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THE UNITED REPUBLIC OF TANZANIA

MINISTRY OF AGRICULTURE, FOOD SECURITY AND COOPERATIVES (MAFC)

Agricultural Sector Review (ASR) and Public Expenditure Review (PER) for FY 2011/12

Final Report

March, 2012

Prepared by the TABLE OF CONTENTS

ACKNOWLEDGEMENT...... viii EXECUTIVE SUMMARY...... ix 1. INTRODUCTION...... 1 1.1 Background...... 1 1.2 Objectives of the 2011/12 ASR and PER...... 1 1.3 Approach and Methodology...... 2 1.4 Report Layout...... 3 2. THE STRATEGIC FRAMEWORKS FOR AGRICULTURE...... 4 2.1 Introduction...... 4 2.2 General Strategic Frameworks...... 4 2.3. Agricultural Sector Specific Programme Frameworks...... 6 2.4 Institutional Framework...... 11 2.5 Strategic Issues for the Way Forward...... 13 3. Implementation of Kilimo Kwanza...... 14 3.1 Assessment of Implementation Progress...... 14 3.2 Lessons and Key Issues for Way Forward...... 14 4. NEW INITIATIVES...... 38 4.1 Introduction...... 38 4.2 Priorities of the New Initiatives and Synergies/Complementarities with the ASDP 38 4.3 Coordination of many development initiatives in the agricultural sector...... 43 4.4 Key Recommendation...... 45 5. AGRICULTURE SECTOR PERFORMANCE...... 46 5.1 Introduction...... 46 5.2 Macro-economic Performance...... 46 5.3 Agricultural Sector Performance...... 48 5.6 Recommendations...... 54 6. SECTORAL CONTRIBUTION TO FOOD SECURITY AND EMPLOYMENT...... 55 6.1 Introduction...... 55 6.2 Food Production and Productivity...... 56 6.3 What is the Food Security Situation in the Country?...... 57 6.4 Employment Status of the Agriculture Sector...... 60 6.5 Recommendations to Improve Food Security Situation and Employment in the Agricultural Sector...... 64 7. TRANSFORMATION OF SUBSISTENCE TO COMMERCIAL FARMING...... 65 7.1 Conceptual Framework...... 65 7.2 Rationale and Viability of Commercial Farming...... 65 7.3 Enabling Conditions for Transformation of Subsistence Farming to Commercial Farming...... 66 ii 8. PUBLIC EXPENDITURE REVIEW...... 69 8.1 Introduction...... 69 8.2 Trends of nominal versus real actual expenditure for the ASLM...... 69 8.3 Budget Performance in the Agricultural Sector...... 70 8.4 Five-year Assessment of the Trend of the Sector’s Share of the Budget...... 76 8.5 Comparison of budgeted versus actual expenditure for the major budget items of MAFC...... 78 8.6 Does the Increasing Spending on the Agricultural Sector Translate into Increased Performance of the Sector?...... 80 8.6 Assessment of Value for Money for DADPs Projects...... 81 8.7 Emerging Recommendations...... 85 SELECTED REFERENCES...... 87 Annex 1: List of People Consulted at National Level...... 91 Annex 2: List of people Consulted at District Level...... 93 Annex 3: List of Agricultural Sector Frameworks...... 95

LIST OF TABLES

Table Page Table 1.1: Districts/LGAs Visited for the ASR and PER 3

Table 3.1: Assessment of Kilimo Kwanza Implementation 27

Table 1: Assessment of Kilimo Kwanza(KK) Implementation 27

Table 4.1 Comparison of Main Features of ASDP, CAADP and 44 SAGCOT

Figure 5.1: The Trend in National Income and GDP: 1999-2010 47

Table 5.1: Trend of Economic indicators, 2002 – 2010 47

Table 5.2: Changes in productivities of sample food crops1 49

Table 5.3: Cash Crops Production 2007-2010 (Tonnes) 50

Table 5.4: Livestock Production (2005/06-2009/2010) 50

Table 5.5: Fisheries Production Trends 51 Table 5.6: Fish Exports 51 Table 6.1: Mainland Food Supply Analysis and Self Sufficiency 58 Ratios Table 6.2 Under-employment by persons by sectors and sex (2006) 61

1 DASIP Annual Reports, ASDP Evaluation Reports, Calculations by the ASR/PER 2011/12 Team iii Table Page Table 8.2: Approved Budget versus Actual Release of Funds for the 71 ASLM (Billion TZS)

Table 8.3: Approved Recurrent Budget versus Actual Release of 73 Funds for the ASLM (Billion TZS)

Table 8.4: Approved Development Budget versus Actual Release of 75 Funds for the ASLM (Billion Tshs)

Table 8.5: Five-year Assessment of the Composition of the Sector’s 77 Share of total Budget

Table 8.6: Comparison of budgeted versus actual expenditure for 79 the major budget items of MAFC

Table 8.6: Comparing the Trend in Agricultural GDP versus Budget 81 Allocations Table 8.7: Cost Assessment of DADPs Projects in Selected Councils 83 Table 8.8: Assessment of Realizable Benefits from DADPs 85

LIST OF FIGURES

Figure Page Figure 5.1: The Trend in National Income and GDP: 1999-2010 Figure 6.1: Real Growth rates of Agricultural Sector (2000-2010) 56 Figure 1.2: Tanzanian production indices, 1970–2007 (1999–2001 57 = 100) Figure 6.3: SSR in Mainland Tanzania: Actual Vs Targets 58 Figure 6.4: Status of Under-Five Nutritional Indicators 60 Figure 6.5: Employment Share of Agriculture 61 Figure 6.6: Under-employed persons by area and Sex, 2006 (%) 62 Figure 8.2: Trends of the Nominal Expenditure of the ASLM (TZS 70 Billions) Figure 8.3: Trend in Real Expenditure of the ASLM (TZS Billions) 70 Figure 8.4: Budget Performance (% of approved funds released) for 71 ASLM 2006/07 – 2010/11 Figure 8.5: Performance of the Recurrent Budget for the ASLM 73 Figure 8.6: Performance of the Development Budget for the ASLM 75 Figure 8.7: Comparing Growth of the National Budget with 77 Allocations to the Agricultural Sector Figure 8.7: Comparing Percentage Growth Between the Budget 80 Allocations and Agricultural GDP Figure 8.8: Trend of Expenditure on DADPS (TZS) 81

iv LIST OF ABBREVIATIONS AND ACRONYMS A-CBG Agriculture Capacity Building Grant ACT Agricultural Council of Tanzania A-EBG Agriculture Extension Block Grant ADI African Development Index AfDB African Development Bank AGITF Agricultural Input Trust Fund AIDS Acquired Immune Deficiency Syndrome AIS Agriculture Innovation System AJIR Annual Joint Implementation Review AMP Agricultural Marketing policy AMS Agricultural Marketing Strategy ASDP Agricultural Sector Development Programme AGRA Alliance for a Green Revolution in Africa ASDS Agricultural Sector Development Strategy ASLMs Agricultural Sector Lead Ministries ASR Agriculture Sector Review BOT Bank of Tanzania CAADP Comprehensive Africa Agriculture Development Programme CBO Community Based Organisation CDG Capital Development Grant CDP Cooperative Development policy CMT Council Management Team CRDB CRDB Bank PLC (Cooperative and Rural Development Bank) CORDEMA Client Oriented Research and Development Management Approach DADG District Agriculture Development Grant DADP District Agricultural Development Plan DALDO District Agriculture and Livestock Officer DASIP District Agricultural Sector Investment Project DC District Council DCC District Consultative Committee DED District Executive Director DFT District Facilitating Team DIDF District Irrigation Development Fund EAC East African Community EACARDP East African Community Agricultural and Rural Development Policy EPA Economic Partnership Agreement ERG EcomResearch Group DPLO District Planning Officer DPP Department of Policy and Planning FAO Food and Agriculture Organisation FBO Faith Based Organisation FFS Farmers Field School FGD Focus Group Discussion FPI Food Production Index FYDP National Five Year Development Plan GBS General Budget Support GDP Gross Domestic Product HIV Human Immune Deficiency HBS Household Budget Survey GOT Government of Tanzania ICC Inter-Ministerial Coordinating Committee

v ICT Information Technology IFMS Integrated Financial Management System

ILFS Integrated Labour Force Survey ISTA International Seed Testing Agency Kilimo KILIMO KWANZA Kwanza LGAs Local Government Authorities LGMD 2 Local Government Monitoring Database version 2 LGCDG Local Government Capital Development Grant LGTP Local Government Transport Programme MAFC Ministry of Agriculture, Food Security and Cooperatives M&E Monitoring and Evaluation MIT Ministry of Industry, and Trade MARTI Ministry of Agriculture Research and Training Institute MDGs Millenium Development Goals MIVARF Marketing Infrastructure, Value Addition, and Rural Finance MKUKUTA Mpango wa Kukuza Uchumi na Kupunguza Umaskini Tanzania MLDF Ministry of Livestock Development and Fisheries MoFEA Ministry of Finance and Economic Affairs MoWI Ministry of Water and Irrigation MTEF Medium Term Expenditure Framework MVIWATA Muungano wa Vikundi vya Wakulima Tanzania NARC National Agricultural Research Centre NBC NBC Bank Ltd(National Bank of Commerce) NCC National Cooperative Commission NEPAD New Partnership for African Development NFRA National Food Research Agency NFT National Facilitating Team NGO Non-Government Organisation NMB National Microfinance Bank NBS National Bureau of Statistics NSC National Steering Committee OC Other Charges OECD Organisation for Economic Cooperation and Development PER Public Expenditure Review PMO-RALG Prime Minister’s Office- Regional Administration and Local Government PRS Poverty Reduction Strategy SACCOS Savings and Credit Cooperative Society SADC Southern Africa Development Community SAGCOT Southern Agriculture Growth Corridor of Tanzania SGR Strategic Grain Reserve SIDO Small Industries Development Organization SSR Self Sufficiency Ratio TCCIA Tanzania Chamber of Commerce and Agriculture TASFIP Tanzania Agriculture and Food Security Investment Plan TDV 25 Tanzania Development Vision 2025 TFA Tanzania Farmers Association TIB Tanzania Investment Bank VAT Value Added Tax TNBC Tanzania National Business Council TOSCI Tanzania Official Seed Certification Institute

vi TZS Tanzania Shilling USA United States of America USDA United States Department of Agriculture VEO Village Executive Officers VETA Vocation Education and Training Authority WAEO Ward Agriculture Extension Officer WFT Ward Facilitating Team WFP World Food Programme WRC Ward Resource Centre WRS Warehouse Receipt System WTO World Trade Organisation ZARDI Zonal Agricultural Research Development Institute

vii ACKNOWLEDGEMENT

The Agriculture Sector Review and Public Expenditure Review (ASR-PER) for the financial year 2011/12 had the overall objective of assessing the performance of the agricultural sector and determine the best synergies and complementarities amongst sector initiatives in the implementation of ASDP. The review sought to assess how the sector initiatives were contributing to the performance of the sector on one side; and how the sector budget and expenditure performed during the financial year 2010/11.

We are grateful to the Ministry of Agriculture and Cooperatives (MAFC) for commissioning EcomResearch Group to prepare the Agriculture Sector Review and Public Expenditure Review (ASR-PER) for the financial year 2011/12. In this exercise, EcomResearch was supported by the Agricultural Sector Lead Ministries (ASLMs) counterpart staff.

In particular we extend our special thanks to Director of Policy and Planning, Mr. Emmanuel M. Achayo and Assistant Director of Planning and Budget Mr. David Biswalo, Ministry of Agriculture Food Security and Cooperatives (MAFC) for their facilitation efforts that really enabled the review to be completed smoothly.

We thank the EcomResearch consultancy team for its tireless efforts in completing the review. The team was led by Prof. Beatus A.T. Kundi with other members being Dr. Deograsias Mushi, Mr. George Mkude, Mr. Frederick Yona, Mr. Isaac Mkilania and Mr Attilio Mohele. It also included Mr. Fikiri Katiko and Mr. Stephen Michael as counterpart staff from the ASLMs.

The study benefited enormously from the national agricultural stakeholder workshop, which was organized by MAFC. The comments by participants from the Government, Development Partners and private sector and other stakeholders significantly helped to reshape the report. We really appreciate for these contributions.

We wish to thank the District Executive Directors and District Agricultural Development Officers (DALDOs) and other staff in the Local Government Authorities of Bukoba Rural, Kigoma Rural, Bahi, Kiteto, Moshi Rural, Temeke, Mvomero, Mufindi, Mbarali and Lindi for their dedication and support. We appreciate the cooperation of the villagers and community groups which we interviewed even at short notice. We thank them most sincerely.

We also extend our deep appreciation to the key informants who provided important information on DADPs projects and their views on the performance of the sector and made suggestions on how best to improve it.

Dr. Deograsias P. Mushi Chairman, EcomResearch Group Ltd

viii EXECUTIVE SUMMARY

1. Introduction

Routinely, annual reviews of the performance of the Agricultural Sector in Tanzania, including budget and expenditure trends, are carried out to assess the progress made with respect to the set sectoral goals and targets. The results of the reviews lead to appropriate recommendations for improvement. Accordingly, this report constitutes the year 2011/12 Agricultural Sector Review (ASR) and Public Expenditure Review (PER).

Preparation of the report involved two broad types of analysis. The first is assessment of the general performance of the Agricultural Sector with regard to all the major sub-sectors while the second part of the analysis dwelt with Public Expenditure Review of the Sector. This involved assessment of the sector spending in line with sector priorities, sector allocations against budget and the sector’s share of the total national budget.

The study team visited ten randomly selected LGAs that included districts with crops, livestock, fisheries, marketing and irrigation activities. The councils included Temeke Municipal Council, Lindi District Council, Moshi District Council, Kiteto District Council, Kigoma District Council, Bukoba District Council, Mvomero District Council, Mufindi District Council, Bahi District Council and Kigoma District Council.

From each selected council, two sites were visited to assess the value for money of selected projects under DADPs in addition to in-depth discussion with the district management team, particularly the District Agricultural and Livestock Development Officer (DALDO).

The 2011/12 ASR/PER report is organised in eight chapters. Chapter 1 introduces the report, providing the background, objectives of the ASR and PER and the methodology used. Chapter 2 reviews the major generic and specific strategic frameworks guiding the development of the sector. Chapter 3 reviews the implementation of the Kilimo Kwanza Resolve, pointing out the main achievements and challenges being faced. Chapter 4 analyses the new initiatives in the sector – with a focus on their synergies and complementarities with the ASDP. Chapter 5 assesses the performance of the Agricultural Sector with a focus on 2010/2011. Chapter 6 assesses the contribution of the Agricultural Sector to food security and employment. Chapter 7 explores effective ways for spearheading the transformation of subsistence agriculture to commercial farming. Chapter 8 presents the public expenditure review for 2010/11.

2. The Strategic Frameworks for Agriculture

Since independence, the Government has implemented strong overarching policies and strategic frameworks that have been driving performance and investments in the agricultural sector. These can be divided into General Strategic Frameworks which principally include the Tanzania Development Vision 2025, operationalized by the National Strategy for Growth and Reduction of Poverty II (popularly known as MKUKUTA II), the First Five Year Development Plan (FYDP I) for 2011/12 to 2015/16 and the Millennium Development Goals (MDGs);and Sector Specific Programme Frameworks which are many but the main ones include the Kilimo Kwanza Resolve, the Agricultural Sector Development Strategy (ASDS), the Agriculture Sector

ix Development Programme (ASDP), the Agricultural Marketing Strategy (AMS) and the Livestock Development Strategy (LSDS). In addition, there are the new major regional and international driven initiatives including the NEPAD sponsored CAADP, Tanzanian Public/Private Partnership sponsored SAGCOT, USA sponsored Feed the Future and the Bread Basket Initiative of AGRA.

The ASR concludes that that Tanzania has a set of good strategic and specific frameworks to guide the rapid and viable development of the sector. But the challenge now is to implement them as fully, timely and efficiently as possible. There is an urgent need to really work out an overarching, integrated, public-private, coherent and workable implementation coordination mechanism that is flexible enough to encompass the new initiatives in the sector.

3. Implementation of Kilimo Kwanza

The ASR assessed the extent to which the Agriculture Sector Lead Ministries (ASLMs) were implementing the relevant tasks in the Kiimo Kwanza Resolve. Generally, it has been established that the ASLM have implemented quite a significant number of Kilimo Kwanza tasks. By implementing the ASDP through the DADPs, districts were to a large extent implementing the aspirations of Kilimo Kwanza.

The ASR team has, however, observed that the concept of Kilimo Kwanza is not well internalized by many stakeholders. People need to be made to understand that Kilimo Kwanza is not the sole responsibility of the ASLMs. Rather, it is the responsibility of every one – at all levels and in all government sectors. It is also for both the public and private sectors. Therefore, there is a need for an effective communication strategy for Kilimo Kwanza. There is also a need for monitoring and evaluation arrangements for Kilimo Kwanza. These arrangements must be adequately harmonized and linked with those of the other frameworks including ASDP.

4. New Initiatives

The ASR has assessed the the investment priorities of each of the new initiatives in the Agriculture Sector and the extent of synergies and complementarities of each initiative with ASDP to enable better planning and coordination of resources. The major new initiatives are SAGCOT, CAADP Investment Plans, Feed the Future & Bread Basket Initiative.

SAGCOT stands for the Southern Agricultural Growth Corridor of Tanzania, an initiative of an international public-private partnership launched at the World Economic Forum on Africa in May, 2010 in Dar es Salaam.

CAADP stands for the Comprehensive Africa Agriculture Development Programme, an initiative of the African Union’s New Partnerships for Africa’s Development (NEPAD), adopted by the Heads of State and Government in Maputo, Mozambique in 2003. In Tanzania, this initiative is to be guided and resourced through the Tanzania Agriculture and Food Security Investment Plan (TAFSIP) and its implementation will be through an expanded ASDP.

The Feed the Future is part of the implementation of the U.S. Government Global Hunger and Food Security Initiative. A similar initiative is the Bread Basket Initiative that is being promoted by the Alliance for a Green Revolution in Africa (AGRA) with a

x strategy of identifying and selecting geographical areas with potential for greater returns in agricultural productivity and then providing holistic support for the selected areas thus creating effective and sustainable ‘bread baskets.’

The country is expected to see an increased number of agribusiness development initiatives in the coming years as more emphasis is given to the agricultural sector. However, coordination has often been weak, resulting in duplication of activities and less than optimal allocation of resources. Improved coordination of agribusiness development initiatives is vital in order to create synergies, share lessons and good practices, and optimise resource allocation. It is encouraging to note that the planned TAFSIP Management and Coordination structure, if well implemented and enforced, effectively provides a framework for a national coordination mechanism for all the major initiatives in the sector.

Clearly the overall goal of these initiatives is similar to that of ASDP but we have some differing emphasises in the approaches used which actually is healthy. What is crucially needed for now is to have an overarching coordination and monitoring and evaluation framework that is agreed and owned by the key parties with the Government providing the leadership. The TAFSIP Management and Coordination structure provides a useful base that can nicely build on what is there for ASDP and providing practical linkages to the structures that are coordinating the other initiatives.

5. Agriculture Sector Performance in 2010/2011

The ASR/PER team assessed the performance of the agriculture sector performance with a focus on the year the 2010/11, considering crops, livestock, fisheries, marketing, input distribution and financing, irrigation and private sector participation as the focal issues. Before assessing the sector’s performance, macro-economic performance was reviewed followed by an assessment of the sector’s contribution to GDP.

The growth in agricultural economic activities increased by 4.2% in the year 2010 compared to 3.2% increase in 2009 .The growth was contributed by the high crop production due to favourable weather condition in the 2009/10 season, better irrigation infrastructure and Government effort to increase subsidy in agriculture inputs.

Fisheries economic activities showed a growth of 1.5% in 2010 compared to 2.7% growth in 2009. The decline was contributed by the decrease in fish demand and fish products in the export market; decrease in fish production especially those from the lakes due to destruction of environment, illegal fishing, and the use of poor fishing equipment. The contribution of fishing in the National GDP remained 1.4% same as in the previous year 2009.

There were improvements in the legal and regulatory framework to ensure that activities of the sector are carried out legally and in a regulated manner in order to provide a level playing field for all its actors and ensuring product quality and standards in order to avoid jeopardising the country’s participation in regional and international markets, preventing the spread of diseases, protecting consumers interests, protecting the environment, land degradation, overfishing and overstocking. During the period under review, there were preparations and review of draft legislations of the Agricultural Resources Management, plant Genetic resources for Food and Agriculture. Four crop laws were gazetted for implementation of crop

xi industry legislations for tea, pyrethrum, cashew nut and sugar. Regulations were prepared for the user Cashew nut Export Levy. The Livestock Identification, Registration and Traceability Act No 12 of 2010 and the Grazing and Animal Feed Resources Act No 13 of 2010 were enacted. There are still gaps in policy, legal and regulatory framework regarding land, financing, insurance, contract farming, valuation of agricultural land, enforcement of quality and standards, weights and measures, which hinder the sector from developing to its full potential.

The ASLMs/LGAs extended necessary support to the sector through the provision of critical inputs (i.e., fertilisers, improved seeds, improved seedlings, improved bulls and heifers, agrochemicals, disease control drugs), facilitated the availability of farm machinery and implements, financed production and marketing infrastructure and value addition facilities; supported cooperatives to manage WRS and to acquire finance from financial institutions; trained farmers in classrooms, shamba darasa and also through lead farmers; trained power tiller operators, prepared and distributed guidelines for extension staff; provided advisory and technical backstopping directed towards specific intervention areas such as selected irrigation schemes, crops, livestock and fisheries to enhance production, productivity and food security.

As the result of the ASLMs’ and LGA efforts and support, the performance of the agricultural sector has improved significantly. The production of food crops, cash crops, and livestock generally increased in 2010/2011. However, fisheries production did not increase, mainly because of limited production capacities, illegal fishing and decline in the export market.

The overall assessment of the ASR team is that ASDP is achieving the objectives of enabling farmers to have better access to and use of agricultural knowledge, technologies, marketing systems and infrastructure, all of which contribute to higher productivity, profitability, and farm incomes and promote private investment based on an improved regulatory and policy environment. The challenge for the future is to spread widely the responsiveness of the farmers to the new technologies and practices so that many adopt them and become more productive, resulting in greater increase in production and productivity.

As key priorities for the future, the ASR teams recommends calculated, well thought and managed investments in farmers’ education, input supply, financing, expansion irrigation facilities, marketing systems, private sector active participation and farmer friendly legal and regulatory environments.

6. Sectoral Contribution to Food Security and Employment

Food security exists when all people, at all times, have physical, social and economic access to sufficient, safe and nutritious food which meets their dietary needs and food preferences for an active and healthy life. Food security has three key dimensions, namely, food availability, food access, and food utilization.

One of the indicators of food security is the Food Supply and Self Sufficiency Ratio (SSR). SSR is in percentage terms. It is <100 for deficits, 100-120 for self- sufficiency and =>120 for surplus status. Analysis of trend data for this indicator indicates that in recent years, Tanzania has been experiencing food self sufficiency situation. The last time the country experienced food deficit was in 2003/04 where SSR stood at 88%. However, there are two major issues. First, food security situation in Tanzania varies from one region to another and from one season to xii another. Some perennial pockets and semi-arid central regions have been constantly being suffering from food shortages, particularly the coastal regions of Pwani, Lindi, Mtwara and Tanga, together with the semi-arid central regions of Dodoma and Singida and some parts of Shinyanga, Morogoro, Kigoma and Mara. On the other hand, the southern highland regions of Rukwa, Mbeya, Iringa, and Ruvuma have been constantly experiencing food surpluses. Secondly, despite the recorded impressive SSR performance in recent years, the set targets have not been met.

Statistics indicate that the share of employment in the agricultural sector has been declining over time, from 90% in 1970 to 77% in 2006. This decline is attributed to the rapid expansion of other sectors like mining and service. Despite this decline, the sector still employs the vast majority of the total labour force. The sector accounts for about 23% of the GDP at 2001 constant prices. Of the total labour force in agriculture, 55% are women.

The dominant mode of employment in agriculture is self-employment with households operating smallholdings, using little modern technologies, little irrigation and wholly dependant on rain, hence low productivity and serious underemployment.

There are three critical issues need attention in order to promote employment creation in the agriculture sector: In general, the agricultural and rural sector experiences high underemployment due to seasonality nature of the sector. The high reliance of the sector on rainfall which is increasingly uncertain significantly leads to underemployment in the sector. Low agricultural productivity is due to low level of agricultural mechanization and inputs.

On food security, it is recommended continue with further investment of efforts to improve the performance of the agriculture sector. A better performing sector will improve the availability of food in the country. To improve access to food, there is need to continue with efforts to improve access of producers and traders to agricultural markets by improving rural market facilities and infrastructure.

On enhancing employment in the agricultural sector, it is recommended to continue and enhance the on-going efforts on irrigated farming, increased productivity through improved use of agriculture implements, quality seeds, fertilizers and pesticides with special emphasis on effective management of the channelling these at local levels and improving the support for the development of off-farm activities to in a more organized manner.

7. Transformation of Subsistence to Commercial Farming

The characteristics of subsistence agriculture are that it is principally carried out for family survival — with no or little extra outputs available for sale, while commercial farming is producing for a known market at a calculated profit. TDV2025 underlines the tradability of agricultural production if agriculture is to propel the countries development. This is why one of the key objectives of ASDP is the creation of a favourable climate for commercial activities. The Tanzanian government has also undertaken the creation of an enabling environment for the transformation of subsistence agriculture to commercial farming through improved policies to promote market development and regulatory framework for private sector development.

The long route to transforming agriculture begins with empowering farmers to produce more than they consume and for small farms this is achieved by use of

xiii modern agricultural inputs and better farm management practices. Unfortunately Tanzanian farmers use very little inputs. In 2010/11, it was estimated that on average a smallholder farmer used about 79.5 kilograms of fertilizers per hectare compared to recommended rates of 250 kilogrammes.

Unsurprisingly, food crop productivity has been very low. In the six years (2001/02– 2006/07) average food crop productivity was 1.7 tonnes per hectare, which has risen to 2.1 tonnes per hectare in 2007/08 -2009/10, whereas good management and optimal fertilizer use should result in yields of 3.5-4.2 tonnes per hectare.

Once farmers have adopted productivity enhancing technologies, they have to be assured of postharvest control measures, storage and marketing at reasonable prices. Disincentives through taxation, poor physical infrastructure and poor market information as well as unpredictable GoT interventions for certain food and livestock products must be removed.

Commercialisation of fishing operations is constrained by a shortage of modern fishing equipment to enable fishermen to reach deep waters, inadequate regulatory and supervisory capacity, stiff quality and sanitary standards imposed by importing countries and lack of capital for local fishermen to make medium to large investments in fishing operations.

A well-developed network of rural roads and trunk roads as well as railways is essential for promoting commercial agriculture as it facilitates cost-effective movement of agricultural products from farmers to markets and agricultural inputs and other goods from suppliers to the farmers. Communication facilities allow farmers to have access to information regarding prices and market conditions for crops, livestock, fish and other products.

Addressing the availability of markets for the crops, fish and livestock products produced in Tanzania and building the linkages between markets and agriculture producers are key to effective commercialization.

Making various business development services available to the farmers and stakeholders on the various agricultural value chains can help build the capacity in critical production and entrepreneurship skills for enhanced commercial operations.

Development of model Input-Output Profiles to enable farmers to know the full cost of their inputs including labour and in relation to the value of the expected output is necessary to help them (the farmers) think in terms of costs, revenues and profits.

It is also crucial to facilitate availability of medium and long term finance for agriculture to enable able and willing farmers to undertake investments of a medium to long-term nature. Currently too few financial institutions in the country provide medium/long-term financing for the agriculture sector.

8. Public Expenditure Review

The Public Expenditure Review (PER) has assessed the following: trends in actual nominal versus real expenditure in the agricultural sector for the past five years; analysis of the budget performance for the past five years including recurrent and development expenditure; trend of the agricultural sector share versus other sectors in budgetary allocation, comparison of budgeted versus actual expenditure for the major budget items of MAFC; comparison of the performance of the agricultural

xiv sector versus resource allocation, and assessment of value for money for the DADPs funds.

Trends of nominal versus real actual expenditure for the ASLM

In nominal terms, expenditure on the agricultural sector has increased by more than six times for the past five years – i.e. from TZS 81.9 billion in 2006/07 to 362.66 in 2010/11. This represents an average annual growth rate of 86 percent. However, in real terms, expenditure on the agricultural sector has increased from TZS 51.6 billion in 2006/07 to TZS 191 billion in 2010/2011. Thus, public expenditure on the agricultural sector has been increasing in both nominal and real terms for the past five years. The increased spending has led to increased outputs of the sector in line with the strategic public investments in the agricultural sector in Tanzania. In particular, with the onset of KILIMO KWANZA initiative, actual expenditure on the sector, through MAFC, increased from TZS 106.5 billion in 2008/09 to 270. 96 billion in 2010/11; this represents a nominal increase of 154.4 %, or a real increase of 129.1% in a period of three years. This is rather an outstanding achievement in the history of the development of the sector during the decade.

Budget Performance in the Agricultural Sector

Budget performance refers to the proportion of the approved funds released. Overall, in the past five years, budget performance for the agricultural sector has been improving. Release of approved funds or budget performance increased from 41.71% in 2006/07 to 74.54 by 2009/2010. The best performance was recorded in two lead ministries in 2010/11–MLFD (104.52%) and MAFC (92.1%).

Performance of the recurrent budget for the agricultural sector improved from 57.68% in 2006/07 to 94.5% in 2010 – recording a remarkable achievement. Performance of the MAFC budget increased from 55.37% in 2006/07 to 96.36% in 2010 – also recording a big change during the period. Analogously, the budget performance for the MLFD improved from 24.82% to 85.88%. The rest of the lead ministries had their budget performance also improved significantly for the past five years.

Budget performance for the development expenditure in the agricultural sector is crucial for on-time completion of projects and realization of value for money in the investment projects, to avoid cost variations, maintain beneficiary communities confidence and so encourage them to contribute needed funds. Release of funds for development expenditure as compared to the approved funds has been changing from year-to-year. In 2005/06 release of funds was 18.2% of the approved budget, in 2008/09, release of funds was 99.7%; in 2009/2010 it was down to 17.9%; and in 2010/11, budget performance was 86.6%. Therefore, the trend of release of funds, or budget performance, for development expenditure in the agricultural sector is rather unstable and unpredictable.

To a large extent growth of approved and actual expenditure on the agricultural sector depends on the growth of the national budget which has been growing at an annual rate higher than 15% since 2006/07. The highest growth rate (42%) was recorded in 2009/10; and thereafter slowed down to 25% in 2010/11. Correspondingly, the share of the agricultural sector in the national budget has been increasing from the lowest of 4% in 2006/07 to 7.8% in 2010/11. On average, the growth rate of the sector’s financing has been 6.1%.The growth of the share of the

xv agricultural sector in the national budget has been lower than the corresponding growth in the national budget.

Five-year Assessment of the Trend of the Sector’s Share of the Budget

An analysis of the sectoral composition of the national budget in the past five years shows that sectors with the lion shares of the budget in order of the magnitude of the share are Education, Infrastructure, Health and Agriculture. Thus, the agricultural sector comes fourth in the list of national budget priorities. This national budget prioritization may be appropriate as sick farmers will not produce at peak, uneducated farmers and extension officers cannot transform the agriculture and agriculture without roads, railways and airports will not prosper. Generally over the last three years, the agricultural sector public spending has more than doubled both in nominal and real terms but consistently, budget growth for the sector is higher than growth in the sector’s contribution to GDP. On average, between 2007 and 2010, the agricultural sector budget grew by 64.9%; but the sector’s output grew by 13.3% (current prices) on average. Thus, the growth of output in the sector is just less than a quarter of the growth of the spending on the sector. These results, however, are for a period of three years – up to 2010 and may not reflect some of the long term impacts of the recent spending on the sector. Notwithstanding, the elasticity of output with respect to public spending on the sector is rather small, largely because productivity is still low in the sector.

Analysis indicates that although the contribution of the agricultural sector to GDP has been increasing, the budget allocation to the sector has been rather too small. It has never reached five percent of the value of its GDP for the last five years.

Definitely, public spending on the agricultural sector is too small compared to its GDP contribution; this is a concern though there are also considerable investments from the private sector. Conclusively then, the agricultural sector is not yet getting a fair share in terms of public spending on the sector visa vis the sector’s contribution to GDP; though of course the issue of productivity is still at issue.

Do the DADPs Constructed Structures have Value for Money

In determining whether the DADPs have value for money two DADPs projects were selected from each of the 10 case study districts, identified by the study team to visit and make physical assessment of the structures constructed and benefits in terms of value for money. The assessment focused on costs incurred versus the work done to accomplish the projects and the benefits realized so far. Where applicable, cost per unit was computed and comparisons made across projects. The summary of the results of the assessment is presented in the text.

24 DADPs funded projects were visited of which 1 was not completed hence only 23 were assessed by the ASR_PER team.. Of the 23 projects assessed, 18 or 78% had been satisfactorily implemented with physically observable value for money; 5 projects or 22% were not satisfactory. Thus, many of the projects assessed had value for money as far as the physical structures are concerned.

But more important is whether there are realizable benefits from DADPs investments. Yes, there are realizable benefits from the DADPs funds according to the analysis and findings. Of the 24 DAPs project visited and assessed, 23 have started to generate benefits to the respective communities. The benefits include: enhanced cattle disease control and thus reducing cattle mortality rate, increased

xvi access to extension services, Saved human lives by eliminating risks from wild crocodiles, improved market facilities, hygiene and incomes, increased Production and Productivity in the agricultural sector, increased access to water services.

Suggestions for further improvements of DADPs The ASLMs need to ensure that priority expenditures of DADPS, which are suitably designed, can continue to focus on the current three areas for the next financial year, as it is too early to change it but they should introduce further effective sub interventions to make more communities come up viable and fundable projects to enhance equity. At the same time they should strengthen the capacity/efficiency of the councils in preparing regular and suitable reports/proposals for competitive funds of DADPs ASDP needs to set up a simple tool of assessment of the DADPs projects once or before funded to determine commercial viability and could also be used for own impact assessment at the community and council level.

xvii 1. INTRODUCTION

Routinely, annual reviews of the performance of the Agricultural Sector in Tanzania, including budget and expenditure trends, are carried out to assess the progress made with respect to the set sectoral goals and targets. This is done with a view to identifying gaps and constraints that impair the growth of the sector and providing recommendations for improvement. Accordingly, this report constitutes the year 2011/12 Agricultural Sector Review (ASR) and Public Expenditure Review (PER).

1.1 Background

The Government of Tanzania has embarked on programmes to promote a radical transformation of the agricultural sector because of its central role in the country’s sustainable economic growth and poverty reduction for the majority of Tanzanians. The programmes are being carried out within the main development frameworks for both the country and the Agricultural Sector. The main development frameworks include the Tanzania Development Vision 2025, the Millennium Development Goals (MDGs), the National Strategy for Growth and Reduction of Poverty (popularly known as MKUKUTA), the National Five Year Development Plan (FYDP) for 2011/12 – 2015/16 and the Medium Term Strategic Plans for the Agricultural Sector Lead Ministries.

The programmes which are specific to the Agricultural Sector include the Agricultural Sector Development Programme (ASDP) (implemented through District Agricultural Development Plans (DADPs), the Livestock Sector Development Programe(LSDP), the Fisheries Sector Development Programme(FSDP), the KILIMO KWANZA Resolve, the Comprehensive Africa Agriculture Development Programme (CAADP), the Southern Agriculture Growth Corridor of Tanzania(SAGCOT) and the Feed the Future and Bread Basket initiatives. Through these programmes, the Government is also increasingly promoting the role public-private partnerships in the Agricultural Sector.

The ASR is focused on the performance evaluation of the sector with the objective of coming up with future priority interventions. It assesses the contribution of the agriculture sector to the set national growth goals and poverty reduction objectives. The PER process aims at informing the government budget process for strategic analysis of the composition of Government spending for enhanced consistency with national policy and expenditure priorities. The PER seeks to ensure alignment of the sector budget and expenditure with sector policies/strategies and programmes’ goals.

The preparation of this report involved the Sector Lead Ministries (ASLM): Ministry of Agriculture, Food Security and Cooperatives (MAFC), Ministry of Livestock and Fisheries Development (MLFD), Ministry of Industry and Trade (MIT), Prime Minister’s Office - Regional Administration and Local Government (PMO-RALG) and selected Local Government Authorities (LGAs).

1.2 Objectives of the 2011/12 ASR and PER

The overall objective of the 2011/12 review was to assess the performance of the agricultural sector and determine the best synergies and complementarities amongst sector initiatives in the implementation of ASDP. The review sought to assess how the sector initiatives were contributing to the performance of the sector on one side; and how the sector budget and expenditure performed during the financial year 2010/11.

xviii More specifically, the review sought to: Agricultural Sector Review i. Assess sector performance for the year 2010/11 with regards to all the major subsectors i.e. crops, livestock, fisheries and marketing. ii. Assess implementation of sectoral interventions since 2009/10 with particular emphasis on addressing the KILIMO KWANZA pillars. iii. Assess the performance of the sector in ensuring national food security and contribution to employment . iv. Assess the synergies and complementarities for implementing the recent sector initiatives (SAGCOT, CAADP Investment Plans, Feed the Future & Bread Basket Initiative) with ASDP to enable better planning and coordination of resources. Public Expenditure Review v. Assess challenges, opportunities and suggest way forward for the sector. vi. Evaluate the decentralization of DADPs expenditures to LGAs in terms of use of the DADPs funds and value for money obtained from DADPs interventions. vii. Assess if sector spending was consistent with the set sector priorities in financial year 2010/11. viii. Assess sector budgeted allocations against revised budget in financial year 2010/11. ix. Assess the sector’s share of total budget in the last 5 years describing the major shift in composition. Future Outlook x. Propose sector priorities in crop, livestock, fisheries, marketing and irrigation. xi. Suggest policy interventions necessary for enhancing agriculture sector growth and performance. xii. In line with ASDP I+II, suggest how to transform subsistence farming to commercial farming.

1.3 Approach and Methodology

Preparation of this report involved two broad types of analysis. The first is assessment of the general performance of the Agricultural Sector with regard to all the major sub-sectors, i.e. crops, livestock, fisheries and marketing. This included assessment of performance, challenges and opportunities. In particular, we assessed implementation of Sectoral interventions in line with KILIMO KWANZA initiatives, and determined synergies and complementarities for implementing the recent sector initiatives with ASDP. The initiatives include SAGCOT2, CAADP3, DADPs, Feed the Future4 and Breast Basket,5

The second part of the analysis dwelt with Public Expenditure Review of the Agricultural Sector. This involved assessment of the decentralization of DADPs expenditures to LGAs, sector spending in line with sector priorities, sector allocations against budget and the sector share of the total national budget.

The review process in both the ASR and PER depended heavily on in-depth and analytical review of relevant documents from the Lead Ministries, in-depth

2 The Southern Agricultural Growth Corridor of Tanzania 3 The Comprehensive Africa Agriculture Development Programme 4 The Feed the Future Initiative in Tanzania 5 The Bread Basket Programme of AGRA in Tanzania xix consultations with key informants and involvement of the lead Government Ministries, Departments and Agencies (MDAs) and LGAs. Throughout, the study team believed that the best approach for the assignment would be a participatory process where the client’s staff and stakeholders were involved in all the steps. The design and execution of all activities in the assignment were therefore underlined by that view. The study team organized consultative meetings with lead experts from the Agricultural Sector Lead Ministries in which discussion and consensus on the key issues of the study constituted the agenda.

Study sites

Considering the resources available for the ASR and PER study and the requirements of the terms of reference, the study team visited ten councils by randomly selecting one council from each of the five agricultural zones as indicated in Table 1.1 below. The sample was chosen to include districts with crops, livestock, fisheries, marketing and irrigation activities.

Table 1.1: Districts/LGAs Visited for the ASR and PER Zone Region District Selected LGA Coast Dar es Salaam Temeke Temeke Municipal Council Lindi Lindi Lindi District Council Northern Kilimanjaro Moshi Moshi District Council Manyara Kiteto Kiteto District Council

Western Kigoma Kigoma Kigoma District Council Bukoba Bukoba Bukoba District Council Dodoma Bahi Bahi District Council Central Morogoro Mvomero Mvomero District Council Mbeya Mbarali Mbarali District Council Southern Iringa Mufindi Mufindi District Council

From each selected council, we visited two sites to assess the value for money of selected projects under DADPs in addition to in-depth discussion with the district management team, particularly with the District Agricultural and Livestock Development Officer (DALDO). The interviews were administered through a semi structured instruments which were complemented by collection of secondary information/data. Annexes 1 and 2 present the list of people consulted at national and district levels respectively.

1.4 Report Layout

The 2011/12 ASR/PER report is organised in eight chapters. Chapter 1 introduces the report, providing the background, objectives of the ASR and PER and the methodology used. Chapter 2 reviews the major generic and specific strategic frameworks guiding the development of the sector. Chapter 3 has reviewed the implementation of the Kilimo Kwanza Resolve, pointing out the main achievements and challenges being faced. Chapter 4 analyses the new initiatives in the sector – with a focus on their synergies and complementarities with the ASDP. Chapter 5 assesses the performance of the Agricultural Sector. Chapter 6 assesses the contribution of the Agricultural Sector to food security and employment. Chapter 7 explores ways for spearheading the transformation of subsistence agriculture to commercial farming. Chapter 8 presents the public expenditure review for 2011/12.

xx 2. THE STRATEGIC FRAMEWORKS FOR AGRICULTURE

2.1 Introduction

Since independence, the Government has implemented strong overarching policies and strategic frameworks that have been driving performance and investments in the agricultural sector. These can be divided into:

 General Strategic Frameworks which principally include the Tanzania Development Vision 2025, operationalized by the National Strategy for Growth and Reduction of Poverty II (popularly known as MKUKUTA II) and the First Five Year Development Plan (FYDP I) for 2011/12 to 2015/16. The frameworks also include the Millennium Development Goals (MDGs).

 Sector Specific Programme Frameworks are many but the frameworks that are discussed briefly in this report include the Kilimo Kwanza Resolve, the Agricultural Sector Development Strategy (ASDS), Agriculture Sector Development Programme (ASDP) and Agricultural Marketing Strategy. In addition, there are the new major regional and international driven initiatives including the NEPAD sponsored CAADP, Tanzanian Public/Private Partnership sponsored SAGCOT, USA sponsored Feed the Future and the Bread Basket Initiative of AGRA. Annex 3 contains a list of many of the agricultural sector frameworks.

2.2 General Strategic Frameworks

2.2.1 Tanzania Development Vision (TDV 2025)

It is envisioned that by 2025 Tanzanians will have created a substantially developed, people centred, peaceful, stable and united society with a high quality livelihood and a high level of human development. The economy will have been transformed from a low productivity agricultural economy to a semi-industrialized one, led by modernized and highly productive agricultural activities which are effectively integrated and buttressed by supportive industrial and service activities in the rural and urban areas. A solid foundation for a highly productive, competitive and dynamic economy will have been laid. This vision serves to focus all national efforts for economic, social and cultural development. The Agricultural Sector is thus an important arena where strategic interventions need to be implemented in order to contribute the building of a strong solid foundation for a highly productive, competitive and dynamic economy.

2.2.2 MKUKUTA The National Strategy for Growth and Reduction of Poverty I, known as the MKUKUTA I (Mkakatiwa Kukuza Uchumina Kupunguza Umaskini Tanzania) was approved by the Cabinet in February, 2005, for implementation over five years and was the successor to the Poverty Reduction Strategy Paper (PRS). MKUKUTA I was succeeded by MKUKUTA II which continued the aim of moving the nation towards the Vision 2025 and to achieve the Millennium Development Goals (MDGs). It has a strong focus on growth and governance, and is an instrument for mobilizing efforts and resources towards its outcomes. The essential features in developing both MKUKUTA I & II were national ownership and consultation with stakeholders, aiming to foster greater collaboration among all sectors and stakeholders. The strategy requires increased resource mobilization, and that the national budget is aligned to MKUKUTA with direct links to the public expenditure review. A Joint Assistance

xxi Strategy has been developed with development partners to increase the volume and effectiveness of aid to achieve MKUKUTA objectives.

MKUKUTA ii identifies three clusters of broad outcomes: (i) growth and reduction of income poverty; (ii) improvement of quality of life and social well-being, and (iii) good governance. Each cluster has a set of goals and targets. To achieve each target, relevant interventions and actions have been identified. There is a strong relationship between the clusters and all are equally important. Equitable growth leads to higher incomes thus reducing income poverty. Higher incomes enable households to improve human capabilities through better education, health, nutrition and shelter. Human capability in turn is critical for long-term growth. Growth enables the government to collect revenue for provision of services. Governance provides conditions for growth, well-being and poverty reduction. The implementation machinery for the strategy is the government at all levels and in all sectors including the Agricultural Sector, the private sectors and indeed all citizens, with supervisory responsibilities vested with the Vice President’s Office.

2.2.4 Millennium Development Goals (MDGs)

The Millennium Development Goals (MDGs) are eight international development goals that all 193 United Nations member states and at least 23 international organizations agreed in 2000 that they should be achieved by the year 2015. They include eradicating extreme poverty and hunger, achieving universal primary education, promoting gender equality and empowering women, reducing child mortality, improving maternal health, combating HIV/AIDS, malaria and other diseases, ensuring environmental sustainability and developing a global partnership for development.

Although all the objectives of the MDGs correctly reflect the aspirations of Tanzania as contained in the TDV2025 and MKUKUTA I II, the country was too optimistic in adopting the timeframe of 2015. However MDGs are specific in their content and much easier to implement. For example, while TDV 2025 talks of Tanzania to have a high quality of life, the MDGs says Eradicate poverty, Achieve universal primary education, Improve maternal health, Combat HIV/AIDS, malaria and other diseases and Reduce child mortality. The TDV2025 talks of Tanzania to have a well-educated and learning society which involves much more complex issues than the MDG goal which says Tanzania has to achieve universal primary education. The adoption of the MDGs has therefore assisted Tanzania to push forward in efforts to achieve the TDV2025 and has also enabled the country to compare its performance with that of its peer countries, which in itself is an incentive to improve performance. Strategic investments on the Agricultural Sector and corresponding improvements in the design and implementation of appropriate interventions will certainly facilitate the country’s achievements of the MDGs.

2.2.4 The First Five Year Development Plan (FYDP I): 2011/12- 2015/16)6

The FYDP I seeks to attain the long term aspirations of the Vision 2025 and the MDGs by prioritizing a few key interventions (under MKUKUTA II) in an orderly sequence so that they complement each other to enable an effective and optimal resource utilization so as to unleash Tanzania’s growth potentials.

6 See The First Five Year Development Plan xxii The FYDP I’s goal for agriculture is agricultural transformation through modernization, commercialization and productivity enhancement. The goal is planned to be achieved mainly through:

a. Expanding and improving irrigation infrastructure; b. Easing availability and enhancing utilization of modern agricultural inputs and mechanization; c. Improving and strengthening availability of scientific production and methodologies through research, training and provision of extension services; d. Improving market access, and; e. Promoting agro-processing and value addition activities.

Furthermore, the Livestock Sector Development Programme (LSDP) and the Fisheries Sector Development Programme (FSDP) have been prepared and key interventions for strengthening the sectors have been incorporated in FYDP I.

2.3. Agricultural Sector Specific Programme Frameworks

2.3.1 Agriculture Sector Development Strategy7

The Agricultural Sector Development Strategy (ASDS) was prepared in 2001. The vision of the ASDS is to have by 2025 an agricultural sector that is modernized, commercial, and highly productive and which utilizes natural resources in a sustainable manner. The strategy’s implementation programme-the Agricultural Sector Development Program (ASDP) was subsequently formulated and adopted in 2006 and is the basis of the Government’s budgetary allocations and negotiations with international development partners on future support to the sector.

The major objective of the ASDS is to achieve an agricultural growth rate of at least 5 per cent, and then to increase the growth rate to 10 per cent by 2010. This goal is to be achieved through the private sector leading the transformation from subsistence to commercial agriculture. Actual implementation of the ASDS is the responsibility of the District Authorities which develop District Agricultural Development Plans (DADPs) according to their needs.

The ASDS identifies five areas of interventions: i) strengthening the institutional framework for managing agricultural development; ii) creating a favourable climate for commercial activities; iii) clarifying public and private roles in improving support services, including agricultural research, extension, training, regulation, information and technical services and finance; iv) improving the marketing of inputs and outputs, with proposed actions including a private agribusiness unit; and v) ensuring the specific needs of the agricultural sector in other sectors such as irrigation and water management, rural infrastructure and fiscal reforms.

2.3.2 Agriculture Sector Development Programme (ASDP)8

ASDP is primarily located within the MKUKUTA II cluster of reducing income poverty and to the specific targets of: increased productivity and profitability both within and outside the agricultural sector. Other policy instruments of relevance to ASDP include the Agricultural Sector Development Strategy and the Rural Development Strategy introduced in 2001 as well as the Joint Assistance Strategy for Tanzania of 2006. These latter assistance strategies have included a shift from area-based

7 See Agricultural Sector Development Strategy for details. 8Refer to the Agricultural Sector Development Programme for details. xxiii donor-managed development projects towards a sector-wide, national programming approach (SWAp), and a general or sector budget-funding mechanism. This shift has been implemented in a few sectors including agriculture but to a greater extent in education and health. Within agriculture, there is still space for individual development projects that are well aligned with the national strategies.

The Agricultural Sector Development Strategy has since 2006 been implemented with support of the Agricultural Sector Development Programme (ASDP), an agricultural sector wide programme (SWAp), that is receiving support from development partners.

The strategy in the agriculture sector is to make strategic interventions to key issues that constrain the performance of the Tanzania agriculture in order to transform it into a highly productive and profitable sector that is able to generate higher incomes for the farmers and the farm workers, more output needed to support industrialization, foreign exchange earnings and employment and adequate food to feed the nation.

2.3.3 KILIMO KWANZA

In response to the disappointing performance of agriculture, the Kilimo Kwanza Resolve was launched in 2009 as a Public-Private Partnership initiative to promote a transformation of Tanzanian agriculture in order to raise the contribution of the sector to economic growth and poverty reduction. The Resolve attempts to address the issues of extremely low utilisation of improved seed, fertilizer, and agricultural machinery (tractors and power tillers) as well as very limited value-addition/agro- processing. Kilimo Kwanza is a national resolve to accelerate agricultural transformation, applying a holistic approach, involving all sectors and all producers, small, medium and large. It is not a new strategy but a catalyst for the implementation of ASDP, with additional features.

Unlike in the past, the private sector is to be the lead implementing agent. Kilimo Kwanza was formulated by the Tanzania National Business Council, a forum for public-private dialogue. The Resolve has 10 pillars as presented below:

 National Vision on Kilimo Kwanza  Financing Kilimo Kwanza  Institutional Reorganization for Management of Kilimo Kwanza  Paradigm Shift to a Strategic Framework of Kilimo Kwanza  Land for Kilimo Kwanza  Incentives for Kilimo Kwanza  Industrialization for Kilimo Kwanza  Science, Technology & Human Resources for Kilimo Kwanza  Infrastructure Development for Kilimo Kwanza  Mobilization of Tanzanians for Kilimo Kwanza

Like MKUKUTA II, KILIMO KWANZA (Kilimo Kwanza) concerns all citizens of Tanzania. Although Kilimo Kwanza requires increased resources in implementing its priorities, it is not clearly aligned to the national budget and has no direct links to the public expenditure review. For this reason, KILIMO KWANZA on its own lacks dedicated financial resources and by implication depends on residual balances if any from existing resources in ASLMs and others. Furthermore, no one is clearly mandated for supervision, monitoring and evaluation of its implementation. There is no elaborate Monitoring and Evaluation System like the one for MKUKUTA, even a

xxiv semblance of it is missing. There is need for an Investment Plan to implement the tasks associated with Kilimo Kwanza priorities. Many of the activities can be mainstreamed in an expanded ASDP to include large, medium scale and small scale investments in agriculture; others can be mainstreamed in the Second Generation of Financial Sector Reforms.

2.3.4 Agricultural Marketing Strategy

The overall objective of the Agricultural Marketing Strategy (AMS) is to facilitate strategic marketing of agricultural products while ensuring fair returns to all stakeholders based on a competitive, efficient and equitable marketing system. The specific objectives of the AMS include to:

(a) Empower, promote and support the formation and development of agricultural marketing institutions; (b) Stimulate and facilitate the development of efficient and effective agricultural marketing information, research and intelligence systems for the development of existing and new agricultural markets; (c) Promote development, adoption and use of risk management strategies in agricultural marketing; and (d) Identify and promote niche markets as a way of addressing agricultural commodity markets facing mature global markets.

While many state and private sector actors are involved in the development and strengthening of the Agricultural marketing Strategy, ASDP has been specifically called to support infrastructure development and market facilities that are beneficial to the small scale farmers. This includes empowering the small farmers by organizing them into producer, trader/processor groups and to link them with the market sustainably through building their organizational and technical capacity. As organized groups they can bulk their produce and improve their bargaining power, acquire services and information cheaply, demand services and influence policy decisions by government.

Another measure to empower the small farmers is through the establishment and operation of the Warehouse Receipt System-WRS which provides short-term credit to farmers allowing them to store their crops until they can negotiate a better price,during which period they can borrow, if they need, part of the value of the deposited produce in form of loan advance, in which the deposited produce is used as loan security. ASDP has supported groups and villagers to construct markets and godowns which is a starting point for moving to the establishment of the WRS. ASDP should support the up-scaling of the WRS by expanding into new locations and adding new crops and contracting certified warehouse operators to provide warehousing services and to support the development of Agricultural Commodity Exchange.

On the other hand the government should remove intra-district trade barriers and encourage cross-border official trade particularly in food-products, the emerging area of product competitiveness for Tanzania with its huge production potential and surrounded by several food deficit countries. The strategic policy direction on the domestic market is to encourage higher production and output of food products so as to remove the underlying cause for intra-district trade barriers.

Inadequate inspection and enforcement of regulations regarding agricultural product quality, standards, weights and grades limit profitable participation in domestic,

xxv regional and global markets. The result is low prices for small farmers, rejection of the produce by the markets or lack of competitiveness of the products leading to low share of agricultural products from Tanzania in the markets. Some measures have already been instituted by the Government to improve the situation but a lot more needs to be done in order to enhance competitiveness and fairness in agricultural marketing transactions.

Tanzania lacks an adequate legislative and regulatory guidance in a liberalized economy to enhance private sector participation in agricultural marketing at the local, regional and international market levels and ensuring fair play among stakeholders, increasing consumers’ confidence, protecting farmers, and consumers against health risks and maintaining food and food-related safety. The Government, in collaboration with key stakeholders, needs to put in place legal and regulatory framework for efficient, effective and transparent system governing agricultural marketing at different levels.

ASDP has a component for agro-processing but there are limitations to the size of the investments that have caused many potential viable projects like the michikichi small processing facilities not to be implemented in Kigoma district. It is important to support farmers and small and medium enterprises to become engaged in viable value addition activities through enhancing post-harvest management operations, first processing and packaging as important initial steps to agro-industrial development.

Agro-processing offers opportunities to add value to agricultural commodities. For example in Mbinga coffee was being sold in 2006/07 for Tshs 1667 per kg. In 2009/10 as the result of processing, one kg of coffee is being sold for Tshs 2288. In Lindi household income from simsim rose from Tshs 1,560,000/=before processing to Tshs 3,240,000/= as the result of processing; cassava prices went up from 200/= per kg before processing to Tshs500/= to 1000/=after processing. Processing also stimulates increases in acreage, production and productivity. In Maswa as a result of installing small scale processing facilities more people were attracted to grow sunflower and acreage went up from 90 in 2006/07 to 2640 in 2009/10. At the same time processing transforms them into more stable products, thus enabling products to be transported over longer distances, and allow an increased level of demand for agricultural products to be met, both in domestic markets and in export markets.

The infrastructure for supporting marketing of agricultural products is a key issue that call for further attention and improvements. By infrastructure we refer to roadways, railways, airways and waterways. For example, a recent World Bank study9 on the maize sector estimates that transportation costs are 83% of marketing costs. In the same study, it was found that transport prices for small (often hired) trucks on rural roads in Tanzania are estimated at US$0.4 per ton-km. Transport prices for other (intermediate) modes of transportation are much higher than for hired trucks. The payment of public buses, for example, was estimated at US$0.9 and for carts US$1.0 per ton-km. Overall, it was found that transport charges disproportionately add to total marketing costs in the first two segments of the supply chain (i.e. on rural roads). About US$33.445/T (45% of 74.8) of average transport charges occur during the first 25 percent of the distance between farmers and urban wholesalers. The rest 55% of the charges are accumulated during the remaining 75% of the route.

9 World Bank, 2009 xxvi Improving farmer margins depends therefore on the reduction in operational costs through improvement in the marketing infrastructure. Many studies show high return in investing in rural roads; that investments in rural transport infrastructure have a higher internal rate of return than comparable investments in secondary roads or main roads as long as these roads are at least in fair condition; and that there is statistically significant correlation between the quality of feeder roads (distance to all-season roads) and agricultural productivity.10

Agricultural marketing information is vital in resource allocation, in enhancing bargaining power of producers and in reducing risks. The country is faced with inadequate and fragmented collection, analysis, storage and dissemination of agricultural marketing information. There is need to strengthen capacity of organizations at all levels in data collection, analysis, storage and dissemination and promote the use of ICT in agricultural marketing.

2.3.5 Livestock Sector Development Strategy

The Livestock Sector Development Strategy is the principal framework for further coordinated initiatives in the sector. It is being implemented through the Livestock Sector Development Programme. It clearly accommodates the role of the private sector and has a strong focus on poverty alleviation and on improved sustainable and environmentally friendly livestock production and productivity. The strategy has prioritised interventions in strategic areas:

 Sustainable use of land, water, pastures and rangelands;  Public/Private sector investments and financing for improvement of livestock value chain productivity and efficiency (production, marketing and processing);  Control of livestock diseases and public health;  Livestock development services (research, training, extension services, capacity building, farmer empowerment and related infrastructure);  Cross cutting and cross-sectoral Issues; and  Governance, regulatory and institutional arrangements.

The legal and regulatory framework of the livestock sector has also improved. Specifically, the Government has established the Tanzania Dairy Board (TDB) and Tanzania Meat Board (TMB) with the responsibilities of regulating and promotion of the dairy and meat industry in the country respectively. Also, the National Hides Skins and Leather Advisory Committee responsible for regulating and promoting the Hides, Skins and Leather industry have been established. In addition, two acts namely the Livestock Identification, Registration and Traceability Act No. 12 of 2010 and the Grazing Land and Animal Feed Resources Act No. 13 of 2010 have been enacted.

10 World Bank; Malawi Country Economic Memorandum, World Bank 2009 xxvii 2.4 Institutional Framework

2.4.1 Agricultural Sector Lead Ministries (ASLMs)

ASDP is implemented at two main levels: (i) National and zonal levels, which are under the sector ministries at central level, the MAFS, MLFD, MITM and PMO-RALG; and (ii) Local levels, including district, ward and village levels, which are the primary responsibility of the PMO-RALG and the concerned LGAs. It seeks to deepen and strengthen the MTEF and other processes within existing Government structures and the ASDP framework. At the local level the basket fund supported block grants (the District Agricultural Development Grant, the Agricultural Capacity Building Grant, and the Extension Block Grant) are integrated into the institutional arrangements used by the Local Government Capital Development Grant (LGCDG).

The LGCDG oversight system comprises a LGCDG Steering Committee which takes decisions on (i) changes in the LGAs grant allocation formula; (ii) identifies districts which qualify for grants based on LGA annual assessment reports; (iii) administers decisions of appeal; and (iv)LGA grant allocations and changes to the annual assessment criteria. The LGCDG Technical Committee undertakes the necessary background work and makes recommendations to the Steering Committee on the above listed decision areas. Implementation of this programme at all levels is governed by the principle of greater control by farmers and clients, in cooperation with the public sector agencies and, increasingly, with the private agricultural service providers, Non-Governmental Organizations (NGOs) and civil society. Emphasis is being given to increased transfer of jurisdiction over agricultural service provision to the farmers/clients and their representative forums.

National Level: Overall policy guidance and coordination of the ASDP is provided through the National Steering Committee (NSC). The NSC, chaired by the Permanent Secretary (PS), MAFC, is responsible for policy making and coordinating the implementation of the ASDP and monitoring its performance to ensure that the goals of the programme are being achieved. The NSC, which meets at least once in every quarter, comprises PSs of all the Agriculture Sector Lead Ministries (ASLMs), other collaborating ministries and stakeholders including Development Partner representatives.

The equivalent of the ASDP NSC for capital development grant transfers to LGAs is the LGCDG Steering Committee. The composition of the NSC is sometimes expanded for selected meetings to include MoFEA and representatives of Development Partners contributing to the Basket Fund. This broader group acts as the ASDP Finance Committee to oversee the larger basket fund that covers both the district and national level components. The Finance Committee takes decisions on: (i) Government and Development Partner contributions to the ASDP Basket Fund prior to the respective budget year including the overall financial envelopes for DADPs funding within a 3 year MTEF framework to assure predictable flow of funds; (ii) quarterly resource transfers from the Basket Fund to the agriculture line Ministries based on the quality of quarterly financial reports, audits, and technical reports; (v) policy directives governing the basket fund; and (vi) content of submissions of the ASLMs representative on the LGCDG Technical Committee on changes in the agriculture formula for LGA allocations, changes in the annual assessment criteria, identification of LGAs which qualify for the grants, and issues pertaining to rules of eligible investments, and cost sharing arrangements. The ultimate decision on these latter items will be the LGCDG Steering Committee, with the Finance Committee

xxviii approving the submission of changes to the Steering Committee through the agriculture representative on the LGCDG Technical Committee.

The ASDP Secretariat, working with the Directors of Policy and Planning in the agriculture line ministries undertake the necessary background work and make recommendations to the Finance Committee on the above listed decision areas.

The ASDP basket fund activities are coordinated through the ASDP Secretariat. MAFC, MTIM, PMO-RALG and MLFD are responsible for technical guidance to LGAs as well as for participating in the evaluation of LGA performance. They provide the needed inputs, through the ASDP Secretariat, to the Finance Committee, as described above. Their responsibility include: (i) develop, review and refine national DADP guidelines, (ii) develop, review and refine recommendations for access and performance; (iii) develop formats for ASLM, and Council agricultural sector technical reports; (iv) advise PORALG on LGA agricultural performance; (v) develop, review and refine laws, rules and policy regulation of agricultural investment and provision of extension and other agricultural services, and (vi) support to Regional Secretariats on agricultural issues. In addition, for national level activities they are responsible for (i) preparing the annual work plans consistent with the MTEF allocations; (ii) implementation of the national activities, including oversight for agricultural research; and (iii) providing quarterly financial and physical reports. The ASDP Secretariat co-ordinates and consolidates these inputs.

Zonal Level. Agricultural services, primarily research and development, are provided on the basis of the seven broad agro-ecological zones, corresponding to the coverage of the existing seven Zonal Agricultural Research and Development Institutes (ZARDIs). Overall, the management of the Zone follow the Client Oriented Research and Development Management Approach (CORDEMA).

Regional level. Regional Secretariats assist LGAs on matters related to DADPs including: assisting councils in the preparation of DADPs and quarterly reports; evaluating DADPs and LGA quarterly reports and compliance with DDP guidelines; collate LGA plans and quarterly reports; undertake regular monitoring visits to review quality of supported investments and services; and advise LGA on required improvements and make recommendations to PO-RALG as to the qualifications of councils for funds disbursements. The Regional Secretariats may also host temporary contracted technical assistance to support LGAs in the implementation of their agricultural services reform and empowerment interventions.

LGA level. LGAs implement the programme under the leadership of the District Executive Directors (DEDs). Day-to-day facilitation and backstopping is the responsibility of the District Agricultural and Livestock Development Officer (DALDO) and the District Agricultural Sector Team. LGAs formulate and implement DADPs as part of the District Development Plans (DDPs) based on the DADP Guidelines; undertake monitoring and reporting of DADP activities; supervise and coordinate the delivery of support services such as extension. Programme funds for preparing and implementing the reform of districts, as well as for financing operations, such as the contracting of service providers by client groups, are handled by the LGA Treasurer, on the basis of the council resolution/Memorandum of Agreement on the service reforms.

2.4.2 Other Critical Institutions In addition to the ASLMs, Regional Secretariats and LGAs, the institutional framework for agriculture includes the following key institutions:

xxix  Parliament  Other ministries whose mandates are important in the creation of an enabling environment for agriculture  Boards for various crops  Research and Training Institutions  Tanzania Private Sector Foundation  The National Business Council  Private sector associations  Agro-processing companies  Agro-inputs companies  Agriculture Council of Tanzania  Tanzania Revenue Authority  Tanzania Bureau of Standards  The Development Partners

2.5 Strategic Issues for the Way Forward

It is the candid assessment of this ASR that Tanzania has a set of good strategic and specific frameworks to guide the rapid and viable development of the sector. These frameworks contain many good ideas for changing the sector. But the devil is on implementation. There is now an urgent need to really work out an integrated, coherent and workable implementation mechanism that addresses the following critical problems:

1. Inadequate and inconsistent flow of funds from the Treasury for implementation of planned activities as per approved action plans. 2. The frequent changes in the structure and mandate of the ASLMs which affected the development and implementation of consistent strategies and practices. Examples of the mostly affected functions are marketing, cooperatives and irrigation. 3. The weak structural linkages between the ASLMs and the LGAs which affect the ability to follow-up and ensure adequate compliance to policies and standards and effective delivery of services. 4. Inadequate availability of data and database management systems for supporting decision making, planning, implementation and control of interventions in the Agricultural Sector. 5. Inadequate functional relationships between the ASLMs and the private sector and civil society. 6. Misalignment in the implementation mechanisms of the individual frameworks especially to promote coordinated priorities in order to avoid spreading resources thinly and to remove undue duplication of implementation efforts. 7. Inappropriate land, tax and other policies, laws and regulations that act as hindrances to large scale farms and livestock operations and generally do not provide sustainable and significant incentives for agriculture production, agro- processing, local production of agro inputs and development of strong internal and external agro-produce markets. 8. Continued dependence on donor funding for implementation of the frameworks is not sustainable. 9. Lack of a regular forum that can be used to harmonize the roles and plans of and coordination between sector institutions for enhanced overall performance of the Agricultural Sector.

xxx 3. Implementation of Kilimo Kwanza

3.1 Assessment of Implementation Progress

This chapter provides an overview assessment of the progress in implementing Kilimo Kwanza. The assessment is summarized in Table 3.1. It is based on documentary reviews and views of key informants obtained during the field visits to the selected study districts. Generally, to a large extent, the review established that by implementing the DADPs, the districts were to a large extent implementing the aspirations of Kilimo Kwanza. Furthermore, there have been quite a number of significant achievements in implementing Kilimo Kwanza.

3.2 Lessons and Key Issues for Way Forward

The relationship between Kilimo Kwanza and the other national general and specific frameworks for agriculture needs to be made clearer to all stakeholders including the general public. Furthermore, the intervention packages of Kilimo Kwanza need to be mainstreamed in the plans of the various public and private institutions whose mandates are supportive of the development of the agriculture sector.

The ASR team has observed that the concept of Kilimo Kwanza is not well internalized by many stakeholders. People need to be made to understand that Kilimo Kwanza is not the sole responsibility of the ASLMs. Rather, it is the responsibility of every one – at all levels and in all government sectors. It is also for both the public and private sectors. Therefore, there is a need for an effective communication strategy for Kilimo Kwanza.

There is also a need for monitoring and evaluation arrangements for Kilimo Kwanza. These arrangements must be adequately harmonized and linked with those of the other frameworks including ASDP.

xxxi Table 3.1: Assessment of Kilimo Kwanza Implementation

Table 7: Assessment of Kilimo Kwanza(KK) Implementation Pillar Tasks(priorities) Implementation Status and Issues No 1 THE KILIMO KWANZA This was adapted by the Government in partnership with the private sector. RESOLUTION Start the implementation While many aspects of KK that touch on the MAFC are implemented through programme of KILIMO KWANZA ASDP and Cooperative Reform and Modernisation Programme(CRMP). It is not reported, how other ministries which are touched by the KK priorities and tasks are implementing them. There is lack of a comprehensive and integrated coordination, implementation and monitoring mechanisms for KK. Instil political will at all levels of After the President’s speech announcing Kilimo Kwanza, there has not been any leadership and commitment by significant well designed dissemination programme about Kilimo Kwanza. Many Tanzanians to the KILIMO observers say that Kilimo Kwanza is not an agricultural programme but a motto KWANZA Resolution or catch phrase like KILIMO NI SIASA, designed to mobilise and sensitise people on the importance of agriculture. However, KK has tried to exceed the catchphrase status by clearly defining the tasks to be implemented to achieve the priorities and in some aspects has also provided a timeframe for completing the tasks. We now need a way to get key implementing parties to have harmonised plans of action and budgets for KK. Transform peasant and small The design of the ASDP is clearly focused on this key issue. Other initiatives in farmers to commercial farmers line with this have been Agricultural Marketing Systems Development through emphasis on Programme (AMSDP), Participatory Irrigation Development Project(PIDP), productivity and tradability. Participatory Agricultural Development Project(PADEP), District Agricultural Sector Investment Project(DASIP), Rural Financial Services Programme(RFSP) and now the Market Infrastructure, Value Addition and Rural Finance (MIVARF), Tanzania Agriculture and Food Security Investment Programme (TAFSIP) and so on. The private sector which played a key role in initiating Kilimo Kwanza has come up with the Southern Agriculture Growth Corridor of Tanzania(SAGCOT) whose goal is to improve the overall productivity of the Tanzania agriculture sector as well as the agro-processing and the manufacturing of finished goods from agriculture commodities by mobilising private sector large volumes of responsible private investment, targeted at rapid and sustainable agricultural growth, with major benefits for food security, poverty reduction and reduced vulnerability to climate change. 27 Pillar Tasks(priorities) Implementation Status and Issues No Promote medium and large Implementation through the ASDP, SAGCOT and TAFSIP aims at raising scale farmers for the full production, productivity and incomes through commercial agriculture. Many realisation of the vision of medium and large scale cereals farms have very low productivity as many KILIMO KWANZA owners are not keen to use professional advice and lack the necessary skills. ASDP efforts in this direction are hampered by inadequate staffing and financial resources. 2 Allocate not less than 10% of The achievement for the recent four years is as follows and we are yet to National Budget to agriculture in achieve the target: 2010/11 and progressively 2008/09-----7.1% increase thereafter 2009/10--- -7.0 % 2010/11--- -7.8 % 2011/12---- 6.8 %

The inadequate resources are being competed for by other national basic needs (education, health and infrastructure).However, the Government needs to be more innovative in raising national financial resources by encouraging its going concerns, corporations, cities, municipalities and District Councils to raise money through municipal bonds. This method will eventually raise money through tax, a burden that is spread over years and gives the country more money now than would come from the annual tax revenues. This would reduce government institutions’ reliance on central government coffers and release money for agricultural activities. Budget of all other Ministries to Little has been done on this issue. be oriented to supporting KILIMO KWANZA Encourage Development The Donor Partners(DPs) have responded through their support of the basket Partners to support KILIMO funding of ASDP or International Fund for Agricultural Development(IFAD) KWANZA through basket and project mode e.g. MIVARF or USA through USAID support of Feed the Future Increase budgetary allocation to The government has committed itself in the FFYP 2011/12-2015/16 to irrigate over 7 million hectares. significantly expand the area under irrigation to reach one million hectares. However, this is not in consonance with the TDV2025 which dictates that 50% of the potential area for irrigation is put under irrigation. This would require that 15million hectares are irrigated by 2025 suggesting 3 million hectares in 2015,

28 Pillar Tasks(priorities) Implementation Status and Issues No 8million hectares in 2015 and 15 million hectares in 2025. Fast track the establishment of The Bank of Tanzania is working on the feasibility and modalities of establishing TADB with initial capitalisation the Tanzania Agricultural Development Bank(TADB) of US $ 500 million Mobilize Loans and Grants Mobilisation of loans and grants can only be done after the bank is established arrangements for Tanzania Agriculture Development Bank (TADB) from Multilateral and Bilateral Sources Undertake consultations with These activities will be handled by the TADB once it is established with a Board Commercial Banks and other and Management. stakeholders towards holding of TADB Bonds. Increase allocation to the TIB The government has already done this in the 2011/12 budget. Agriculture Window for concessionary long term lending Broaden Development Partners’ The Government is working on this but it is also open to those who want to participation in ASDP Basket finance activities in Kilimo KK outside the basket Funding Mobilize the private sector to The Government signed an agreement to implement CAADP to empower increase investments in KILIMO Tanzania’s private sector to benefit from available opportunities for developing KWANZA its agriculture and especially the food sector through an investment programme called Tanzania Agricultural Food Security Investment Programme (TAFSIP).TAFSIP will be implemented through and expanded ASDP.

SADCOT, a product of PPP, aims at raising agricultural production in Dares Salaam, Coast, Morogoro, Iringa, Ruvuma, Mbeya, Rukwa and Zanzibar through the private sector.

Bread Basket and Feed the Future projects have been prepared with the cooperation of development partners for the purpose of expanding the supply of staple food crops. Other investments in the agricultural sector pass through the Tanzania Investment centre(TIC) Develop national strategy for The Bank of Tanzania is implementing this.

29 Pillar Tasks(priorities) Implementation Status and Issues No financial literacy Implement financial education The Ministry of Agriculture, Food and Cooperatives is deeply involved in the programs and strengthen implementation of this Farmers Cooperatives and SACCOs’ capacity to effectively manage resources for KILIMO KWANZA Negotiate with commercial Not yet done banks and other stakeholders on concessionary lending for agricultural production Start August 2009 Review prudential regulations to The Bank of Tanzania is implementing this and as a start they are reviewing the encourage lending to Microfinance Policy as well as the Rural Financial Strategy agricultural production Encourage and support banks to The MIVARF which started work in July 2011 has a provision for such support be innovative in agricultural value chain financing Establish community banks and Community banks have increased from 7 in 2008 to 10 in 2011 while three financial institutions in rural more plan to commence business within two years. areas Build the capacity of Community MIVARF and FSDT are working on the issue. Banks’ management and strengthen their Association Community banks and other Not much has been done. financial institutions like Tanzania Postal Bank, NGOs and microfinance institutions to establish special units for mobilizing and disbursing agricultural credit Establish Commodity Exchanges The World Bank has fast tracked the establishment of the Commodity Exchange.

Facilitate floatation of The DSE opened its doors to all companies that qualify. All agricultural

30 Pillar Tasks(priorities) Implementation Status and Issues No agricultural companies at the companies that are willing to float their shares and meet the regulatory Dar es Salaam Stock Exchange requirements are very welcome. Negotiate with pension and This is a dangerous undertaking to risk the meagre savings of employees most other empowerment funds to of who live from hand to mouth. lend on concessionary terms to agricultural production. 3 Instil good governance in all This requires action from individuals and leadership at various levels as well as sectors of the economy and at reforming of the legal and regulatory framework. The Public Private Partnership all levels. (PPP) has to identify the modalities for implementing this. Strengthen the Ministry of This has not been done. Agriculture and streamline the functions of agricultural related cluster. Mainstream environmental While MAFC on its part has laid a strategy for mainstreaming environmental factors in all aspects of KILIMO factors in the agricultural sector. The other ASLMs, the banks, Ministry of Lands KWANZA and Settlement have not done so yet. Establish an autonomous MAFC is working on a law to be enacted by Parliament on the establishment of a National Irrigation Agency (NIA) National Irrigation Commission. under MAFC Reorganize the two irrigation This may be considered as part of the establishment of the National Irrigation funds under the proposed Commission. National Irrigation Agency (NIA) Establish a National Agriculture An Act establishing the National Cooperative Commission has been drafted for and Cooperatives Commission submission to Parliament for enactment. (NACC) for public private partnership in Agriculture as well as monitoring and evaluating the implementation for KILIMO KWANZA. To carryout planned monitoring Those aspects of KILIMO KWANZA that are within the purview of MAFC will be and evaluation activities. monitored and evaluated by the ministry’s M&E. However KILIMO KWANZA elements spread all over the government machinery and since there is no empowering framework for implementing KILIMO KWANZA on any institution, the carrying out of M&E activities for KK as a whole is not being done.

31 Pillar Tasks(priorities) Implementation Status and Issues No Support capacity building of ASDP is already doing this and the MIVARF has provision for these activities. farmers and farmers’ organizations in the implementation of KILIMO KWANZA programmes. 4 Put in place arrangements for The government is supporting small, medium and large scale farmers to production of strategic produce the listed products. commodities such as maize, cassava, rice, legumes, fish, meat and dairy products, wheat, bananas, potatoes, sorghum, millet. Introduce cassava blending in Since cassava flour may be used directly there is no need to force the blending. both Cassava Flour be produced in large quantities, packed and distributed maize and wheat milling throughout the country. Put in place arrangements to The government is supporting producers of oil seeds crops to establish an finance the production of cotton, association which will assist farmers with information, better production sunflower, safflower, sesame techniques, interface with Research institutes and financiers as well as and palm oil. processing and marketing Put in place arrangements for The government is developing a National Horticultural development Programme the production of high labour to cater for this. intensive crops requiring limited investment with potential for significant foreign exchange earnings and contribution to national economic growth such as onions, mangoes, bananas, grapes, avocados, pineapples, tomatoes, vegetables and spices Put in place arrangements for The government is supporting expansion of production of these crops through increased production of sisal, encouraging large scale production through block farms, research, processing sugarcane, oilseeds and sweet and marketing sorghum for energy and other value added products.

32 Pillar Tasks(priorities) Implementation Status and Issues No Set up a Strategic Advisory The government and the private sector have not yet implemented this. Team incorporating private sector to advise on areas where various activities in the Paradigm Shift will be undertaken. Undertake value chain analysis MIVARF provides an opportunity for the implementation of this recommendation. with holistic approach which looks at the priority areas including suitable models for integrating agricultural producers and processors Fast- track Contract Farming Not yet. However this is an important undertaking to facilitate smooth growth of System Legislation contract farming that allows the contractor to provide technical skills, inputs and finance to the contracted farmers. Through this method farmers are able to raise production and productivity and move faster from subsistence to commercial farming. The legislation is designed to provide checks and balances and identify rights and obligations of the parties. Carry out capacity building This is important in view of the already significant number of farmers involved measures for the parties and more are expected. involved in Contract Farming and their organizations.

Review the cost of doing MAFC in cooperation of other institutions are working on this. business in the agricultural sector to make it more competitive. Allocate more resources to the Instead of being done on an emergency basis, it should be based on a well National Food Reserve Agency calculated manner designed to ensure adequate reserves are procured and to regulate the prices of food maintained, the farmers are given fair prices on the basis of available crops and make the opportunities for cross boarder trade and the average market price. Government the buyer of last resort Enforce regulations to sell crops The Weights and Measures Agency is undertaking this assignment. However it is

33 Pillar Tasks(priorities) Implementation Status and Issues No in proper weights and measures hampered by lack of adequate number of staff, transport and financial i.e. not in lumbesa, pakacha, resources. sado,etc Establish a development and Cereals and Other Produce Board has already been established and will regulatory body to oversee commence business in season 2011/12 by purchasing 16,000 tons. production and marketing of mixed crops Enhance extension services to Through ASDP this is being implemented. create demand and to ensure appropriate use of fertilizers Facilitate availability of MAFC facilitated the training of rural agro dealers and linked them to NMB to fertilizers. enable them have the capacity to stock fertilisers for sale to farmers. Undertake immediate The government is rehabilitating all seed production farms and aims at ensuring assessment of the performance that by 2014 60,000ton of seed should be produced locally. of all the privatized seed companies (TANSEED) in order to meet the national demand. Subsidize high quality and GOT subsidised 15,150 tons of seeds in 2009/10 and 20,358 tons of seeds in certified seeds to small scale 2010/11. farmers. Empower and strengthen The government is empowering TOSCI with resources to strengthen its capacity Tanzania Official Seed and is facilitating its entry to the Organisation for Economic Cooperation and Certification Institute (TOSCI) Development (OECD), International Seed Testing Agency (ISTA) and the to become a regulator. International Union for the Protection of New Varieties of Plants in order to ensure that locally produced seed meet international standards. Train farmers on the Through ASDP farmers are receiving proper training on appropriate requirements and proper agrochemicals and their proper use application of agrochemicals. Support local agro-processors Market Infrastructure, Value Addition and Rural Finance Support by provision of incentives and Programme(MIVARF) other support measures. Support SIDO to promote and Through Muungano wa Ujasiriamali Vijijini(MUVI) and MIVARF, SIDO will be expand small scale agro empowered to promote small scale agro processing operations. processing operations.

34 Pillar Tasks(priorities) Implementation Status and Issues No Establish District food storage Through ASDP and MIVARF a number of warehouses will be established in each Facilities district Promote private sector The Private Sector can now work with MIVARF on this task. investments in cold storage facilities for perishable and other commodities. Train farmers on proper storage Farmers will stand to gain when the MIVARF is implemented and the management of agricultural products Improve distribution system to Efforts have been made to identify as many agro dealers as possible, train them provide quality agricultural and facilitated bank lending to enable stock required inputs inputs timely Business Associations/ They have done nothing to date. Chambers to mobilize their members to establish commercial farming, export production, agro processing and input distribution. Support extension officers to MAFC is working on with Shamba Darasa for the same purpose and with the establish demonstration farms same effect. and to provide guidance on proper farming methods to farmers Set performance targets for These have not been set. There is the target of one staff per given number of extension officers as basis for farmers/livestock keepers their evaluation. Support Training of Farmers Currently the government is promoting Farmer to Farmer Extension “Para Professionals” and deploy them in every ward. Establish agricultural resource Since the government is not involved in commercial activities, these need to be centres cum farm centres – for established by the private sector, groups or cooperatives provision of Agricultural inputs and services 9 Build adequate irrigation The GOT is committed to raising the area under irrigation from 384,000

35 Pillar Tasks(priorities) Implementation Status and Issues No schemes targeting priority hectares in 2011/12 to 1,000,000 hectares by 2015. crops, production volumes and location requirements Establish adequate storage MIVARF has provision for these in the selected markets to be constructed with capacity at all levels e.g. cold their support. storage, household storage, national storage for commodities etc.

Construct modern abattoirs and With people participatory planning, projects need to be identified by the people meat processing plants in every themselves. The private sector is challenged to play their part and region ASDP,MIVARF and financial institutions are there to back them up. Establish market centres at Those markets identified by the people themselves are being established Ward level linked with through ASDP funding. production centres Allocate adequate resources to Inadequate resources available from the GOT have prevented this from being the Rural Energy Fund. implemented. 10 Integrate KILIMO KWANZA in This has not been done. the plans of the Central and Local Government Parliamentarians, Regional and They have done so on their own terms as there were no guidelines on how this District leadership to un-programmed resolution ought to be done. disseminate information on KILIMO KWANZA Enlist effective involvement and The private sector and public sector initiatives started by launching SAGCOT. participation of the private sector in the implementation of KILIMOKWANZA Engage media in drumming up This task involves money. As it appears, no one was specifically singled out to support for KILIMO KWANZA be the overall in charge of the task. There was no effort to prepare a budget to support the action plan for the tasks. No wonder it has not been implemented. Mobilize leaders at all levels to The PMO and leaders at all levels were tasked to implement this, however not be personally involved in much has been done. agricultural production under

36 Pillar Tasks(priorities) Implementation Status and Issues No KILIMO KWANZA Prepare and produce quarterly The PMO was in charge of this task supported by TNBC and MAFC. No report has progress reports been prepared to date

37 4. NEW INITIATIVES

4.1 Introduction

Chapter 4 has assessed the synergies and complementarities for implementing the recent sector initiatives (SAGCOT, CAADP Investment Plans, Feed the Future & Bread Basket Initiative) with ASDP to enable better planning and coordination of resources. SAGCOT stands for the Southern Agricultural Growth Corridor of Tanzania, an initiative of an international public-private partnership launched at the World Economic Forum on Africa in May, 2010 in Dar es Salaam. CAADP stands for the Comprehensive Africa Agriculture Development Programme, an initiative of the African Union’s New Partnerships for Africa’s Development (NEPAD), adopted by the Heads of State and Government in Maputo, Mozambique in 2003. In Tanzania, this initiative is to be implemented through the Tanzania Agriculture and Food Security Investment Plan (TAFSIP), through the expanded ASDP. The Feed the Future is part of the implementation of the U.S. Government Global Hunger and Food Security Initiative. Bread Basket Initiatives is promoted by the Alliance for a Green Revolution in Africa (AGRA) with the goal of unleashing Tanzania’s latent agricultural potential.

The assessment has established the investment priorities of each of the new initiatives and the extent of synergies and complementarities of each initiative with ASDP. It gives recommendations for taking advantage of the synergies and complementarities.

4.2 Priorities of the New Initiatives and Synergies/Complementarities with the ASDP

4.2.1 SAGCOT

SAGCOT aims at bringing agricultural revolution through Government collaboration with other agricultural stakeholders. The goal of this initiative is to improve the overall productivity of the Tanzania agriculture sector as well as the agro-processing and the manufacturing of finished goods from agriculture commodities. Its mandate is to mobilise private sector investments and partnership to help achieve the goals of Kilimo Kwanza resolve by catalysing large volumes of responsible private investment, targeted at rapid and sustainable agricultural growth, with major benefits for food security, poverty reduction and reduced vulnerability to climate change. SAGCOT promotes “clusters” of profitable agricultural farming and services businesses, with major benefits for smallholder farmers and local communities.

Private companies and farmers’ groups are being invited to join the SAGCOT Centre in order to access the centre’s financing and technological skills and to take advantage of the experience of the current SAGCOT members. The centre is helping to organize the government, private sector, farmers’ associations, development partners and nongovernmental organizations with a focus on efforts and investments to benefit smallholder farmers as opposed to commercial farmers. While the ultimate goal will be to cover the whole country, SAGCOT is currently targeting the bread basket regions of the southern highlands based on the solid infrastructure that is already in place within the region.

SAGCOT will identify existing and potential project opportunities in the corridor in the infrastructure and agriculture sectors. Six cluster developments have been identified along the southern corridor of Tanzania. The six clusters are:

38 1. Sumbawanga(Rukwa Region) 2. Ihemi(Iringa Region) 3. Kilombero(Morogoro Region) 4. Mbarali(Mbeya Region) 5. Ludewa(Njome Region) 6. Rufiji(Coast Region)

It is quite clear that the objectives of SAGCOT are quite in line with those of the ASDP. SAGCOT’s focus on value addition, infrastructure development, agricultural production and productivity and public-private partnership ties well with the priorities of ASDP. SAGCOT actually is a good mechanism for complementing the implementation of ASDP that is directly focussed on private sector led public private partnership to help transform the productivity of smallholder agriculture. SAGCOT will operate in a high potential corridor and will focus on cluster development with high private enterprise involvement, while ASDP is a national initiative operating in all LGAs in Tanzania.

There is need to ensure closer working relationship between the SAGCOT centre and ASDP coordination structure both at national and district level.

4.2.2 Comprehensive Africa Agriculture Development Programme

The Comprehensive Africa Agriculture Development Programme (CAADP) is an initiative of the African Union’s New Partnerships for Africa’s Development (NEPAD), adopted by the Heads of State and Government in Maputo, Mozambique in 2003. The initiative seeks to promote agricultural growth, rural development, and food and nutrition security and place the continent on a path for sustainable socio-economic development. Through CAADP African Governments commit to providing technical and financial support for the transformation of the agricultural sector and the development of the agro-based private sector as well as addressing trade issues. CAADP includes a focus on changing perspectives and mind-sets in order to promote commercial agriculture; promoting policies that raise agricultural productivity; expanding markets at national, regional and international level; and, encouraging and facilitating private investment to support the agricultural sector. The objectives of CAADP are as follows:

 Achieve an average of annual Sectoral growth of 6%  Attain food and nutrition security  Develop regional and sub-regional agricultural markets  Integrate farmers and pastoralists into the market economy  Achieve a more equitable distribution of wealth

The credibility to CAADP is high, based on the compact which was signed by the Government, representatives of farmers, Regional Economic Communities, Private Sector, Development Partners and Civil Society Organisations and Non-State Actors on the 8th July, 2010.The CAADP Compact was developed through broad-based stakeholder consultations and round-table processes that ensure that the CAADP agenda reflects a broad consensus on the country’s priorities to which efforts will be devoted by all concerned, which is a way of obtaining partnership and obtaining commitment from stakeholders. Signing of the Compact indicates a consensus and commitment by all signatories, to participate in the development of the agricultural sector within the CAADP framework.

39 The Compact outlines the agreed policies, strategies, priority areas, investment plans, and resource requirements for the development of the agricultural sector in the country that will lead to economic growth and food security and overall reduction of poverty.

Advantages of CAADP for Tanzania

The vision 2025 of the country is to build a modern and commercial agricultural sector that is highly productive and profitable and utilizes natural resources in a sustainable manner. Therefore, the country’s efforts target ensuring food self- sufficiency, enhancing export earnings and reducing poverty levels. To achieve these goals, actions are being taken to increase primary production and productivity, enhance agro-processing and value addition and to increase profitability for all involved in the sector.

The basic principles of ASDP and ASP are very much in line with the CAADP principles. Within the framework of the on-going preparation of ASDP II and ASP III, CAADP provides an opportunity for Tanzania to further strengthen its agricultural development efforts towards achieving greater impact on the country’s economy and food security.

Currently, the ASDP/ASP is supported by a small group of Development Partners through the basket funding and a number of projects. The CAADP process provides an opportunity to convince other Development Partners to participate by obtaining consensus on priority areas for support, and by adopting a more flexible financing system. Furthermore, within the ASDP/ASP, the involvement of NGOs and the private commercial sector has been rather limited: the CAADP process is a chance for bringing on board the NGOs and the private sector to play a bigger role by clarifying their roles and agreeing on the policy and institutional mechanisms facilitating their involvement.

In terms of implementation synergies and complementarities between ASDP and CAADP, the following are the major ones: emphasis on joint coordination teams; the opportunity for the private sector in taking up leadership in investments in input provision, agricultural production, credit and other financial services, marketing, processing and storage as well as extension services.

In line with CAADP, the expanded ASDP will be able to implement interventions that; a) leverage regional and international markets in staples and food commodities b)intensify the role of effective private sector participation in agriculture c) actively take advantages of technology, innovation and research to boost agricultural productivity d) expand and improve contract farming e) expand investments in value addition and f) improve the legal, policy and institutional environment for a more robust public-private partnership approach to the sector’s development. TAFSIP will enable ASDP not to restrict its funding to basket-funded investments but rather to leverage other aid modalities, such as project funding and the activities of private foundations and non-state actors, including the Gates Foundation.

Tanzania Agriculture and Food Security Investment Programme (TAFSIP)11

TAFSIP is a ten-year investment plan which maps the investments needed to achieve the CAADP target of six per cent annual growth in agricultural sector GDP.

11Tanzania Agriculture Food Security Investment Programme 40 The United Republic of Tanzania (URT) will pursue this target through allocating a minimum of ten per cent of its budget to the agricultural sector. The URT also seeks the support of the international community and the private sector in bridging the funding gap between the funding requirements and the amount that can be provided from a variety of domestic, international, public and private sources.

TAFSIP is not a new agricultural development strategy or programme, but a sector- wide plan for coordinating and harmonizing the resources needed to accelerate implementation of existing initiatives(ASDP & ASP) and to launch new initiatives which address national, regional and sectoral development priorities.

TAFSIP’s development objective is to “rationalise allocation of resources to achieve an annual 6 percent agricultural GDP growth, consistent with national objectives to reduce rural poverty and improve household food and nutrition security” and CAADP objectives and principles. This objective embodies the concepts of allocating resources to invest more, produce more, sell more, nurturing the environment, and eliminating food insecurity; all of which are embodied in various national policy instruments.

In order to achieve the above objectives, the investment plan is expressed in terms of seven thematic programme areas each with its own strategic objective and major investment programmes. The main themes/investment areas are:

• Irrigation Development, Sustainable Water Resources and Land Use Management • Production and Rural Commercialization • Rural Infrastructure, Market Access and Trade • Private Sector Development • Food and Nutrition Security • Disaster Management, Climate Change Adaptation and Mitigation • Policy Reform and Institutional Support

Implementation and Coordination: TAFSIP, being a sector-wide investment plan and involving many ministries and thus a large institutional framework is required with high-level responsibility for management and implementation oversight. The proposed coordination mechanism will be a Presidential Retreat, an Inter-Ministerial Coordinating Committee(ICC), a Technical Committee of Directors, thematic working groups and ASDP Secretariat /CAADP Country Team. The ICC will maintain close communication with the Cabinet with regard to TAFSIP implementation as needed.

M&E of the sector-wide programme (ASDP/ASP) being financed through the TAFSIP will employ and strengthen the existing systems used to monitor and evaluate sector performance. The plan contains a results framework that details the activities and outcomes that are expected under each of the 7 Strategic Objectives (SOs) and milestone indicators which can be used to monitor progress towards each of the objectives. The scope of the ASDP/ASP M&E frameworks will also be expanded to accommodate other stakeholders (linked Ministries/institutions, private sector, non state actors, civil societies, CAADP Country Team) to become a sector-wide M&E system which tracks performance of all TAFSIP funded sector activities as well as new initiatives in the sector

The principal benefits of the programme will be increased agricultural production and productivity, improved nutrition, increased, accelerated commercialization of the rural sector, improved land and water management practices and measures to

41 adapt to climate change and improved institutional capacity to mobilize and manage resources in support of agricultural sector development, reduction in harvest and post harvest losses, increased export earnings, improved access to financial services by smallholder farmers and rural entrepreneurs, increased participation of private sector players, cooperatives and other forms of farmer organization, improved infrastructure and access to markets, increased rural employment, improved irrigated agriculture and climate change mitigations and recognition of the special needs of rural households affected by HIV/AIDS and/or poor nutrition status.

The TAFSIP represents a further step forward in realizing the aspirations of the CAADP Compact and Vision 2025 and Vision 2020 for the Mainland and Zanzibar respectively, i.e. “to have an agriculture sector that is modernized, commercialized, and profitable and utilizes natural resources in a sustainable manner.” For Tanzania to achieve its development aspirations there is need to have a substantial upswing in the rate of investments in agriculture and food security, commitment of all players and strong coordination on monitoring and accountability. Holding other factors constant and that all synergies and thematic areas are holistically implemented, realization of the 6 % (even beyond) growth target in agricultural sector will be achieved within the investment plan time frame.

4.3.3 Feed the Future Initiative for Tanzania

In response to the spike in global food prices in 2007-2008, the United States of America pledged $3.5 billion to help poor countries fight hunger by investing in agricultural development. The U.S. Government’s Feed the Future Initiative12 utilizes innovation, research, and development to improve agricultural productivity, link farmers to local and regional markets, enhance nutrition, and build safety nets. These investments will increase the supply of food where it is needed and help vulnerable people withstand price shocks better. While the USA will continue to provide food aid during times of crisis, but believes that a lasting solution to hunger requires a long-term commitment to agricultural growth. Agricultural growth fosters economic growth, reduces poverty, improves health, and is necessary to meet the needs of a growing world population in the face of climate change and other environmental challenges. The U.S. Government’s Feed the Future Initiative addresses the root causes of hunger that limit the potential of millions of people, using a combination of bilateral programs and multilateral mechanisms. Feed the Future promotes growth in the agriculture sector, facilitates local and regional trade, and invests in game-changing innovations and technologies to support productivity increases, so that countries are better able to combat hunger, feed their people, and contribute to stable global food supplies.

In Tanzania, Feed the Future investments will improve rural community links to markets by improving roads. This will increase agricultural and other rural-based production, improve rural communities’ access to reasonably priced food, and stimulate greater off-farm employment opportunities.

In Tanzania, through Feed the Future, the United States Government assistance supports national strategies to reduce poverty and accelerate progress in achieving the Millennium Development Goals (MDGs) by increasing agricultural productivity and profitability, and enhancing national and regional food security. USAID brings its technical expertise and capacity to lead Feed the Future in Tanzania and is working closely with other U.S. government stakeholders, including the State Department and USDA, through a whole-of-government approach.

12 USAID Administrator: Feed the Future; Press Release, Washington D.C;24th April 2010 42 In addition, Feed the Future’s inclusion of NGOs, the private sector and other nations could yield to opportunities for these target countries beyond what was initially possible through the US government alone. If programmes are effectively monitored and coordinated by these institutions, real and necessary changes beneficial to the people would occur.

4.3.4 Bread Baskets Initiative for Tanzania

The Tanzania's agricultural sector has great potentials and can play a big role in the global food security system. Tanzania has a potential not only to feed its own citizens but to become a bread basket for the rest of Africa.13

The smallholder farming sub-sector in the country offered the most potential and opportunity for development, therefore there was urgent need for the government to make sure that more investments are directed in that area including the assurance that small-scale farmers are serviced properly, something that makes it easy for them to acquire loans as well increasing investments in new agricultural technologies which will benefit smallholder farmers. The government should also evolve a special programme that would target youths and women who were very critical players in improving the value chain of agriculture. The private sector must also be targeted due to the important role it plays in supporting Africa smallholder farmers through transfer of technology and expertise.

The Bread Basket strategy begins by identifying and selecting geographical areas with potential for greater returns in agricultural productivity and then providing holistic support for the selected area. The rationale for these bread baskets emerged from the 2007 and 2008 food crisis which severely affected many African countries. The strategy clearly identifies key geographic areas of the country where higher returns can be made on agriculture.

It appears that the Tanzanian government is putting words into action as it currently subsidies fertilizers by up to 30% but has not started guaranteeing farmers minimum prices for farm products they are not able to sell on the commercial market.

The bread basket strategy is not a new idea really, but what it brings to the table is how to turn agriculture into an investment opportunity for private sector, government and multi lateral agencies”14. The bread basket strategy can easily be mainstreamed into ASDP as one of its dimensions.

4.3 Coordination of many development initiatives in the agricultural sector

Table 4.1 provides a summary of the comparisons between ASDP and the major new initiatives. Clearly the overall goal of these initiatives is the same but we have some differing emphasises in the approaches used which actually is healthy. What is crucial for now is to have an overarching coordination and monitoring and evaluation framework that is agreed and owned by the key parties with the Government providing the leadership. The TAFSIP Management and Coordination structure provides a useful base that can nicely build on what is there for ASDP and providing practical linkages to the structures that are coordinating the other initiatives.

13 For more on the Bread Basket Initiative - see www.reportingdna.org 2010 14 Namaganga Ngongi, AGRA President:, www.reportingdna.org 2010

43 Table 4.1 Comparison of Main Features of ASDP, CAADP and SAGCOT ASDP TAFSIP/CAADP SAGCOT Public-led agricultural sector Continental framework Private-led agricultural programme promoting national Agr. Sector development project Investment Plans Focus Sustained agricultural growth of 6% annual agricultural growth Improved food security at least 5%. rate. Commercialization of small Increased production to improve holder farmers incomes attain greater food Commercialization of agriculture security and poverty reduction Attain food security and nutrition and improving responses to food emergency crises. CAADP Pillar 3. National and all LGAs Pan Africa & Tanzania Clusters in the Southern Highland corridor area All farmers through DADP All farmers Large farms and out-growers Improved local agricultural Support productivity and Small holder farmers will have services production growth (CAADP Pillar the opportunity to link to Local agricultural investments 1 and 3) markets Private sector development and Improved rural infrastructure Local entrepreneurs will have marketing and marketing: CAADP Pillar 2. the opportunity to set up new Develop regional and sub- businesses. Communities to regional markets benefit from improved rural infrastructure. Farmers’ better access to Extend area under sustainable Improved access to inputs, knowledge and services. land management: CAADP Pillar value addition and marketing. Increased production for all crops 1 Top down targeting and through a bottom up planning selection process. Policy and Coordination Integration with government Implement through the ASDP Implemented though the systems (harmonization and and other systems private sector alignment) Facilitate better communication Increased private investment Increased private investment between government, private and PPPs sector and stake holders Reforming public service delivery Improving agricultural research, Private sector service delivery for more pluralistic service technology dissemination and Information and finance to delivery adoption; CAADP Pillar 4. potential investors through facilitation and FFS Improved research through the Commissioning of targeted roll out of CORDEMA (demand- and applied research driven) Funding Co-funding with farmers and Government and DPs to mobilise Integrate with and leverage private enterprises funds from both domestic and ASDP funds Development Partner and external sources A catalytic Fund Government using a basket Patient Capital funding mechanism Loan guarantees and currency Local agricultural investments risk instruments. Integrate through CBG, EBG, CPG and with and leverage ASDP funds DIDF M&E Streamlined and improved Expanded and strengthened Stand alone M&E for sector wide M&E ASDP Sectorwide M&E monitoring the business environment and progress Source: Adapted from ASDP Evaluation, Final Draft, June, 2011

4.4 Key Recommendation

44  Strengthen coordination of development initiatives: An overarching national public-private coordination mechanism for agricultural sector initiatives.

The country is expected to see an increased number of agribusiness development initiatives in the coming years as more emphasis is given to the agricultural sector. However, coordination has often been weak, resulting in duplication of activities and less than optimal allocation of resources. Improved coordination of agribusiness development initiatives is vital in order to create synergies, share lessons and good practices, and optimise resource allocation.

The planned TAFSIP Management and Coordination if well implemented and enforced effectively provides a framework for a national coordination mechanism for all the major initiatives in the sector. This mechanism will not replace the coordination arrangements specific for each initiative but will serve to foster communication, harmonisation, joint operational planning, exchange of information and best practices, and utilisation of common M&E indicators where practical. TAFSIP is to expand and strengthen the ASDP M&E system because the ASDP”process is widely understood from national level down to village level. It has created a mode of operation which has streamlined planning, financial management, monitoring and reporting systems, all of which have shown improvement. It has facilitated significant development of human and physical capacity, a capacity which can now support mainline ASDP activities, but which can also provide an environment for new initiatives to use and link with ASDP.”15

15 United Republic of Tanzania, Ministry of Agriculture Food Security and Cooperatives: Evaluation of the Performance and Achievements of the ASDP; Final Draft; Dar es Salaam, June 2011 45 5. AGRICULTURE SECTOR PERFORMANCE

5.1 Introduction

Chapter 5 has assessed the performance of the agriculture sector performance with a focus on the year the 2010/11, considering crops, livestock, fisheries, marketing, input distribution and financing, irrigation and private sector participation as the focal isses. Before assessing the sector’s performance, macro-economic performance is reviewed followed by an assessment of the sector’s contribution to GDP.

5.2 Macro-economic Performance

In the year 2010, the National GDP was Tshs 32,293,479 million at the respective year prices (Figure 5.1). On the other hand, given the annual population growth of 2.9%, the population of Tanzania mainland was estimated to be 41,914,311 in 2010. Therefore per capita income was Tshs 770,464.3 for 2010, compared to Tshs 693,185 for 2009; this is a growth of 11.1%.

Also Table 5.1 shows that in the year 2010, the national GDP grew at 7% compared to 6% in 200916. Significant growth was observed in the following economic activities: communication (22.1%); construction (10.2%); electricity (10.2%); finance (10.1%); and industrial products (7.9%). The contribution of service economic activities to the national GDP increased in 2010 while the contribution from agricultural economic activities decreased, meaning that there was increase in economic activities in other areas apart from agriculture.

Agriculture Sector’s Contribution to the Economy

Agriculture is one of the leading sectors in Tanzania’s economy. It contributes substantially to the GDP, accounts for about one fifth of the foreign earnings and supports the livelihoods of more than two thirds of the population. It has forward linkages with the non-farm sector through agro-processing, consumption and export; provides raw materials to industries and a market for manufactured goods.

The growth in agricultural economic activities increased by 4.2% in the year 2010 compared to 3.2% increase in 2009 (Table 5.1).The growth was contributed by the high crop production due to favourable weather condition in the 2009/10 season, better irrigation infrastructure and Government effort to increase subsidy in agriculture inputs. Small scale agriculture production increased from 3.4% in 2009 to 4.4% in 2010. The increase was contributed by higher production in maize, sorghum, millet and cassava. Small scale livestock activities increased from 2.3% in 2009 to 3.4% in 2010, this was contributed by better pastures and good extension services. Small scale activities in forestry and hunting showed a growth from 3.5% in 2009 to 4.1% in 2010, owing to the increase in the production of forestry products and hunting.

Fisheries economic activities showed a growth of 1.5% in 2010 compared to 2.7% growth in 2009. The decline was contributed by the decrease in fish demand and fish products in the export market; decrease in fish production especially those from the lakes due to destruction of environment, illegal fishing, and the use of poor fishing equipment. The contribution of fishing in the National GDP remained 1.4% same as in the previous year 2009.

16 BOT Annual Economic and Operations Reports 46 Figure 5.1: The Trend in National Income and GDP: 1999-2010

Source: Economic Survey 2010

Table 5.1: Trend of Economic indicators, 2002 – 2010

2002 2003 2004 2005 2006 2007 2008 2009 2010 Actual growth of 7.2% 6.9% 7.8% 7.4% 6.7% 7.1% 7.4% 6.0% 7.0% GDP Agriculture, 4.9% 3.1% 5.9% 4.3% 3.8% 4.0% 4.6% 3.2% 4.2% forestry and hunting Fisheries 6.8% 6.0% 6.7% 6.0% 5.0% 4.5% 5.0% 2.7% 1.5% Electricity 9.4% 10.9% 10.9% 10.4% 8.5% 9.5% 8.6% 7.0% 10.2% Industries 7.5% 9.0% 9.4% 9.6% 8.5% 8.7% 9.9% 8.0% 7.9% Construction 11.9% 13.8% 13.0% 10.1% 9.5% 9.7% 10.5% 7.5% 10.2% Services 7.7% 7.8% 7.8% 8.0% 7.8% 8.1% 8.5% 7.2% 8.2% Trade and 8.3% 9.7% 5.8% 6.7% 9.5% 9.8% 10.0% 7.5% 8.2% related Communication 10.4% 15.6% 17.4% 18.8% 19.2% 20.1% 20.5% 21.9% 22.1% Financial 10.1% 10.7% 8.3% 10.8% 11.4% 10.2% 11.9% 9.0% 10.1% intermediation GDP growth at 14.8% 15.9% 15.4% 14.3% 12.4% 16.8% 18.3% 13.8% 14.5% current prices Source: MoFEA and BOT

47 5.3 Agricultural Sector Performance

Activities of the sector need to be carried out legally and in a regulated manner in order to provide a level playing field for all its actors and ensuring product quality and standards in order to avoid jeopardising the country’s participation in regional and international markets, preventing the spread of diseases, protecting consumers interests, protecting the environment, land degradation, overfishing and overstocking. During the period under review, there were preparations and review of draft legislations of the Agricultural Resources Management, plant Genetic resources for Food and Agriculture. Four crop laws were gazetted for implementation of crop industry legislations for tea, pyrethrum, cashew nut and sugar. Regulations were prepared for the user Cashew nut Export Levy. The Livestock Identification, Registration and Traceability Act No 12 of 2010 and the Grazing and Animal Feed Resources Act No 13 of 2010 were enacted.17 There are still gaps in policy, legal and regulatory framework regarding land, financing, insurance, contract farming, valuation of agricultural land, enforcement of quality and standards, weights and measures, which hinder the sector from developing to its full potential.

The ASLMs/LGAs extended necessary support to the sector through the provision of critical inputs (i.e., fertilisers, improved seeds, improved seedlings, improved bulls and heifers, agrochemicals, disease control drugs), facilitated the availability of farm machinery and implements, financed production and marketing infrastructure and value addition facilities; supported cooperatives to manage WRS and to acquire finance from financial institutions; trained farmers in classrooms, shamba darasa and also through lead farmers; trained power tiller operators, prepared and distributed guidelines for extension staff; provided advisory and technical backstopping directed towards specific intervention areas such as selected irrigation schemes, crops, livestock and fisheries to enhance production, productivity and food security.18

As the result of the aforementioned ASLMs/LGA efforts and support, the performance of the agricultural sector has improved as discussed in the sub-sequent sections.

5.3.1 Food Crops Performance

The major staples include maize, sorghum, millet, rice wheat, pulses (mainly beans), cassava, potatoes, bananas and plantains. Among food crops, cereals are the major crops grown in Tanzania. The area planted with cereals is 4,798,071 hectares which represents 61% of total food planted area followed by roots and tubers (14%) pulses (12%) and oil seeds (7%). Among cereals, maize production is higher than any other cereal in Tanzania with a total production of over 75% of total cereal produced. Production patterns oscillate dramatically, according to the shifting weather conditions in a given harvest year.

Generally, the production of food crops increased over the period 2009 – 2010 and this was mainly due to a favourable weather. According to MAFC Annual Reports for 2009 and 201019 maize production increased from 3,324,000 tonnes in 2009 to 3,326,000 tonnes in 2010 which is equivalent to 0.1 per cent increase. Rice production decreased from 886,000 tonnes to 868,000 tonnes from 2009 to 2010 which is equivalent to a decrease of 2 per cent. Wheat production increased from

17 Livestock Acts no 12 and 13 of 2010 18 See the Annual reports of MAFC, MLFD,MTI and PMO-RAG 2009/10 and 2010/11 19 Annual Reports of MAFC 48 94,000 tonnes to 95,000 tonnes from 2009 to 2010 respectively. Millet/sorghum production increased from 204,000 tonnes in 2009 to 929,000 tonnes in 2010 which is an increase of 355.5 per cent. Cassava production increased from 1,759,000 tonnes in 2009 to 1,972,000 tonnes in 2010 which is an increase of 12.1 per cent. Beans and pigeon pea production showed a slight decrease from 1,184,000 tonnes in 2009 to 1,116,000 tonnes in 2010 which is 5.7 per cent decrease. Banana production increased from 991 tonnes to 1,073 tonnes from 2009 to 2010 respectively, this is an increase of 8.3 per cent. Sweet potato production showed a slight increase from 1,381,000 to 1,392,000 tonnes which is an increase of 0.8 per cent.

Annual staples demand in Tanzania is about 11 million tons with maize and rice accounting for half of the total. Tanzania’s average yields for maize and rice have been growing as the result of intensive farmer to farmer extension, use of fertilizers and improved seed varieties and increasing irrigation facilities. It seems also that these efforts have contributed enormously to improved agricultural productivities for some key staple food crops (see Table 5.2).

Table 5.2: Changes in productivities of sample food crops20

Crop Unit 2008 2011 Change over the period (%) 2008/2011 Maize(Mbozi, Mufindi, Tons per 0.44-1.23 4-6 87.8-8091 Maswa, Bariadi) Hectare Rice(Mbarali, Lindi, 0.99 4.5-7.5 Tons per Mvomero, Maswa and 54.5 Hectare Bariadi) Irish Potatoes(Mufindi, Tons per 2.5 12.5 500 Njombe and Mbeya Rural) hectare Banana(Muleba, Bukoba Kilograms 25-30 80-110 320-367 Rural, Kasulu) per bunch

The challenge is how to spread widely the responsiveness of the farmers to the new technologies so that many adopt them and become more productive. For example, currently 4.8 million hectares produce a total of 5.5 million tons of cereals which works out to a yield of 1.146 tons per hectare. Production would jump to 6.876 million tons by increasing yield by 25% to 8.251 million tons by increasing yield by 50% and to 12 million tons by doubling yield to 2.292 tons per hectare. In tobacco production strict observance of best practices by tobacco farmers has been made possible by close supervision enforced by marketing regulations.21 This is difficult in crops with many market outlets like maize and rice. However the production and marketing groups and associations are increasingly taking the responsibility to exert pressure on the observance of best practices and in time could exercise the close supervision of members.22 ASLMs should continue to improve the input supply and market infrastructure and influence the government to improve financial services for the sector.

5.3.2 Cash Crops Performance

As depicted in Table 5.3 most of the cash crops showed an increase in production from 2009 to 2010 with the exception of cotton which decreased by 38.7%. The

20 DASIP Annual Reports, ASDP Evaluation Reports, Calculations by the ASR/PER 2011/12 Team 21 Tobacco Board Annual Report 22 Example Lindi Dairy Cattle Group, Mbarali Rice Producers Group 49 improved performance is attributable to better weather and the investments in the sector to improve the performance of respective cash crops.

Table 5.3: Cash Crops Production 2007-2010 (Tonnes)

Crop 2007 2008 2009 2010 Change (%) 2009/10 Cotton 199,954 200,662 267,004 163,644 -38.7 Tobacco 50,784 55,356 60,900 130,000 113.5 Sugar 279,494 276,605 279,850 317,000 13.3 Tea 34,763 34,770 33,160 55,699.13 68.0 Pyrethrum 1,000 1,500 3,320 5,000 50.6 Coffee 33,708 58,052 40,000 60,575 51.4 Sisal 33,039 33,000 26,363 35,000 32.8 Cashew nut 92,573 99,107 74,169 121,070 63.2 Source: MAFC

5.3.3 Livestock Performance

The national picture in terms of the performance of the the livestock sub-sector is quite encouraging. According to the data provided in Table 5.4, there were improving trends in both meat and milk production during the period 2005/06 – 2009/2010. The main reasons include the recent efforts being made to improve the sector as well as the strong demand and prices for meat and milk.

Table 5.4: Livestock Production (2005/06-2009/2010) TYPE OF YEAR LIVESTOCK 2005/06 2006/07 2007/08 2008/09 2009/10 MEAT PRODUCTION (TONNES) Beef 210,370 180,629 218,976 225,178 243,943 Goat/Sheep 78,579 80,936 81,173 82,884 86,634 Pork 29,925 31,721 33,307 36,000 38,180 Chicken 68,420 77,280 77,250 78,168 80,916 Total 388,294 370,566 410,706 422,230 449,673 MILK PRODUCTION (‘000 LITRES) Indigenous 941,815 945,524 980,000 1,012,436 997,261 cow Highbred 470,971 475,681 520,000 591,690 652,596 Cow Total 1,412,786 1,421,205 1,500,000 1,604,126 1,649,875 EGG PRODUCTION (‘000) Eggs 2,145,000 2,230,900 2,690,000 2,806,350 2,917,875 SOURCE: Ministry of Livestock Fisheries and Development

5.3.4 Fisheries

Tanzania is endowed with a long coast line of approximately 1000 kilometres along the Indian Ocean and many lakes and rivers with rich potential for fishing. In addition fish farming can be practiced in many districts blessed with ample water in dug out ponds and dams. The national fisheries policy and strategy lay down the nation’s goal for the fisheries sector should be the preservation and development of the fisheries resources for the benefit of the present and future generations.23

23 The National Fisheries Sector Development Strategy, The Annual Reports of MLDF and the Budget Books 2008/09 to 2011/12 50 Implementation of this goal has required the ASLMs to cooperate with stakeholders, including the Local Government Authorities, fishers and their families, processors, transporters and traders of fish and fish products, NGO, CBOs, private sector, government institutions and concerned international organisations. During the period under review, the ASLMs strengthened extension services to fishermen and fish farmers, to construct fish receiving stations and modern fish markets, centres for hatching young fish and laboratories.24 In order to encourage exports, taxation rates are being reviewed.

The sector’s growth dropped to 1.5% in 2010 compared to 2.4% in 2009, but its contribution to GDP remained the same in 2010 as it was in 2009 at 1.4%.The per capita consumption of fish and fish products in 2010 was 8 kilogrammes compared to recommended FAO per capita consumption of 10.725

As Tables 5.5 and 5.6 show the trends in fish production and fish exports have not increase markedly. Therefore fisheries is an important sub-sector where although demand is high, production is rather limited despite the potentials. This is an area which needs to receive further strategic attention in future.

Table 5.5: Fisheries Production Trends Type of Water economic 2006/07 2007/08 2008/09 2009/10 Activity Fresh Water Fish 292,518.7 284,346.9 288,058.46 294,474 Marine Fish 48,590.1 43,498.5 47,615.80 52,683 Total Fish Production 341,108.12 327,845.4 335,674.26 347,157 SOURCE: Ministry of Livestock Fisheries and Development

Table 5.6: Fish Exports Year Tons Value in USD Value in shillings 2006 44,517.36 138,120,145.08 170,184,661,003.08 2007 57,821.02 173,272,670.44 213,211,258,838.15 2008 51,459.27 174,409,214.42 205,054,092,452.99 2009 41,201.45 161,053,645.66 207,447;119,888.45 2010 39,840.00 187,427,053.50 263,131,442,000.00 SOURCE: Ministry of Livestock Fisheries and Development

5.4 Availability of Inputs and Financing

The use of agricultural inputs in Tanzania is still quite low (fertilizers: 9kg per hectare; improved seed is used by only 10% of the farmers). Only 10% of the farmed area is ploughed by tractor. Low levels of technology, excessive reliance on rain-fed agriculture, insufficient knowledge and skills of farmers and lack of capital are among the major constraints impeding a rapid growth of the sector.26

In order to develop the agricultural sector, it is important to ensure timely availability of inputs for arable agriculture and livestock farming, including improved seeds, fertilizers, agro-chemicals and veterinary medicines, and inputs needed by the fisheries sector and to facilitate the farmers to have access to financial capital for procuring the needed inputs. ASDP does not clearly provide for this and as result input procurement, though a sector’s dominant activity (60.5% of the MDA Expenditure and 40.2% of the sector’s budget in 2009/10) is handled outside ASDP framework.

24 Annual Reports of the Ministry of Livestock and Fisheries 25 ibid 26 MAFC Budget Book 2011/12 51 5.5 Market Access Although access to markets is still a big challenge in most districts visited, the commitment to address it is growing in leaps and bounds. All of the visited districts have initiated activities to enhance farmers’ access to market, value addition and production diversification. Measures being pursued include: construction of market centres, increased use of warehouse receipt systems and grain banks, embarking on initiatives to improve access to market information and promotion of agro- processing for value addition such as sunflower in Mufindi District, grain milling and flour packaging in Kiteto, Rice Milling in Mbarali.27

5.6 Irrigation As of September 2010 Tanzania had 2,457 irrigation schemes covering 380,888 hectares out of which, 2,256ha (91.8%) are smallholder schemes; 27 ha (1.1%) are owned by Government institutions; 164ha (6.7%) are owned by investors in the private sector; and 10ha (0.4%) are owned by religious institutions. Over the last four years the irrigation area that has been developed as a result of DADPs implementation has increased from 264,388 hectares in 2006 to 331,490 hectares by June 2010 and to 399,775 hectares by March 2011, equivalent to an annual growth rate of 10.2%28. In nine months of 2010/11 alone the irrigation area developed was 68,285 hectares, equivalent to 50.4% of the area developed during the period June 2006 to March 2011. It was further observed that a total of 209 irrigators’ associations have been formed out of which 27 associations were formed in 2009/10.

The introduction of irrigation plus other inputs has increased yield of paddy and maize crops by two to four times compared to under rain fed conditions in some schemes. The higher yield improvements, however, were related to cases where irrigation was combined with soil fertility management, use of improved crop varieties and improved linkages between research and extension. In most of the schemes, the current productivity of irrigation is still low due to low application of improved agricultural inputs.29

5.7 Private Sector and NGOs participation The Agricultural Sector Development Strategy (ASDS) envisaged a transformation of the private sector-led through an improved enabling environment for enhancing the productivity and profitability of agriculture, with the removal of constraints to private sector involvement. The sector’s development would be facilitated through public/private partnerships, including increased contract farming (vertical integration), with a delineation of public/private roles.

The private sector engagement in the formulation of the DADPs has to a large extend been missing. To date the private sector has limited its involvement in working with the districts in activities such as distribution of inputs and construction projects (irrigation, roads, bridges, markets, dams, go downs and small abattoirs). Lack of active involvement by the private sector is said to be linked to lack of awareness of how it can become involved in ASDP.

27 Information from ASR/PER 2011/12 Mission Teams 28 ASDP Annual Reports 2008/09-2010/11,ASDP Evaluation Reports 29 ASDP Evaluation Reports 52 5.8 Overall assessment The assessment shows that ASDP is achieving the objectives of enabling farmers to have better access to and use of agricultural knowledge, technologies, marketing systems and infrastructure, all of which contribute to higher productivity, profitability, and farm incomes and promote private investment based on an improved regulatory and policy environment.

Areas of good Performance

 ASDP has grown as a recognised platform with strong high-level endorsement. This has led to expanded funding, support for consistent standards of implementation across the country and more meaningful local involvement.

 The production of various crops such as maize, paddy and livestock products (milk and beef) has increased as a result of farmer adoption of improved technologies, techniques and inputs. The review team noted that increased use of irrigation infrastructures and associated agronomic recommendations, agricultural inputs (improved seeds, fertilizers) and improved livestock breeds have enabled farmers to increase productivity in Lindi, Mufindi, Bukoba rural and Kigoma.

 Extension staff regularly visit farmers (smallholder farmers, livestock keepers and fishers) thus increasing farmers’ agricultural knowledge.

 Provision of livestock inputs, drugs, AIs, disease control measures, improved livestock breeding; provision of water for livestock keepers and livestock, development of aquaculture; use of tractors and power tillers, increased farmers’ access to marketing systems were noted to be responsible for increased production.

 Regulatory and policy environment has also been improved as seen in the number of agricultural marketing regulation and legislation and the number of LGAs that qualify to receive top-up grants/performance bonus and the number of progress reports submitted on time.

 The result of these improvements is the increase in production and productivity in major crop and livestock products and the increased value of agricultural exports.

Areas of bad performance

 DADPs investments are often too dispersed and lack prioritization which subject them to low productivity levels, inadequate risk management, limited commercialisation and difficulties in scaling them up

 Failure to construct larger dams for holding irrigation water for several seasons to meet the challenges of climatic variability has had a negative effect on agricultural productivity and raised the uncertainty of returns on irrigated farming investments.

53  Also irrigation facilities are not being fully utilised, irrigation efficiency is low and cropping frequency is below the potential.

 Delays in availing inputs to farmers through the voucher system and their effective use. Most of the time vouchers for planting fertilisers arrive at weeding time when growing fertilisers are required. The voucher entitles the eligible farmer to inputs for one acre. Since this eligible farmer has 2 acres, because of limited knowledge and lack of follow up, he applies the inputs for all the two acres, leading to poor results. Another problem is the belief by many farmers that what matters are fertilizers which can be used with unimproved seeds to produce better yields. ASDP has a monumental task to ensure they achieve adoption rates like those of tobacco farmers.

 Inconsistency of government policy on cross border trade frustrates farmers and leads to reduction in production especially the case of maize and paddy.

 Low level of investment capital allowed for DADPs funding of agro processing projects has stalled progress of this sector as many of the identified projects need higher amounts of capital.

 Data collection, cleaning, storage and analysis leave much to be desired. Witness data on fisheries in the budget speeches of 2010/11 and 2011/12 .The Review team experienced serious problems in getting data on time, in a form it could easily be used and that was consistent with other sources.

5.6 Recommendations

 DADPs investments should be concentrated in small geographical clusters and prioritised within a value chain approach that allows synergies that farmers and private enterprise can exploit.  Develop a proper balance in the support to be provided on infrastructure and equipment vis-à-vis the support to technical knowledge and organisational support to ensure knowledge provision that support both short-term and long-term needs.  Develop proper guidelines for field staff to facilitate farmers and their groups to mainstream environmental factors in all their activities  Provide knowledge to farmers on utilising fully their irrigation facilities and raising irrigation efficiency.  Work with stakeholders to ensure that inputs and input vouchers are availed on time.  ASDP should devise ways and means of tracking annually the adoption rates for farmers, livestock keepers and fishers and the productivity/yield changes.  ASDP should increase efforts at mobilising the involvement of the private sector in ASDP operations and increase investments in agriculture.  ASLMs need to encourage government to remove inconsistency of government policy on cross border trade.  ASDP should raise the level of investment capital allowed to DADPs to finance agro processing projects to facilitate success in value addition activities.

54 6. SECTORAL CONTRIBUTION TO FOOD SECURITY AND EMPLOYMENT

6.1 Introduction

This chapter has assessed the contribution of the agricultural sector to food security. Food security exists when all people, at all times, have physical, social and economic access to sufficient, safe and nutritious food which meets their dietary needs and food preferences for an active and healthy life.30

Food security has three key dimensions, namely, food availability, food access, and food utilization. Food availability implies sufficient production or imports to meet the food needs of the population. Food access refers to the ability of people to obtain food, either through their own production or by purchasing it with money earned from other activities. Food utilization means that the nutrient intake associated with food consumption is not impeded by inadequate nutritional information, poor sanitation, or problems in intra household distribution.

In Tanzania, the Food Security Act (1991) established the National Food Security Department under the MAFC. The department is responsible for formulating and reviewing policies on food security including food aid policy; formulating strategies and programmes on food security; carrying out overall monitoring of the food crops sub sector and liaising with the National Food Reserve Agency (NFRA) and the Disaster Management Department of the Prime Minister’s Office on all issues related to food situation in the country.

The development of agriculture has been an important objective of the Government. The focus has been on producing more food to enhance food security and alleviate poverty, with the ultimate goal of becoming self-sufficient in basic food requirements. The Government uses the following strategies to ensure the country’s food security:  Improvement in agricultural production incentives by promoting non- traditional export crops and food crops through liberalization of the whole process.  Supporting research and extension and improving its effectiveness.  Promotion of private sector participation in agricultural production, processing, storage input supply and marketing.  Reviewing and improving the legislation that affects private sector participation in the agriculture sector in farming and marketing.  Improving rural infrastructure.  Promotion of cross – border trade with neighbouring countries and export.  Improvement in post – harvest loss control.  Periodic monitoring and assessment of rural food situation on a more systematic basis through Early Warming and Crop Monitoring System.  Removing restrictions on trade at national regional and district levels, and reviewing the tax regime on food movement across districts, regions or national borders.  Restructuring Strategic Grain Reserve (SGR) to be able to operate efficiently and effectively.

The chapter has also assessed the contribution of the agricultural sector to employment. The sector is potentially a very important contributor to employment in

30 FAO Website: www.fao.org 55 the country. This is through all sub-sectors of agriculture like crops, livestock and fishing.

6.2 Food Production and Productivity

Attainment of food security objectives is impliedly more of increase in agriculture production and productivity. This is in line with Goal 4 of MKUKUATA II, Cluster I (Growth for reduction of Income Poverty) which has the following operating targets: a) Food security at household, district, regional, and national levels ensured through increasing food crops, livestock and fishery production; b) Nutrition of infant, young children and mothers promoted; c) Strategic Grain Reserve of at least 4 months of national food requirement maintained; d) Crop and livestock varieties suited to adverse conditions brought about by climate change introduced and adopted; e) Climate change projection and early warning and natural disaster response, coordination framework strengthened.

As already explained, growth in agriculture production and productivity is the main driving force in attaining food security objectives. But what has been the performance? The agriculture sector has been growing at an average real rate of 4.3 percent since 2000 to 2010, see Figure 6.1.

Figure 6.1: Real Growth rates of Agricultural Sector (2000-2010)

Source: URT, Economic Survey (2010)

MKUKUTA II sets a target of agriculture growth rate of 6.0% by 2015 from 2.3% in 2009 in order to reduce poverty and ensure food security. If an average growth rate of 5% t has not been achieved for the past 10 years, it is still quite challenging to achieve that the targeted growth rate of 6% in the will be medium term.

Regarding agricultural productivity, the performance has not also been good. According to Figure 6.2, the two indicators, i.e., Food Production Index (FPI) and Cereal Yield (crop in kilograms per hectare) suggest that the current degree of productivity in terms of output is not increasing. However, the value of that output increased steadily since 1990, as is shown by value added (in constant 2000 U.S. dollars) per employee in the agricultural sector.

56 Figure 8.2: Tanzanian production indices, 1970–2007 (1999–2001 = 100)

Source: Adopted from Kiratu, et al (2011)

The low level of agriculture production and productivity may likely have negative effects on the food security situation in the country.

6.3 What is the Food Security Situation in the Country?

One of the indicators of food security is the Food Supply and Self Sufficiency Ratio (SSR). SSR is in percentage terms. It is <100 for deficits, 100-120 for self- sufficiency and =>120 for surplus status. Analysis of trend data for this indicator (see Table 6.1) indicates that in recent years, Tanzania has been experiencing food self sufficiency situation. The last time the country experienced food deficit was in 2003/04 where SSR stood at 88%.

However, further analysis culminates into two major issues. First, food security situation in Tanzania varies from one region to another and from one season to another. Some perennial pockets and semi-arid central regions have been constantly being suffering from food shortages, particularly the coastal regions of Pwani, Lindi, Mtwara and Tanga, together with the semi-arid central regions of Dodoma and Singida and some parts of Shinyanga, Morogoro, Kigoma and Mara. On the other hand, the southern highland regions of Rukwa, Mbeya, Iringa, and Ruvuma have been constantly experiencing food surpluses.

57 Table 6.1: Mainland Food Supply Analysis and Self Sufficiency Ratios Year Production Requirement Gap SSR Comment (Tons) (Tons) (-)/Surplus (%) (+) (Tons) 05/06 9,668,817 9,435,914 232,903 102 Self sufficient 06/07 10,945,350 9,748,430 1,196,920 112 Self sufficient 07/08 10,660,301 10,033,484 626,817 106 Self sufficient 08/09 10,872,336 10,337,981 534,355 105 Self sufficient 10/11 10,921,536 10,578,196 343,341 102 Self sufficient Source: FAO Website

Secondly, despite the recorded impressive SSR performance in recent years, the set targets have not been met. Available data for three consecutive years (2007/08- 2009/10) indicate that the realized (actual) SSRs were persistently below the set targets (see Figure 6.3).

Figure 6.3: SSR in Mainland Tanzania: Actual Vs Targets

Source: MAFC

It is worth noting that Tanzania’s main source of food for the majority of the people is through agricultural production. Although the country is not drought prone, food insecurity in the country is both transitory and chronic in nature. Transitory food insecurity arises from instability of food production, food prices, and/or household’s income which is common in marginal areas of the central and northern regions of Dodoma, Singida, Shinyanga, Tabora, some parts of Tanga, Arusha, Kilimanjaro and Manyara.

Even in areas with surplus production, farming households sell their surplus product immediately after harvest. As a result six to nine months later in the year many do not have their own food or cash to purchase food from the market. Other factors contributing to seasonal food insecurity include, overselling due to competing needs for cash including health, education and clothing. In addition inadequate postharvest management knowledge contributes to food insecurity. This scenario perpetuates the cycle of food insecurity, as it causes people to change their eating patterns and habits. This is detrimental to their health, nutritional well-being and productivity.

58 Continuous or chronic food insecurity is also common to the urban poor households, the rural landless and the resource poor smallholder farmers and pastoralists.

The situation with regard to food availability, accessibility and utilization is analysed further below: a) Food Availability

As already noted, the country’s food self-sufficiency measured by the Self Sufficiency Ratio (SSR) was over 100 although there were some regions and districts experiencing food shortages even when SSR was over 100. This is so due to distributional problems within the country.

The major factors affecting food availability are low production due to low productivity of land, labour and other production inputs, high incidences of crop and livestock pests and diseases, inadequate processing, storage and marketing infrastructure. This situation is compounded by inadequate availability of finance to obtain productivity enhancing inputs or capital and limited availability of support services and appropriate technologies. Other factors affecting food availability include high pre and post-harvest losses due to pests, diseases and climatic conditions. It is estimated that pre-harvest losses account for over 30% of all crop losses in the country while post harvest losses range from 30%-for cereal grains and legumes to 40% - 80% for fresh vegetables and fruits.

It is however important to note that SSR in Tanzania, may not accurately capture the extent of food availability in the country because it does not take into account other food commodities that are produced such as livestock and livestock products; wild animals; fish and other marine or aquatic products, fruits and vegetables. It is important that these other types of foods are captured and included in the determination of the country’s SSR. The credibility of this information is important for food security monitoring system in the country. b) Food Accessibility

In Tanzania, the transport network is the major problem facing physical accessibility of food in food deficit areas. Food production and hence surpluses is concentrated in the famous big four regions (southern highlands regions) of Rukwa, Mbeya, Iringa and Ruvuma. The traditional food deficit areas which are mainly located in the central corridor and parts of northern areas suffer the shortage. The fact that the country is vast, involving long distances between food surplus regions and food deficit regions, food accessibility becomes a critical problem given the poor state of transport network and high costs of transport. This situation translates into high prices of food in deficit areas and given the country’s poverty status especially of rural households, this affects access to food by low income rural as well as urban populations as their purchasing power is eroded. c) Food Utilization

Prevalence of under nutrition is an important aspect of the food security situation. As shown in Figure 6.4, two indicators, i.e. under-five underweight and under-five stunted show a positive progress. However, the pace of improvement has been too slow to meet the MDGs targets of 2015 (Figure 6.4). Daily calories supply per capita stood at 2,032 in 2007 which was lower than the corresponding figures for Africa (2,462), developing countries (2,675) and developed countries (3,285). The cause

59 of this cannot be wholly attributed to food shortages per se, but partly due to little community’s knowledge on food preparation, consumption and hygiene.

Figure 6.4: Status of Under-Five Nutritional Indicators

Source: ADB Tanzania Country Strategy Paper 2011-2015

Who are the food insecure people in Tanzania?

Studies31 indicate the following groups as the most food in secure:

 Poor income people, comprised of low income earners mainly derived from crop production  Wage labourers whose income is from food crop production  Remittance dependants who mainly rely on food crop production  Natural resource dependants who depends mainly on food crop with supplement from income generated from sale of natural resources  Small farmers deriving their income mainly from food production

The most secured people are salaried, traders, skilled and fisher folks.

6.4 Employment Status of the Agriculture Sector

6.4.1 Employment Share of Agriculture

In Tanzania, agriculture is predominantly a rural phenomenon where 74% of the total population lives. Statistics32 indicates that the country’s share of employment in the agricultural sector has been declining over time, from 90% in 1970 to 77% in 2006 (see also Figure 6.5). This decline is attributed to the rapid expansion of other sectors like mining and service. Despite this decline, the sector still employs the vast majority of the total labour force. The sector accounts for about 23% of the GDP at 2001 in constant prices. Of the total labour force in agriculture, 55% are women.

31 E.g. World Food Programme report (2007) Comprehensive Food Security and Vulnerability Analysis; ESRF (2005), Agriculture Development and Food Security in Sub Saharan Africa: Tanzania Country Report 32 ASR and PER (2010/11) and ILFS (2006) 60 Figure 6.5: Employment Share of Agriculture

Source: ASR and PER (2010/11) and ILFS (2006)

The fact is that since the sector employs the majority of the labour force, most of whom are women, and contributes significantly to the Gross Domestic Product (GDP), it has an important role to play in employment creation, food security and poverty reduction in general.

Features of the agricultural sector employment status

The dominant mode of employment in agriculture is self-employment with households operating smallholdings and using low technology, simple and rudimentary tools and hence low productivity. The sector is also characterized with an acute problem of under-employment. According to the ILFS (2006), for example, the agricultural sector had the highest percentage of under-employed people (76.3%) followed by the informal sector (10%) as shown in Table 6.2. The main reason is the seasonality nature of the sector which leaves the labour force idle during the off-season.

Table 6.2 Under-employment by persons by sectors and sex (2006) Sector Male Female Total % Central/Local Government 3,422 1534 4,956 0.4 Parastatal 430 608 1,038 0.1 Agriculture 526,240 459,577 985,817 76.3 Informal 61,031 68,312 129,343 10.0 Other Private 44,946 18,625 63,571 4.9 Household economic activities 25,121 82,736 107,856 8.3 Total 661,190 631,392 1,292,581 100.0 Source: ILFS, 2006

Further, it should be noted that since agriculture in Tanzania is predominantly rural oriented, the segment of the society mainly affected by under-employment is rural dwellers, who are also vulnerable to poverty. The ILFS, 2006 indicate that 58% of under-employed persons were rural dwellers (see Figure 6.6).

61 Figure 6.6: Under-employed persons by area and Sex, 2006 (%)

8%

13%

58% 21%

Dar es Salaam Other Urban Total Urban Total rural

Source: ILFS, 2006

It is worth noting that under-employment wouldn’t have been a serious problem if the sector was not rainfall dependent. Unfortunately, the sector is mainly rainfed with little irrigation schemes. Latest indicators by the World Bank’s African Development Indicators (WDI) indicate that the percent of cropland that is irrigated stood only at 1.8 in 2003 which is low by any standards. This is below the averages for Sub-Saharan African which stood at 3.5% and far below the world average which stands at 18%. This makes it difficult to mitigate the vulnerability of not only seasonality of agriculture but also to variability in weather patterns and periodic drought.

6.4.2 Employment Promotion Objectives and Strategies and Implementation Challenges

Formation of effective agriculture policies and strategies is one of the government efforts to promote employment in the agriculture sector. One of the key objectives is to ensure effective utilization of the labour force in rural areas in improving agriculture and livestock production.

There are many strategies which the government has put in place in order to promote employment. But specifically, in the agriculture sector, it employs several strategies to achieve this objective:33

 To increase agriculture productivity by improving supportive services to farming.  To improve use of farm implements, fertilizers and pesticides in farm enterprises.  To sensitize individuals in order to invest in agriculture and livestock sectors in line with the national investment laws.  To facilitate the procedures for nationals to acquire land and certificates for rights of occupancy. Besides, conditions for investments are being made more attractive as an incentive for attracting more investors.

33 See the National Employment Policy 1997, 2008) 62  To sensitize people to initiate off-farm activities in order to sustain their employment and to increase their incomes. Such activities include small scale industries, fishery, beekeeping, lumbering, pottery etc.  To improve and develop basic infrastructures required for the development of agriculture production. These include roads, water supply, electricity provision, loans with low interest rates, good prices to farm produce etc  To maintain and sustain environmental development.  To strengthen District Councils through deployment of personnel with technical and managerial skills to assist farmers in modern agriculture practices and emphasize on per capita productivity.

Clearly, these strategies for employment creation in the agriculture sector are not different from those for improving agriculture sector in general. It therefore means that one of the effective ways to promote employment in this country is to strengthen the conditions for increased performance of the agricultural sector.

From the aforementioned analysis, there are three critical issues need attention in order to promote employment creation in the agriculture sector:

 In general, the agricultural and rural sector experiences high underemployment due to seasonality nature of the sector.  The high reliance of the sector on rainfall which is increasingly uncertain significantly leads to underemployment in the sector.  Low agricultural productivity is due to low level of agricultural mechanization.

Therefore significant improvement in creation of sustainable employment in the agriculture sector can be achieved through the following measures:

 Increasing efforts on irrigated farming: Under ASDP an important milestone has been made but still a lot remains. Irrigated farming is crucial to the stabilization of agricultural production in the country, a result of which will be improved food security, increased productivity and incomes for farmers, and an increase in the production of higher valued crops such as vegetables and flowers.

 Enhanced use of agricultural mechanization- farm implements, fertilizers and pesticides. The ASR team in the survey of the selected districts observed the availability of agricultural inputs (especially fertilizer) complemented by availability of tractors and power tillers was having a positive impact in increasing agriculture productivity. However, two things emerge as challenges in the implementation of this. The first one is a need to have needs assessment which would determine what kind of support is needed. This is important in order to have the right kind of support in the right locality and avoid misallocation of resources which is wastage. The second issue is a need to have a clear mechanism at local levels to ensure effective ways of channelling the same to the intended beneficiaries. The existing system at local levels is rather ad hoc in some cases and may likely need closer supervision from higher levels.

 Supporting of off farm activities should be prioritized as this would complement efforts to enhance the quality of rural employment and will help to arrest the migration of labour to the cities. Although the current trend is towards increasing employment in off farm activities, the increase is currently at a small pace and without coordination and support.

63 6.5 Recommendations to Improve Food Security Situation and Employment in the Agricultural Sector

On the availability of food  Continue with further mobilizing resources for effective and efficient use of the irrigation potential in the country.  Promote better handling and improved storage of agro-products to reduce post-harvest losses.  Enhance agricultural productivity through development of appropriate technology packages which will require focused efforts in Research and Extension services.  Include other food commodities in calculating SSR. These are livestock and livestock products; wild animals; fish and other marine or aquatic products, fruits and vegetables. This is important for ensuring monitoring of food security situation in the country.

On the accessibility of food  Improve access of producers and traders to agricultural markets by improving rural market facilities and infrastructure.

On the food consumption and utilization (nutritional issues)  Impart knowledge at community level on food preparation, consumption and hygiene.  Communicate information on better nutrition and hygiene practices to community through extension services and or part of basic school curricula.

On enhancing employment in the agricultural sector  Continue and enhance the on-going efforts on irrigated farming.  Promote increased productivity through improved use of agriculture implements, fertilizers and pesticides with special emphasis on effective management of the channelling these at local levels.  Support the development of off-farm activities to in a more organized manner.

64 7. TRANSFORMATION OF SUBSISTENCE TO COMMERCIAL FARMING

7.1 Conceptual Framework

The characteristics of subsistence agriculture are that it is principally carried out for family survival — with no or little extra outputs available for sale while commercial farming is producing for a known market at a calculated profit.34 While there may be a minimum threshold in terms of acreage in order to produce for a given market at a profit, commercial farming is not defined in terms of bigness but the ability of the farm operation to produce a profit. However, commercial agriculture tends towards large-scale production for profitable sales intended for widespread distribution to wholesalers or retail outlets. The scale makes it easier to afford the expensive nature of capital formation and implementation of technological processes. The main types of commercial agriculture include intensive commercial agriculture, extensive commercial farming and plantation agriculture35. Under appropriate conditions, the sustenance of agriculture in the country can be transformed to any of these forms of commercial farming.

The Tanzania Development Vision 2025 underlines the tradability of agricultural production if agriculture is to propel the countries development. This is why one of the key objectives of ASDP is the creation of a favourable climate for commercial activities. Tanzanian government has also undertaken the creation of an enabling environment for the transformation of subsistence agriculture to commercial farming through improved policies to promote market development and regulatory framework for private sector development.

The long route to transforming agriculture begins with empowering farmers to produce more than they consume and for small farms this is achieved by use of modern agricultural inputs and better farm management practices. Unfortunately Tanzanian farmers use very little inputs. In 2010/11, it was estimated that on average a smallholder farmer used about 79.5 kilograms of fertilizers per hectare. For farmers who received subsidized fertilizers they may have used on average 100 kilograms of fertilisers per farmer36. This is very low when compared to usage of fertilizers in neighbouring countries. Unsurprisingly, food crop productivity has been very low. In the six years (2001/02– 2006/07) average food crop productivity was 1.7 tonnes per hectare, which has risen to 2.1 tonnes per hectare in 2007/08 -2009/10, whereas good management and optimal fertilizer use should result in yields of 3.5-4.2 tonnes per hectare.

7.2 Rationale and Viability of Commercial Farming

Tanzania’s agriculture remains today a traditional, smallholder production system, even though the modernization of agriculture has been on the development agenda of the Government since independence in 1961. Tanzania could be a major food- exporting country, but so far the country’s agricultural potential is largely undeveloped. Only 11 per cent of the total land area suitable for agriculture (about 44 million hectares) is under cultivation, mostly by smallholder farmers.

34 Tony Walters, 2007 35 Wikipedia Encyclopedia on subsistence Agriculture 36 MAFC Minister’s Budget Speech, 2011/12.

65 More encouragement of farmers on the use of improved seeds with fertilizers could yield better gross margins for maize and paddy. In Lindi District, farmers using fertilizers and improved seeds were able to get 240% more yield per hectare and 125% more income than farmers who did not. In Kigoma district the average performance of farmers using the input package was 225% above the performance of those who were not using the package. Improving crop productivity and profitability requires the government to continue the comprehensive approach of encouraging smallholders to use both improved variety seeds and fertilizer as a package.

To sustain and expand production diversification at the farm level, yields of food crops need to increase at the same time to meet rising domestic and regional demand. However, food crops are still mainly produced for subsistence and the incentives to produce them for the market are not in place. Existing taxation erodes the incentives to produce food crops in general and to produce for the market in particular. Furthermore, Tanzania faces the problem of inefficient food markets within the country causing regions with a surplus to export their produce to neighbouring countries because of the poor state of transport infrastructure within Tanzania, undeveloped market information systems regarding prices and needs of other regions, and unpredictable GoT interventions for certain food crops such as maize.

While the GoT has realised the importance of promoting commercialisation at the policy level, implementation has been lagging behind. Currently, lack of medium and long-term financing, lack of infrastructure, duplication and multiplicity of taxes levied on producers in the agricultural sector result in low investments in the agricultural sector in general and agricultural processing in particular.

There is a big potential for commercialising the livestock sector in terms of incomes and employment generation. The existing herd of cattle, goats and sheep is quite large and widely spread and yet there is bigger land to support productive livestock rearing. There is grain production potential to support improved livestock feeding. The country is strategically located for making good returns from exporting its livestock and livestock products.

The fishing potential of Tanzania along the 1,600 kilometres of Indian Ocean and the two large lakes of Tanganyika and Nyasa is still largely unexploited, but production is constrained by a shortage of modern fishing equipment to enable fishermen to reach deep waters. Inadequate regulatory and supervisory capacity has led to over- fishing in Lake Victoria. Furthermore, the fish industry faces the challenge of having to comply with quality and sanitary standards imposed by importing countries. The development of aqua culture-fish farming- is a lucrative activity which in addition to providing better nutrition to the family adds to income earning capability. Because of the big demand for fish in many localities, many fish farmers are expanding the size and number of their fish ponds to cash on the unsatisfied demand. The support from extension staff is to enable the fish farmers to become more productive and so earn more money.

7.3 Enabling Conditions for Transformation of Subsistence Farming to Commercial Farming

Strategies for promoting effective and rapid transformation of subsistence farming to commercial farming should be guided by promoting interventions targeted at

66 creating the requisite enabling conditions. To a large extent the current initiatives led by ASDP are quite relevant but it is time to give more targeted, dramatic and focused government policy attention to the following conditions:

A strategic enabling legal and regulatory environment for private sector participation in agriculture

Strengthening the legal and regulatory environment for direct private sector participation in the agriculture sector is key. There is need to revisit land laws, tax regimes and other pertinent legislations and regulations that adversely constrain the transformation of subsistence farming to commercial farming. These should also be the laws and regulations that directly promote affordable financial services for agriculture and tangible and motivating incentives for agro-processing and agro- markets development.

Intensification of relevant agriculture extension services

Many farmers still lack the basics of modern farming. They need to know the type and quantities of inputs to apply, the time of application, the type of improved seeds, the amount, the spacing and the time of planting. Transformation of these farmers to commercial farmers will need intensified, capable and workable agriculture extension efforts to impart technical and entrepreneurial skills.

Transport and communication infrastructural development

A well-developed network of rural roads and trunk roads as well as railways is essential for promoting commercial agriculture as it facilitates cost-effective movement of agricultural products from farmers to markets and agricultural inputs and other goods from suppliers to the farmers. Communication facilities allow farmers to have access to information regarding prices and market conditions for crops, livestock, fish and other products.

Markets and market linkages

Addressing the availability of markets for the crops, fish and livestock products produced in Tanzania and building the linkages between markets and agriculture producers are key to effective commercialization. It is important that we pursue both local and export markets. Instead of simply being reactive to the available demand, proactive interventions to stimulate local demand for locally produced agricultural products should also be pursued. This, for example, could include sensitization and incentives aimed at the internal markets to change eating habits so as to get more Tanzanians to use the available foodstuffs.

There is also a need to accord priority to the development of information systems for remotely located farmers so that they can make informed decisions for their farming activities and outputs.

Farmers’ improved production and entrepreneurship skills

Making various business development services available to the farmers and stakeholders on the various agricultural value chains can help build the capacity in critical production and entrepreneurship skills for enhanced commercial operations, including proper choice of agricultural activity to pursue profitably.

67 Improved availability of productivity enhancing technologies, farm inputs and credit facilities

Agricultural development requires availability of affordable productivity enhancing mechanical devices, agrochemicals, fertilizers, accessible agricultural knowledge, technologies and improved seeds and investments of a medium to long-term nature. Currently financial institutions in the country do not provide medium/long-term financing. Therefore farmers who wish to get involved in dairy ranching, piggery projects or irrigation projects must fend for themselves.

68 8. PUBLIC EXPENDITURE REVIEW

8.1 Introduction

The Agricultural Sector in Tanzania consists of four Lead Ministries (ASLM), that is, MAFC, MLDF, MIT and PMO-RALG. An analysis of public expenditure in the sector should show allocation and expenditure of funds in each of the lead ministries. This public expenditure review focuses on four key issues of assessment: to assess sector actual budget allocations against revised budget in the financial year 2010/11; to assess the sector’s share of total budget in the last five years describing the major shift in composition; to asses if sector spending was consistent with the set sector priories in the financial year 2010/11; and to evaluate the decentralization of DADPs expenditures to LGAs in terms of use of the DADPs funds and value for money obtained from DADPs interventions.

Accordingly, this chapter is set to assess the following: trends in actual nominal versus real expenditure in the agricultural sector for the past five years; analysis of the budget performance for the past five years including recurrent and development expenditure; trend of the agricultural sector share versus other sectors in budgetary allocation, comparison of budgeted versus actual expenditure for the major budget items of MAFC; comparison of the performance of the agricultural sector versus resource allocation, and assessment of value for money for the DADPs funds.

8.2 Trends of nominal versus real actual expenditure for the ASLM

The total funds approved for the ASLM for the financial year 2010/11 amounted to TZS 396.99 billion of which 294.2 billion or 74% was for MAFC, 58.79 (15%) for MLFD, 9.86 (2.5%) for MIT, 19.46 (4.8%) for Irrigation, and 14.68 (3.7) was for PMO-RALG. The 2010/11 allocation is less by 9.6% compared to the previous allocation to the sector of TZS 439.35 billion in 2009/10. However, a two year comparison does not give us a complete picture of the financing of the agricultural sector because allocation of funds to the sector varies every financial year. Also, the purchasing power of the local currency has been changing over years. Thus, we need to look at the trends of the financing of the sector and the real allocations (value of money) overtime.

An analysis of trends of nominal and real expenditure of the ASLM is presented in Figures 8.1 & 8.2. In nominal terms, expenditure on the agricultural sector has increased by more than six times for the past five years – i.e. from TZS 81.9 billion in 2006/07 to 362.66 in 2010/11. This represents an average annual growth rate of 86 percent.

In real terms (i.e. controlling for the change in the value of money), expenditure on the agricultural sector has increased from TZS 51.6 billion in 2006/07 to 191 billion in 2010/2011 (Figure 8.2). Thus, public expenditure on the agricultural sector has been increasing in both nominal and real terms for the past five years. The increased spending has led to increasing outputs of the sector in line with the strategic public investments in the agricultural sector in Tanzania. In particular, with the onset of KILIMO KWANZA initiative, actual expenditure on the sector, through MAFC, increased from TZS 106.5 billion in 2008/09 to 270. 96 billion in 2010/11; this represents a nominal increase of 154.4 %, or a real increase of 129.1% in a period of three years. This is an outstanding achievement in the history of the development of the sector during the decade. Of course the crucial issue then, as we

69 pose and respond later, is the extent to which such increases in the agricultural budget translate into improved performance of the sector.

Figure 8.9: Trends of the Nominal Expenditure of the ASLM (TZS Billions)

Figure 8.10: Trend in Real Expenditure of the ASLM (TZS Billions)

8.3 Budget Performance in the Agricultural Sector

Budget performance refers to the proportion of the approved funds released. Overall, in the past five years, budget performance for the agricultural sector has been improving as indicated in Table 8.1 and Figure 8.3. Release of approved funds or budget performance increased from 41.71% in 2006/07 to 74.54 by 2009/2010. The best performance was recorded in two lead ministries in 2010/11–MLFD (104.52%) and MAFC (92.1%).

70 Table 8.8: Approved Budget versus Actual Release of Funds for the ASLM (Billion TZS)

2006/07 2007/08 2008/09 2009/10 2010/11 Funds Released Funds Released Funds Released Funds Released Funds Released ASLM APPROV APPROV APPROV APPROV APPROV ED Amou Percent of ED Amou Percent of ED Amou Percent of ED Amou Percent of ED Amou Percent of nt Approved nt Approved nt Approved nt Approved nt Approved 106.5 185.6 270.9 123.20 51.10 41.48 131.91 88.40 67.02 111.22 95.76 283.00 65.60 294.20 92.10 0 6 6 MAFC

24.01 5.30 22.07 48.09 28.50 59.26 41.87 28.30 67.59 45.08 41.85 92.83 58.79 61.45 104.52 MLFD

2.65 2.90 109.43 5.80 4.68 80.69 5.98 7.11 118.90 9.22 7.87 85.40 9.86 9.12 92.49 MTI

0.00 0.00 0.00 0.00 0.00 0.00 14.88 15.03 101.01 15.64 10.13 64.77 19.46 10.30 52.93 IRRIGAT ION

46.50 22.60 48.60 66.66 66.68 100.03 71.12 70.91 99.70 86.41 81.97 94.86 14.68 10.83 73.77 PMO- RALG 188.2 227.8 327.4 362.6 196.36 81.90 41.71 252.46 74.57 245.07 92.97 439.35 74.54 396.99 415.81 6 5 8 6 TOTAL

Figure 8.11: Budget Performance (% of approved funds released) for ASLM 2006/07 – 2010/11

71 8.3.1 Trends in Recurrent Budget for the ASLM

Performance of the recurrent budget for the agricultural sector improved from 57.68% in 2006/07 to 94.5% in 2010 – recording a remarkable achievement (Table 8.2 and Figure 8.4). Performance of the MAFC budget increased from 55.37% in 2006/07 to 96.36% in 2010 – also recording a big change during the period. Analogously, the budget performance for the MLFD improved from 24.82% to 85.88%. The rest of the lead ministries had their budget performance also improved significantly for the past five years.

72 Table 8.9: Approved Recurrent Budget versus Actual Release of Funds for the ASLM (Billion TZS)

2006/07 2007/08 2008/09 2009/10 2010/11 D D D D D

ASLM E Funds Released E Funds Released E Funds Released E Funds Released E Funds Released V V V V V

O Percent O Percent O Percent O O R R R R R

P of P of P of P Percent of P Percent of P P P P P A Amount Approved A Amount Approved A Amount Approved A Amount Approved A Amount Approved

MAFC 77.3 42.8 55.37 71.85 58.5 81.42 93.7 64.1 68.41 190.8 183.85 96.36 190.3 178.6 93.85

MLDF 14.1 3.5 24.82 18.67 18.6 99.63 21.5 18.5 86.05 37.25 31.99 85.88 34.04 36.7 107.81

MTI 0.75 2.8 373.33 3.44 3.44 100 3.5 4.64 132.57 7.83 6.67 85.19 8.01 7.14 89.14

IRRIGA TION 0 0 0 0 0 0 1.69 1.84 108.88 2.54 2.52 99.21 2.57 1.17 45.53

PMO- RALG 24.7 18.3 74.09 66.17 66.19 100.03 65.97 65.76 99.68 86.38 81.92 94.84 15.36 14.07 91.6

TOTAL 116.85 67.4 57.68 160.13 146.73 91.63 186.36 154.84 83.09 324.8 306.95 94.5 248.99 215.3 201.67

Figure 8.12: Performance of the Recurrent Budget for the ASLM

73 8.3.2 Trends in Development Expenditure for the ASLM

Release of funds for development expenditure as compared to the approved funds has been changing from year-to-year (Table 8.3 & Figure 8.5). We cannot conclusively say that performance of the development budget has improved because there have been ups and downs in the trend as indicated in Figure 8.5. For example, in 2005/06 release of funds was 18.2% of the approved budget. In 2008/09, release of funds was 99.7%; in 2009/2010 it was down to 17.9%; and in 2010/1, budget performance was 86.6%. Therefore, the trend of release of funds, or budget performance, for development expenditure in the agricultural sector is rather unstable and unpredictable.

Budget performance for the development expenditure in the agricultural sector is crucial for on-time completion of projects and realization of value for money in the investment projects. If some of the funds are delayed or not fourth coming, DADPs and national projects whose contracts are outstanding turn out to be expensive as contractors charge more for the delays, and at the same time price increases will require additional funds. Also, beneficiary communities of the DADPs funds will lose their confidence with the projects and thus compromise their local contribution to the same. Prioritization of projects due to the little money for DADPs sent to LGAs compared to their approved projects will be difficult and potentially leading to complains by those whose projects will have to be left out during the financial year. Hence, matching approved funds with actual release is important for harmonizing development activities in the agricultural sector particularly at the LGAs level. Otherwise, we need to approve projects in rounds. Each round may cover for example three years, so that there is a waiting least rather than a fixed list for a given financial year.

74 Table 8.10: Approved Development Budget versus Actual Release of Funds for the ASLM (Billion Tshs)

2006/07 2007/08 2008/09 2009/10 2010/11

Funds Released Funds Released Funds Released Funds Released Funds Released ASLM APPROV APPROV APPROV APPROV APPROV ED Amou Percent of ED Amou Percent of ED Amou Percent of ED Amou Percent of ED Amou Percent of nt Approved nt Approved nt Approved nt Approved nt Approved

45.9 8.3 18.08 60.06 29.9 49.78 17.52 42.4 242.01 92.2 1.81 1.963124 103.9 92.36 88.89 MAFC

9.91 1.8 18.16 29.42 9.9 33.65 20.37 9.8 48.11 7.83 9.86 125.93 24.75 24.75 100.00 MLDF

1.9 0.1 5.26 2.36 0 0.00 2.48 1.2 48.39 1.39 1.204 86.62 1.85 1.38 74.59 MTI

0 0 0.00 0 7.5 0.00 13.19 13.19 100.00 13.1 7.61 58.09 16.89 9.13 54.06 IRRIGAT ION

21.8 4.3 19.72 0.49 0.49 100.00 5.15 5.15 100.00 0.03 0.05 166.67 0.61 0.58 95.08 PMO- RALG 20.53 79.51 14.5 18.2367 92.33 47.79 51.76 58.71 58.55 99.72747 114.55 17.9258 148 128.2 86.62 4 TOTAL

Figure 8.13: Performance of the Development Budget for the ASLM

75 8.4 Five-year Assessment of the Trend of the Sector’s Share of the Budget

To a large extent growth of approved and actual expenditure on the agricultural sector depends on the growth of the national budget and changing priorities following implementation of outstanding national strategies and interventions. As such, assessing the trend of the share of the agricultural sector in the national budget also requires a look on the growth rate of the latter. This assessment is presented in Table 8.4 and Figure 8.6. First we observe in the figure that the national budget has been growing at an annual rate higher than 15% since 2006/07. The highest growth rate (42%) was recorded in 2009/10; and thereafter slowed down to 25% in 2010/11.

Correspondingly, the share of the agricultural sector in the national budget has been increasing from the lowest of 4% in 2006/07 to 7.8% in 2010/11. On average, the growth rate of the sector’s financing has been 6.1% (Table 8.4). Clearly, the growth of the share of the agricultural sector in the national budget has been lower than the corresponding growth in the national budget. Further to this finding is the analysis provided in Table 10.4, which shows sectoral composition of the national budget in the past five years. The sectors with the lion shares of the budget in order of the magnitude of the share are Education, Infrastructure, Health and Agriculture. Thus, the agricultural sector comes fourth in the list of national budget priorities.

Although the agricultural sector comes fourth in the national budget priorities, it is observed that the sectors that have higher shares than agriculture have a direct impact on the performance of the sector. Availability of health services, for example, is important for farmers to ensure good health and quick recovery in the event of illness. Also, making such services available to the nearest distance reduces travelling time and makes available more time for farm work. On the other hand, good and reliable infrastructural networks such as roads and railway systems are crucial for the growth of the agricultural sector particularly distribution of farm inputs and market channels. Thus, we cannot conclusively argue for allocation of more funds to the agricultural sector at the expense of the complementing sectors such as infrastructure, health and education. In fact in the previous chapters of these report a number of challenges were identified and part of them fall in other sectors such as infrastructure. The complementarity of other sectors to agriculture is actually the message behind the KILIMO KWANZA national resolve.

76 Table 8.11: Five-year Assessment of the Composition of the Sector’s Share of total Budget 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 Average (2005/06-2010/11) Education 16.6 18.4 17.9 19.7 18.3 17.6 18.1 Health 9.1 8.8 9.7 11.1 8.4 10.2 9.5 Water 4.0 3.9 5.1 3.2 3.6 3.4 3.9 Agriculture 4.2 4.0 6.2 7.1 7.0 7.8 6.1 Lands 0.3 0.4 0.4 0.4 0.4 0.5 0.4 Infrastructures 9.3 10.3 12.8 13.4 11.5 13.0 11.7 Judiciary 1.3 1.5 1.2 1.1 1.1 1.2 1.2 HIV/AIDS 3.0 2.4 1.8 1.5 1.7 0.2 1.8 Others 52.3 50.3 44.9 42.6 48.0 46.2 47.4 Total 100 100 100 100 100 100 100

Source: Ministry of Finance and Economic Affairs

Figure 8.14: Comparing Growth of the National Budget with Allocations to the Agricultural Sector

77 8.5 Comparison of budgeted versus actual expenditure for the major budget items of MAFC

In the year 2010/11 the MAFC received TZS 179,761,149,378 out of the approved budget of TZS 217,522,882,971. This represented 82.09% of the budget of the ministry for the financial year or a funding gap of about 18%. The major budget and spending items are enlisted in Table 8.5. It is observed from the analysis in the table that the funding gap affected some of the activities cum items of the budget marginally on a different scale.

First, three major items in the budget have their share in the actual expenditure exactly equal to that reflected in the approved budget. They thus suffered from less spending proportionally to the MAFC funding gap. These are Agricultural Inputs Trust Fund, External Subventions, and Training for Extension. Second, there are three items in the budget whose expenditures are proportionally less than the general MAFC funding gap. These are Fertilizer subsidy, Agricultural Chemicals, Certified Seed Subsidy and OC. Thirdly; again three items had their actual expenditure proportionally bigger than adjusted expenditures shares following the funding gap. These are internal subventions (Crop Boards and Institutions), Strategic Grain Reserve, and Control of Pests/Disease Outbreak.

However, the deviations are very marginal and might be reflecting the completeness of funding for specified prices rather than reallocation per se. Thus, we cannot observe major deviations that change the spending priorities as determined by the approved budget for the ministry.

78 Table 8.12: Comparison of budgeted versus actual expenditure for the major budget items of MAFC 2010/11 Description JULY-JUNE % Share of % Deviation Released Actual of Actual As % of Funds as a Total Approved Expenditure Expenditure Approved Released Amount Actual Expenditure % of Budget from total from Budget Approved Funds Approved Budget Released Budget Other Charges (OC) 14,444,294,250 7 7,506,423,065 6,734,009,657 4 52 -3 Proper Subtotal OC 14,444,294,250 7 7,506,423,065 6,734,009,657 4 52 -3 Proper Ring fenced OC Fertilizer subsidy 74,474,020,300 34 53,558,313,305 53,342,919,880 30 71.9 -4 Agricultural chemicals and 7,841,057,400 4 3,978,226,800 3,978,197,800 2 50.7 -1 certified seeds subsidy Agricultural Input 4,401,845,000 2 3,063,150,810 3,063,150,810 2 69.6 0 Trust Fund External 1,335,829,500 1 1,220,001,524 1,210,485,621 1 91.3 0 subventions Internal subventions (Crop 16,728,078,900 8 14,672,638,716.43 14,672,638,716.43 8.22 87.7 0.53 boards & institutions) Strategic Grain 75,626,972,650 35 74,567,217,250.00 74,383,039,090.00 41.65 98.6 6.89 Reserve Control of Pests/Diseases 2,696,793,000 1 2,534,891,833.34 2,529,752,820.00 1.42 94 0.18 outbreaks Training for 2,820,583,000 1 1,506,877,103 1,506,877,103 1 53.4 0 extension Subtotal (ring 185,925,179,750 85 155,101,317,342 154,687,061,840 87 83.4 1 fenced OC) TOTAL OC 200,369,474,000 92 162,607,740,407 161,421,071,497 90 81.2 2 PE 17,153,408,971 8 17,153,408,971 17,153,408,971 10 100 2 TOTAL Recurrent 217,522,882,971 100 179,761,149,378 178,574,480,468 100 82.09 -18 Source: MAFC Fourth Quarter Progress Report

79 8.6 Does the Increasing Spending on the Agricultural Sector Translate into Increased Performance of the Sector?

Generally over the last three years, the agricultural sector public spending has more than doubled both in nominal and real terms. The issue then is whether the resulting performance of the sector corresponds to the increasing public spending on the sector.

Figure 8.7 compares growth of the public spending on the agricultural sector and that of the agricultural GDP. First it is observed that consistently, budget growth for the sector is higher than growth in the sector’s contribution to GDP. On average, between 2007 and 2010, the agricultural sector budget grew by 64.9%; but the sector’s output grew by 13.3% (current prices) on average. Thus, the growth of output in the sector is just less than a quarter of the growth of the spending on the sector. These results, however, are for a period of three years – up to 2010 and may not reflect some of the long term impacts of the recent spending on the sector. Notwithstanding, the elasticity of output with respect to public spending on the sector is rather small, largely because productivity is still low in the sector.

Is the Agricultural Sector Getting a Fair Budget Allocation Relative to its Contribution to GDP?

The agricultural budget has been increasing as observed earlier on. Likewise, agricultural GDP has been increasing although at a relatively lower rate than the budget. Further results in Table 8.6 indicate that although the contribution of the agricultural sector to GDP has been increasing, the budget allocation to the sector has been rather too small. It has never reached five percent of the value of its GDP for the last five years.

80 Table 8.6: Comparing the Trend in Agricultural GDP versus Budget Allocations

Financial Year 2006/07 2007/08 2008/09 2009/2010 2010/2011

Agricultural Sector GDP in 4,881.714 5,683.9025 6,444.3075 7,089.825 TZS Billions

Agricultural Sector Budget 81.9 188.26 227.85 327.48 396.99 in TZS Billions

Agricultural Sector Budget 1.68 3.31 3.54 4.62 as a percentage of Agricultural GDP

Definitely, public spending on the agricultural sector is too small compared to its GDP contribution; this is a concern though there are also considerable investments from the private sector. Conclusively then, the agricultural sector is not yet getting a fair share in terms of public spending on the sector visa vis the sector’s contribution to GDP; though of course the issue of productivity is still at issue.

8.6 Assessment of Value for Money for DADPs Projects

The District Agricultural Development Plans were established in 2006/07 with the objective of enhancing agricultural investment at the community level. This involves community mobilization to come up with viable agribusiness projects for improving livelihoods. The procedures and modalities of DADPs implementation are contained in the DADPs implementation manual issued by the ASLMs. .

By the end of the financial year 2010/11, the total DADPs budget had increased from TZS 14 billion in 2006/07 to 86.7 billion, i.e. an increase by more than five times (Figure 8.8). Obviously, there are many community agribusiness projects that have been financed through the DADPs funds. Of crucial concern in the public expenditure review this year is whether the DADPs have value for money.

Figure 8.8: Trend of Expenditure on DADPS (TZS) DADPS 100,000,000,000 90,000,000,000 80,000,000,000 70,000,000,000 60,000,000,000 50,000,000,000 40,000,000,000 DADPS 30,000,000,000 20,000,000,000 10,000,000,000 - 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12

81 Selectively, the 2010/11 assessment of value for money in DADPs was carried out in ten case study councils- two from each agricultural zone, namely: Bukoba Rural, Lindi Urban, Moshi Rural, Bahi, Kigoma, Mvomero, Mufindi, Mbarali, Kiteto and Temeke. In each of the selected council, two DADPs projects were identified by the study team to visit and make physical assessment of the structures constructed and benefits in terms of value for money. The assessment focused on costs incurred versus the work done to accomplish the projects and the benefits realized so far. Where applicable, cost per unit was computed and comparisons made across projects. The summary of the results of the assessment is presented in two separate tables – one for the assessment of the physical structures, and the second for the benefits realized so far (Tables 8.7 & 8.8).

8.6.1 Do the DADPs Constructed Structures have Value for Money?

First, it is observed from the analysis that there are several types of projects in which DADPs are involved. They include irrigation, construction of market sheds and cattle dipping facilities, residential houses for extension officers, etc. The projects vary by size to include small, medium and large scale projects.

Second, it is observed that not all projects had been completed by the time of the visit and assessment. But even though, there are general indications that the DADPs projects are well implemented in terms of management, supervision and costs. Of course extreme cases on the weak side might be there if we consider dealing with more than 130 councils and many DADPs projects therein. Thus, confining our analysis in the few councils and DADPs projects we visited, physical and general observations of project by project in Table 8.7 conclude that there is value for money as far as investment structures built from DADPs funds are concerned. The benefits accruing from the projects however are a subject matter of further analysis in Table 8.8.

DADPs funds have led to establishment of many community projects in the selected study councils. Of the 23 projects assessed, 18 or 78% had been satisfactorily implemented with physically observable value for money; 5 projects or 22% were not satisfactory. Thus, many of the projects assessed had value for money as far as the physical structures are concerned. But more important as we discuss next is whether there are realizable benefits from DADPs investments.

82 Table 8.7: Cost Assessment of DADPs Projects in Selected Councils

UNITY Total NAME OF DADPs VALUE OF MEASURE OF COST PER LGA TYPE OF PROJECT Length/are Remarks FUNDED PROJECT PROJECT CONSTRUCTI UNIT (TZS) a in Meters ON 98% completed (small work on toilet remaining but at final 1 cattle stage). The work is Cattle dipping (including dipping satisfactory as per Kagondo VIP toilet) 28,000,000 N.A facility 28,000,000 money provided Bukoba 80% completed and DC Market shed (including the work is Kyansozi offices) 41,000,000 N.A N.A 41,000,000 satisfactory Ward Agricultural Resource Centre Completed by 100%. (including 11 pieces of The work is shambadarasa for satisfactory Kyema improved banana) 23,000,000 N.A N.A 23,000,000 Completed by 100%. The work is Mkungwe bridge Bridge Construction 70,000,000 16 M 4,375,000 satisfactory Completed by 100%. Kigoma The work is not very DC satisfactory, poorly Matendo Market shed 40,600,000 192 M2 211,458 designed Completed by 100%. The work is Ilagala Market shed 40,000,000 192 M2 208,333 satisfactory Completed by 100%. The work is Lindi DC Hingawale market Market shed 30,500,000 N.A N.A 30,500,000 satisfactory Kinyope Irrigation Phase one completed scheme Irrigation 81,000,000 8748 M 9,259 satisfactorily Completed and Orosise furrow Irrigation 30,000,000 300 M 100,000 satisfactory Soko irrigation Completed and Moshi scheme Irrigation 36,834,400 2,000 M 18,417 satisfactory Completed and Mbono furrow Irrigation 25,000,000 200 M 125,000 satisfactory Bahi DC 70% completed, Lamaiti grape progress is not very (Zabibu) Construction of well for 258,667 satisfactory due to Plantation irrigation 19,400,000 75 M inadequate of funds Lamaiti grape Land clearance and 40,600,000 113 Acres 413,389 57% percent (Zabibu) related activities completed, progress Plantation not very satisfactory 83 UNITY Total NAME OF DADPs VALUE OF MEASURE OF COST PER LGA TYPE OF PROJECT Length/are Remarks FUNDED PROJECT PROJECT CONSTRUCTI UNIT (TZS) a in Meters ON due to inadequate of funds 9,500,000 Procured and Procurement of power (including 2 power operational - reflects Nzogole tillers repairs) 2 tillers 4,750,000 price. Satisfactory 17,000,000 70% completed and (the total the work is Extension Officer project value is satisfactory Nzogole residential house 25,000,000) 25,000,000 The project is Municipal Veterinary Centre complete and Veterinary Centre (Building and Equipment) 28,000,000 N/A N/A satisfactory Completed and Saadan Cattle market 61,000,000 N/A N/A 61,000,000 satisfactory The money was spent for renovating the Igomaa Igomaa Irrigation scheme 40,000,000 N/A N/A 40,000,000 canal. Satisfactory Mufindi 90% completed, the Sunflower Milling machine progress is Igomaa (Plus the structure) 16,000,000 N/A N/A 16,000,000 satisfactory Extension Officer Completed and reflects Igomaa residential house 19,000,000 N/A N/A 19,000,000 the cost 436,000,000 50% completed, intake progress 200,000,000 satisfactory and Ikweha Ikweha Irrigation Scheme canal 3,500 N/A 57,143 reflects cost Construction of charcoal Completed and WamiSokoine dam 35,000,000 N/A N/A 35,000,000 satisfactory Mvomero Renovation is about UWAWAKUDA irrigation 70% complete. Dakawa scheme (renovation) 200,000,000 N/A N/A 200,000,000 Satisfactory

84 8.6.2 Are there any Realizable Benefits from DADPs Investments?

Yes, there are realizable benefits from the DADPs funds according to the analysis and findings presented in Table 8.8. Of the 24 DADPs projects visited and assessed, 23 had started to generate benefits to the respective communities. The benefits include the following.

 Cattle disease control enhanced and thus reducing cattle mortality rate

DADPs projects have improved cattle deeping facilities and veterinary services which in turn have improved control of disease outbreak. As a result mortality rate for cattle has decreased.

 Increased access to extension services

Construction of residential houses for extension officers has moved the services close to communities. This has enhanced easy access to those services with potential impact of improving productivity in the agricultural sector.

 Human lives have been served by eliminating risks from wild crocodiles

Construction of modern bridges in rivers where human lives are at risk due to presence of wild crocodiles has not only served lives but also made farming activities more regular. People can cross over to the other side of the river where their farms are located and comeback safely.

 Improved market facilities, hygiene and incomes

Construction of market sheds has improved market services, hygiene and incomes. Communities have more organized and reliable markets in all weather conditions for selling their produce and getting their purchases.

 Increased Production and Productivity in the agricultural sector

With the onset of DADPs more land is irrigated because of reliable sources of water from the irrigation schemes constructed from the funds. Mean while productivity has increased. For example, in Mvomero district, construction of a charcoal dam in Wami Sokoine has increased milk production from two liters per cattle to 6 for local breeds, and six liters to 10 for hybrids.

 Increased access to water services

Water services to communities have increased because of the various DADPs projects.

Thus, DADPs investments have realizable benefits to communities. Though for some of the projects it is too early to assess, the impact is already on the ground in various forms. Since the projects are designed and implemented by communities themselves they stand to benefit them.

85 Table 8.8: Assessment of Realizable Benefits from DADPs NOTED IMPACT PHYSICAL Emerging NAME OF PADP TOTAL DISTRICT TYPE OF PROJECT STATUS COUNT Value for Realizable Benefits PROJECT INVESTMENT S/N (units in money place) 1 cattle dip There is an increase in Cattle dipping (including serving 1973 From 884 to number of cattle and a Kagondo 28,000,000 98% Complete VIP toilets) herds of 1973 reduction in the mortality 1 BUKOBA DC cattle rate of cattle Not yet in use due to lack of Market shed (including Kyansozi 41,000,000 80% Complete important facilities like offices) toilets The number of farmers Ward Agriculture receiving extension services 258 farmers Resource Centre have increased due to 100% receiving From 30 to Kyema (including 11 pieces of 23,000,000 groups formation and the Complete extension 258 shambadarasa improved use of Ward Agricultural services banana) Resource centre in the catchment

People were 2 KIGOMA DC being killed 100% by crocodiles. Mkungwe Bridge Bridge construction 70,000,000 Human lives served Complete Such deaths have been eliminated People have started using the market and hygiene 100% Improvement in hygiene and Matendo Market Shed 40,600,000 has improved. Complete incomes The village has gained income from tax. Ilagala Market shed 40,000,000 100% People have Improvement in hygiene and Complete started using incomes the market and hygiene has improved.

85 The village has gained income from tax.

It has 3 LINDI DC attracted traders to construct shops all around the market and Improvement in trading Hingawale Market Market Shed 30,500,000 the environment and incomes community is intent on using the market and improving its services One irrigation 8-9bags/ha to Kinyope Irrigation Irrigation 81,000,000 scheme is in 17-18 Productivity has increased scheme place bags/ha

Farms have 4 MOSHI 100% increased Orosise furrow Irrigation 30,000,000 Cultivation has increased Complete from 79Ha to 118Ha Production has increased Soko irrigation 100% Irrigation 36,834,400 from 3 Productivity has increased scheme Complete Tones/ha to4Tonnes/ha Farm have 100% increased Mboni furrow Irrigation 25,000,000 Cultivation has increased Complete from 68 Ha to 108 Ha

170ha are to be planted. Lamaiti grape Construction of well for 70% 5 BAHI DC 19,400,000 Canals in Cultivation has increased plantation irrigation Completed 30ha so far are in place. Lamaiti grape Land clearance and 57% 40,600,000 On progress Not completed plantation related activities Completed Nzogole Procurement of power 9,500,000 Procured The farms Cultivation has increased 86 have increased tillers from 5 to 10 ha per group. More reliable Extension officer 70% Increased access to Nzogole 25,000,000 extension residential house Completed extension services services.

Veterinary centre Municipal VET 100% (Building and 28,000,000 Improved veterinary services centre Complete. 6 MUFINDI DC equipments) It has been easy to sell Increased control of diseases 100% The market is the cattle’s Saadan Cattle market 61,000,000 Increased access to cattle Complete complete and control market for diseases outbreaks. The Igomaa irrigation 100% renovation Igomaa 40,000,000 Cultivation has increased scheme Complete has increased irrigated area. Sunflower milling Still under Under Igomaa 16,000,000 90% Complete Under Construction machine construction Construction More people Extension officer 100% One house is have access Increased access to Igomaa 19,000,000 residential house Complete in place to ext extension services services 436,000,000 It is expected Ikweha irrigation (Intake) Under Ikweha 50% Complete to serve Under Construction scheme 200,000,000 Construction 2,670 people (Canal)

7 Mvomero Wami sokoine Construction of charcoal 35,000,000 100% The charcoal Society has Increased access to water dam Complete dam reliable services drinking water. Increased milk production Formerly they had to walk up to 10 km for water. Milk production has increased from 2 liters to 6 for local

87 breeds and from 4lts to 10lts for hybrids.

UWAWAKUDA irrigation 100% The irrigation Production scheme Complete scheme is has increased Dakawa 200,000,000 Productivity has increased operational from 6-12 bags/ha “Ndigana Kali “ which used to contribute Cattle dip Wami sokoine cattle dip Completed 40% of cattle Reduced cattle mortality death has been reduced to 10%

88 8.6.3 Weaknesses and Suggestions for further improvement of DADPs

Despite the findings that DADPs involve value for money, yet there are a number of issues to consider as we look ahead to improve those interventions. First is to ensure that priority expenditures of DADPS can continue to focus on the current three areas for the next financial year, as it is too early to change it. By design, DADPs expenditures are suitably structured. The problem however is the capacity at the council level on one side and at the community level on the other side, as we explain next.

During the visits to the councils it was observed that not all communities have organized farming activities that can trigger viable proposals for funding from DADPs. Also, not all councils are adequately capable and/or efficient in preparing regular and suitable reports/proposals for the competitive funds of DADPs – including financial integrity and audit reports that will not penalize potential beneficiaries. Hence, further effective sub interventions may be required to make more communities come up viable and fundable projects to enhance equity. Thus a support mechanism for enhancing eligibility at the community and council level could be put in place to alleviate the problem – e.g. the use of CBOs/NGOs/PSOs, etc. The District Agricultural Capacity Building Grant –ACBG – could be modified to take care of this deficiency.

The measures would be in addition to instituting disciplinary measures that penalize the council rather than DADPs beneficiaries. Failure to prepare and submit clear audit reports for DADPs can be associated with delayed OC rather than delayed or none release of DADPs funds.

Also, as we go down the road to implement DADPs, there is a need of setting a simple tool of assessment of the DADPs projects once or before funded to determine commercial viability – this has to be done properly before and after implementation to avoid unnecessarily big/under-used structures. This assessment could also include a simple tool of analyzing/recording the benefits accrued by the respective communities – kind of own impact assessment at the community and council level.

8.7 Emerging Recommendations

8.7.1 There is need to improve the general budget performance by aligning the actual resource envelop to the expected actual expenditure. This requires improvement in public sector revenue projections and collections. The recurrent budget has been performing better than the development budget. The latter’s performance depends on item of expenditure and purely availability of funds by design. Thus, a better forecasting of revenue at the national level will minimize funding gaps. 8.7.2 The DADPs funds have shown value for money. Thus, continue to focus on the current three areas for the DADPs in the medium term as it is too early to change it. By design, DADPs expenditures are suitably structured. 8.7.3 Although by design DADPs projects have capacity building facility, yet eligibility is too limited to knowledgeable and well organized beneficiaries leaving little chance to their counterparts. The intended capacity building has not been effective as desired. Thus a support mechanism for enhancing

85 eligibility at the community and council level, a designated mechanism could be put in place to alleviate the problem – e.g. the use of CBOs/NGOs/PSOs, etc. to enhance the capacity on the disadvantaged communities. The District Agricultural Capacity Building Grant –ACBG – could be modified to take care of this weakness. 8.7.4 Failure of Councils to submit reports to qualify for further DADPs support should be associated with disciplinary measures that penalize the council rather than DADPs beneficiaries. Failure to prepare and submit clear audit reports for DADPs could be penalized by delayed OC rather than delayed or none release of DADPs funds. 8.7.5 To avoid unnecessaryly big/under-used structures at the community level, there is a need of setting a simple tool of assessment/review tool of the DADPs projects once they are funded to determine commercial viability and realization of the envisaged benefits over time by the communities themselves. This assessment could also include a simple tool of analyzing/recording the benefits accrued by the respective communities – kind of own impact assessment at the community and council level. This would improve utilization of the facilities and increase value for money in their operations over time.

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30. United Republic of Tanzania: Ministry of Livestock and Fisheries; Budget Book 2007/08-2010/11;Statements for Financial Years 2007/08- 2010/11

31. United Republic of Tanzania: Ministry of Industries, Trade and Marketing; Budget Book 2007/08-2010/11;Statements for Financial Years 2007/08-2010/11

32. United Republic of Tanzania: Prime Minister Office and Regional Administration and Local Government; Budget Book 2007/08- 2010/11;Statements for Financial Years 2007/08-2010/11

88 33. United Republic of Tanzania:Ministry of Agriculture Food Security and Cooperatives: Agriculture Sector Review and Public Expenditure Review. Final report. for financial years 2007/08-2010/11

34. United Republic of Tanzania, Ministry of Agriculture Food Security and Cooperatives; District Agriculture Sector Investment Programme (DASIP) Annual Reports 2006/07-2010/11.

35. United Republic of Tanzania, Ministry of Agriculture Food Security and Cooperatives; MAFC Minister’s Budget Speech, 2011/12.

36. United Republic of Tanzania:Ministry of Agriculture Food Security and Cooperatives; Budget Book 2007/08-2010/11; Statements for Financial Years 2007/08-2010/11

37. United Republic of Tanzania, Ministry of Agriculture Food Security and Cooperatives: Evaluation of the Performance and Achievements of the ASDP; Final Draft; Dar es Salaam, June 2011.

38. United Republic of Tanzania, Ministry of Agriculture Food Security and Cooperatives; Follow up of the Implementation of the World Food Summit Plan of Action, 2006.

39. United Republic of Tanzania, Ministry of Industry, Trade and Marketing: Agricultural Marketing Policy, Dar es Salaam, December 2008

40. United Republic of Tanzania, Ministry of Industries, Trade and Marketing; Budget Book 2007/08-2010/11;Statements for Financial Years 2007/08-2010/11

41. United Republic of Tanzania, Ministry of Labour, Employment and Youth Development; National Employment Policy, 2008.

42. United Republic of Tanzania, Ministry of Livestock and Fisheries; Budget Book 2007/08-2010/11 & Statements for Financial Years 2007/08- 2010/11

43. United Republic of Tanzania, Ministry of Livestock and Fisheries; Livestock Sector Development Strategy, Dar es Salaam, October 2001.

44. United Republic of Tanzania: Ministry of Livestock and Fisheries: National Fisheries Sector Development Policy and Strategy: Dares Salaam; October 2007.

45. United Republic of Tanzania, Ministry of Livestock and Fisheries; National Fisheries Sector Development Programme, Dares Salaam, May 2011.

46. United Republic of Tanzania; National Employment Policy, 1997.

47. United Republic of Tanzania, Planning Commission; Tanzania Development Vision 2025; Dar es Salaam, 1998.

89 48. United Republic of Tanzania, Planning Commission: The First Five Year Development Plan 2011/12-2015/2016: Dar es Salaam, June 2011.

49. United Republic of Tanzania, Prime Minister Office and Regional Administration and Local Government; Budget Book 2007/08- 2010/11;Statements for Financial Years 2007/08-2010/11

50. United Republic of Tanzania; Registration and Traceability Act, 2010 (Act No. 12/10), Dar es Salaam, 2010.

51. United Republic of Tanzania & Tanzania National Business Council; Kilimo Kwanza. Dar es Salaam, June 2009

52. United Republic of Tanzania, Vice President’s Office: Mkukuta, 25th July 2005.

53. USAID Administrator: Feed the Future; Press Release, Washington D.C;24th April 2010

54. World Bank; Malawi Country Economic Memorandum, World Bank 2009.

55. World Bank: African Development Indicators (ADI) 2011,Washington DC.

56. WFP; World Food Programme Report , 2007.

57. Zorya, Sergiy and Shireen Mahdi, “High Marketing Costs and Inefficient Policies in Tanzania’s Maize Market: A Poverty Perspective.” World Bank, 2009.

58. Wikipedia Encyclopaedia: Subsistence Agriculture

90 Annex 1: List of People Consulted at National Level

S/No MINISTRY/ NAME POSITION INSTITUTION 1 MAFC David M. Biswalo Assistant Director –Planning and Budget Eng. Rajab Mtunze Assistant Director - Agroprocessing and Renewable Energy Sharifa M. Luhinde Senior Economist Bai Omary Economist Mohamed Chikawe Economist Ernest L. Mwakibasa Godfrey T. Mjatta Agricultural Tutor Dr. Fidelis A. Myaka Director of Research and Development Beatus Malema Assistant Director – Crop Promotion Ombaeli O. Lemweli Ass. Director - CMEW Oswald Ruboha Assistant Director – Monitoring & Evaluation and Statistics J. D. Maige Principal Economist E. C. Kizwalo Principal Economist M. Ndaba Principal Economist Theresia P. Msaki Assistant Director- Policy Fikiri Katiko Economist S. W. Mtemi Assistant Director - (Land Master Planning)

2 MIT Mbufu Kassim MIT Representative Onesmo Mbele MIT Representative Eline Sikazwe MIT Representative Exaud S. Kigahe MIT Representative

3 MLDF Catherine Joseph Director of Policy and Planning Mbaraka Stambuli Economist B. M. Rwongezibwa MLDF Representative Mleche WCH MLDF Representative Peter Njau MLDF Representative

5 TPSF Louis P. Accaro TPSF Representative

6 TIC Brendan Maro TIC Representative Lilian Mwandanga TIC Representative

7 Irish Aid Sizya Lugeye Irish Aid Representative

8 IFAD Mwatima A. Juma IFAD Representative

9 JICA – RADAG Machio Watanaba JICA – RADAG Representative

10 ANSAF/Oxfam Justin Morgan ANSAF/Oxfam Representative

91 S/No MINISTRY/ NAME POSITION INSTITUTION 11 MVVI/SIOO Haika Shayo MVVI/SIOO Representative 12 ACT Said S. Said ACT Representative 13 WFP Juvenal Kisanga WFP Representative 14 DFID Gulian Rogers DFID Representative 15 PMO- RALG Doreen Kisamo PMO- RALG Representative 16 FAO Betty Mlingi FAO Representative 17 USAID Thomas Hobgood USAID Representative 18 EU Ana Mariguesa EU Delegation Gianluca Azzoni EU Delegation 19 WB Zainab Semgalawe WB Representative David Rourbach WB Representative

92 Annex 2: List of people Consulted at District Level

S/No DISTRICT NAME DESIGNATION 1 MUFINDI Ms E. Kaduma DALDO Mr John Mfumbi Irrigation officer Mr. Amin Sheghembe Livestock/Marketing Mr. Francis S. Maghembe Crops Ms. Zitha Senye Cooperatives Ms. Suma Mwailafu Planning Mr. Robert Project accountant Mr.Mang’enya Business council chairman

2 MVOMERO Mr. G. Mhina DALDO Mr. Hozeniel Foya Crops Mr. Mihayo Lukaya Agriculture inputs Mr. K. Stima DT Ms. E Majagi DPLO Mr. Msilikare Dionysius Accountant Mr. Edward Huzuni Livestock Mr. Emmanuel Shabale Beneficiary (Livestock) Mr. Kinyawike S. Kinyawike VEO Mr. Japhet Migabo Farmer

3 LINDI Hmisi Alawi Mashauri DALDO Lindi Munira Mohamed Asst DPLO Lindi Hamisi Dume Dume VEO Hingalawe Hassan Nassoro Buriani Rice Farmer Kinyope Lindi Salum Abdala Nkwango Rice Farmer Kinyope Lindi Hassan Athuman Munga Rice Farmer Kinyope Lindi Bakari Kazumari Mchenko Rice Farmer Kinyope Lindi

4 KIGOMA Alex Butoto DALDO Kigoma Kimwanga Sizya Irrigation Engineer Kigoma Susan Mumba Plant Protection officer Peter Wambura District Treasurer Kigoma

5 MOSHI Charles J. Lyimo Ag. DALDO Micarda A. Kessy DAEO Emmanuel G. Ngoiya DMSS Inputs Amerta Bureta Ag. DCO

6 BUKOBA E. Serenkuma Ag. DPLO Kisanga Makigo DALDO Joranda Ishengoma DTC

7 BAHI Adam Lau Agro engineer Nicholous Lupindu PATECH1 Ms. Swai Ag. DALDO Sylvester Kashaga DALDO

8 KITETO Msuya DALDO/KITETO DC AshaMaganga Manager/ Kaloleni AMCOS

93 S/No DISTRICT NAME DESIGNATION LTD,Kiteto Bakari M.Midilah Ast Manager Benn Kinyunyu Chairman/ Enguserosidan charcoal PeninaMaliyamoto Committee Member/ Enguserosidan charcoal AmmessiaM.Mgaya Secretary/ Enguserosidan charcoal

9 MBARALI DALDO/ Mbarali DC Dickson Maruchu Agricultural Officer/ Mbarali DC Angelo Mvimba Chairman/ Shirika la WakulimawaUmwagiliajiMaji,I tiro Wilson Mwasambamba Acting Ward Executive Officer/ Mturo EfeseLulandala Secretary/ Shirika la WakulimawaUmwagiliajiUturo

10 TEMEKE CosmasKimati DALDO Elde Kimaro Agricultural Officer(crops)

94 Annex 3: List of Agricultural Sector Frameworks

1. Tanzania Vision 2025 2. MKUKUTA 3. KILIMO KWANZA 4. Five Year Development Plan I 5. Rural Development Strategy 6. Agricultural Sector Development Strategy 7. Agricultural Sector Development 8. Agricultural Marketing policy 9. National livestock Policy 10.National Agro-Mechanisation Policy 11.National Irrigation Master Plan 12.National Irrigation Policy 13.National Irrigation Strategy 14.National Agricultural development policy 15.National land Use Planning and Management 16.The Cooperative Development policy 17.The Cooperative Reform and Modernisation Programme 18.East African Community Agricultural and Rural development Policy 19.The Maputo 2003 Declaration on Agriculture and Food Security 20.NEPAD’s Comprehensive African Agriculture Development Programme 21.Tanzania Agriculture and Food Security Investment programme 22.National Fisheries Development Plan 23.National Integrated Water Resources Management 24.Feed the Future Programme 25.East African Agricultural Productivity Programme 26.World Trade Organisation 27.SADC’s Regional Indicative Strategic Development Plan 28.Economic Partnerships and Negotiations 29.Rural Development Strategy 30.Agricultural Sector Development Strategy 31.Agricultural Sector Development 32.Agricultural Marketing policy 33.National livestock Policy,2006 34.The Livestock Sector Development Strategy(LSDS),2010 35.The Livestock Sector development Programme(LSDP), 2011 36.National Agro-Mechanisation [policy 37.National Irrigation Master Plan 38.National Irrigation Policy 39.National Irrigation Strategy 40.National Agricultural development policy 41.National land Use Planning and Management 42.The Cooperative Development policy 43.The Cooperative Reform and Modernisation Programme 44.East African Community Agricultural and Rural development Policy 45.The Maputo 2003 Declaration on Agriculture and Food Security 46.NEPAD’s Comprehensive African Agriculture Development Programme 47.Tanzania Agriculture and Food Security Investment programme 48.National Fisheries Development Plan 49.National Integrated Water Resources Management 50.Feed the Future Programme 51.East African Agricultural Productivity Programme 52.World Trade Organisation

95 53.SADC’s Regional Indicative Strategic Development Plan 54.Economic Partnerships and Negotiations

96

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