologies adopted under the programme focus on environmental sustainability and increased resilience to changing climate patterns.

Local authorities in the historical town of Bagamoyo also view the project as one that will help curtail high levels of poverty and youth unemployment. District Commissioner Mr Majid Hemed Mwanga is quick to assure that no families will be evicted from their land to pave way for the project.

“We have allocated land to the investor and the smallholder farmers will remain on their land around the project area. They will grow cane and supply to the company,” the administrator explained.

He said current estimates show that between 8,200 and 10,800 households, representing slightly more than half of the households in the programme area would directly benefit, raising their income 10-fold. Up to 90,000 others within a radius of 40km of the nucleus estate benefitting indirectly.

“The overall goal of BASIC is to contribute to inclusive growth and rural transformation by empowering villages to respond to the opportunities generated by the direct foreign investment … thus raising incomes, improving and diversifying livelihoods and sustainably transforming the rural economy,” the DC said. The project he said could help reduce national dependence on imported sugar.

According to Dr Sinare, the Agricultural Council of Tanzania prefers the outgrower model because returns are measurable in a short span of time. “With the rapid population growth and food scarcity, increasing smallholder production will secure our food security,” he said, lamenting that while Africa has 60 per cent of arable land, most of it was not being put into productive use.
“At the outgrower rice scheme in Morogoro, we have seen smallholder farmers raise their production speedily and now they are earning up to four times more due to a ready market in which they have a direct say,” Dr Sinare said.
“Working together will give farmers clout as well as easier access to skills development, knowledge, technology, financing and market access,” he notes.

Details show Eco-Energy, the firm running the project will implement the 14001 ISO standards, aiming for BONSUCRO certification.
BONSUCRO is an international multi-stakeholder non-profit organization that provides certification and sets sustainability standards in the sugar industry.

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