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World Bank Document CONFIDENTIAL Public Disclosure Authorized AF T30 MUM DEV71k)PMENT STUDY BACKGROUND PAPER SMALLHOLDER TOBACCO DEVELOPMENT IN TANZANIA: A REVIEW OF URAMBO AND TUMBI SCHEMES Public Disclosure Authorized by M. Agarwal and D. Linsenhmeyer Public Disclosure Authorized Series Studies in Employment and Caral Development No. 12 Division : Vmploynent and Rural Development Department: Development Fconomics Development Policy Staff International Bank for Reconstruction and Development The authors prepared this background paper in their capacity as consultants to the Bank. The views expressed represent those of the authors and not necessarily those of the Bank. This report may not be published nor may it be quoted as representing the views of the Bank and ist affiliated organizations. Public Disclosure Authorized Washington, D.C., September 1974 SMLLOLDER TOBACCO DEV,rELOPMENT IN TANZANIA: A RE§ OF URAMBO AND TWMBI SCHMES TABIZ OF CONTENTS Page No. PREFACE i-il SUM ARY 0 0 0 Q 0 0 0 0 0 0a 0 0 0 0 0 0 0(0 . 0. 0 0 0 I. INTRODUCTION a 0 0 0 0 0 b 0 0 0 0 a 0 0 0 0 0 0 0 a 1 II. HISTORY OF FLUE-CURED TOBACCO IN TANZANIA . .. 2 E*pansion of Flue-Cured Tobacco, 1939-71 . 2 III. DESCRIPTION OF THE TOBACCO INDUSTRY IN TANZANIA . .a .4 Timing of Events . 4 Husbendry Practices . .5..... Marketing Procedures . .0 * .Q a a 6 IV. THE UR-ABO AND TMRBI SETTLEMENT SCHE4ES: DIFFERENCES IN TOBACCO OUTPUT, PRICE, AND QUALITY a . 7 Uranbo Settlement Scheme .0 . 0 0 0 0 7 Tumbi Settlement Scheme . 0 0 0 Q a 0 00 .a . .a . 10 Tobacco Price Differences at Urambo and Tubi 0 . 0 . 23 V. DEVELOPMENT STRATEGIES IN TABORA REGION 0 . a 0 00 0 26 Administration 0a 0 0a ;0 0 0 26 Extension Services 0 0 0 0 0 0. 0 0 0 a 00 0 0 29 Choosing Tenants and Extending Credit . 32 Double Standard in Credit and Marketing at Urambo , . 33 a * 0 0 Labor Supply . D 0 0 0 0 a .* a a 0a . 37 Effect on Production of Other Crops . 0 . 0 0 0 0 0 37 Conclusions . 0 *0 6 0 a * 0 0 a *0 * * 0 0 0 a a a o VI. COSTS AND INCOMES AT URAMBO AND TUMBI . 41 VII. BENEFITS AND SECONDARY EFFECTS OF THE TWO SCHEMES .. Rural Development Aspects .. 0 0 .... 147 Points for Consideration in Future Rural Development Projects 0 o o o a ao o a 147 Political Environment . 0 0 0 0 a a0 e0 0 48 -2 . VIII. WORLD BANK TOBACCO PROJECT .4.8.T .o .. 1-3 APPENDIX . .Q Q. Q .a a V O G . O . - iii BIBLIOGRAPHY o .o .Q .G O P Q . List of Tables Page No. Table No. 1 Tanzania Tobacco Production, 1939-72 . 3 2 Smal]holder Tobacco Production on the Urambo Settlement Scheme, 1956-70 . .. 8 3 Smallholder Tobacco Production on the Tumbi 16 Settlement Scheme, 1956-70 . 4 Production and Prices of Tobacco by Grade at Urambo and Tumbi, 1963-6h . 25 5 Farmers Per Field Officer and Per Assistant Fieli Officer and Tobacco Yield Per Acre, 1965, 1968, 1970 30 6 Number of Holdings and Yield Per Acre for Different Types of Cultivation . .G . • 30 7 Net Incame Per Hour of Work from Various Crops in Urambo . ..... G G 31 8 Scale of Credit Assistance for Urambo Inputs, 1962-63 and 1972-73 - . a 36 9 Produce Marketed Through the Tpbora Regional Cooperative Union, 1965-70 (Thousand Lbs.) . 36 10 Registered Crop Production in Urambo, 1965, 1968-70 38 11 Increase in Acreage of Paddy and Maize in Urambo, 1966-69 G G - . .a G G G . & .G G . 38 12 Seasonal Labor Use on a Farm Growing Virginia Tobacco (Man-days per Acre) . " . • . 39 13 Cost of Productiob Inputs at Urambo and Tumbi, 1966 (Shs. per Acre) . .e . .2 -3- List of Tables (cont) 1i Economic Returns on Tobacco Holdings in Urambo and Tumbi (Shs. per farm) . - . 2 15 Fxpenditures of the Organizations Carrying out the Urambo and Tumbi Proiects, 1 96a-6 . 16 Yields of Virginia Tobacco Projects in Tanzania, 196b-65 . .8 88.8 0 68. 0 0 0 * 17 Cost of Expansion for An Increase of Five Hundred Farmers Cultivating a Total of Six Hundred Acres .. 5 List of Figures Figure No. Page No. 1 Volume and Value of Production of Cured Tobacco by Smallholders in the Urambo Settlement Scheme, 1956-70 . - 8 a 8 .8 0. 0 8 a 0 a 0 8 4 . .8 .* 9 2 Average Gross Returns per Acre of Tobacco in the Urambo Settlement Scheme, 1956-70 - . 10 3 Average Price Received per Pound of Tobacco by Farmers in the Urambo Settlement Scheme, 1956-70 . 11 & Number of Small Firmers and Acres of Tobacco Planted in the Urambo Settlement Scheme, 1956-70 . 12 5 Yieli per Acre of Cured Tobacco in the Urambo Settlement Scheme, 1956-70 . 8 8 8 8 13 6 Tobacco Acreage per Farmer in the Urambo Settlement Scheme, 1956-70. .814.8.8. .8. 1 7 Number of Small Farmers and Acres of Tobacco Planted in the Tumbi Settlement Scheme, 1956-70 o 8 a o 8. 17 8 Volume and Value of Production of Cured Tobacco by Smallholders in the Tumbi Settlement Scheme, 1956-70 . 8 8. 0 a 0 0 a 8. 08 8a . 8 8 8 . 8 18 9 Average Price Received per Pound of Tobacco by Farmers in the Tumbi Settlement Scheme, 1956-70 . 8 8 8 . 19 10 Average Gross Returns per Acre of Tobacco in the Tumbi Settlement Scheme, 1956-70 . .8 . 20 11 Tobacco Acreage per Farmer in the Tumbi Settlement Scheme, 1956-70 . 8 8 8 8 8 8 . 8 8 . 8 21 hI Iist of Figures (con't.) Yield per Acre of Curol Tobacc in the Tumbi Settlement 12 22 Scheme, 1956-70 - . 0 a 0 a. a 0. 0. Prices Received by Small Farmers 13 Average Tobacco 2) (<0.3 Acres Tobacco) at Urambo and Tumbi, 1956-70 AIV3 1h Soil Zones and Settlement Patterns List of Maps MapINo A-1 1 Flue-Cured Tobacco-Growing Areas . * 0 * * 2 Location of Tobacco Settlements (BAT Tanzania, Ltd.). A-2 . ...... I PREFACE This report s prepared as a background paper for the Africa. Rural Development Study (ARDS) conducted by the Development Economics Department of the World Bank. The ARDS was prompted by the very substan- tial interest in the East and West Africa Regional Offices of the Bank in finding ways of designing rural development projects which, despite the limited financial and manpower resources available for rural development in Africa, will effectively "reach" large tumbers of low income rural people. Thirteen rural development projects and programs from sub-Saharan Africa, representing diversity in location, design and implementation, were selected for analysis (see attached list). The reviews raised a consistent set of questions regarding design, implementation and performance of these projects and programs to provide the basis for a comparative evaluation. The main report on the Africa Rural Development Study by Uma Lele summarizes the lessons that can be learned from these project reviews. 2. Each of the background papers is based on existing information, supplemented by field investigations. With rare exceptions, no additional quantitative data were collected. Because the availability of data varied widely between projects, there are substantial differences in the scope of the individual project reviews. 3. Since most of the data were collected by other agencies, the IBRD can not attest to the accuracy of the statistical information which appears in this report. The views expressed in this report are those of the author(s) and do not necessarily represent the views of the IBRD. -ii - BACKGROUIND PAPFRS ON PROJECTS RIEVIEWED IN AFIRIC RURAL DEVELOPMENT STUDY French Technical Assistance in Cameroon: A Review of the Zones d'Action Prioritaires Integrees (ZAPI) and the Societe du Developpement du Nkam (SODENKAM), by G. Belloncle and D. Gentil. Studies in Employment and Rural Development No. 2. Rural Development Programs in Ethiopia: A Review of the Chilalo Agricultural Development Unit, The Wolamo Agricultural Development Unit ani The Minimum Package Program, by T. Tecle. Studies in Employment and Rural Development No. 3. Range Development in Kenya: A Review of Commercial, Company, Individual and Group Ranches, by H. Ruthenberg, H. ThiMM9 and H. Jhanke. Studies in Employment and Rural Development No. 4. Small Farmer Credit in Kenya: A Review of Major Credit Schemes, by J. D. von Pischke. Studies in Employment and Rural Development No. 5. Smallholder Tea Project in Kenya: A Review of Kenya Tea Development Authority, by D. Sullivan. Studies in Employment and Rural Development No. 6. Rural Development in Kenya: A Review of Special Rural Development Progran, by N. Bedi. Studies in Employment and Rural Development No. 7. Land Settlement in Kenya: A Review of the Squatter.Problem, by P. mbithi and C. Barnes. Studies in Employment and Rural Development No. 8. Rural Development in Malawi: A Review of the Lilongwe Land Development Program, by B. H. Kinsey. Studies in Employment and Rural Development No. 9. French Technical Assistance in Mali: A Review of Groundnut Operation and Cotton Scheme, By G. Anderson. Studies in Employment and Rural Development No. 10. Small Scale Rural Industries in Nigeria: A Review of Industrial Developm,7nt Centers, by D. Turner. Studies in Employment and Rural-Development No. 11. Smallholder Tobacco Development in Tanzania: A Review of Urambo and Tumbi Schemes, by M. Agarwal and D. Linsenmeyer. Studies in Employment and Rural Development No. 12. Cotton Development in Tanzania: A Review of Cotton Program in Sukumaland, by M.
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