Promoting Sustainable Rural Transformation – Tanzania

The overall objective of this study was to identify ways to increase smallholder productivity and improve post-production value (storage, processing, and domestic or foreign market access) in order to improve the incomes and food security of smallholders, and to increase agriculture’s contribution to an overall agricultural transformation that reduces poverty in Tanzania.

This was done by looking at the value chains of rice, cotton, cassava, and dairy from the point of view of: (a) increasing productivity on-farm, and (b) increasing value addition along the product value chain (both on-farm and off-farm).

Agricultural transformation is defined here as growth with depth; that is, growth with diversification of the sector, export competitiveness, substantially higher productivity (especially at the farm level), upgraded technology, and noticeably improved household well-being, particularly through higher income levels. A look at Tanzanias’, macroeconomic data reveals that it is far from having a transformed agricultural sector despite the recorded growth. Agricultural productivity is low across all products, and for some products, such as milk and cassava, value chain activities beyond primary production are very weak, the agricultural sector barely serves as a source of inputs to the manufacturing sector.

These shortcomings reveal the wealth of value addition opportunities that policies can leverage to boost both the individual product’s value chain and transformation of the agricultural sector. For example, rice productivity can be boosted by setting up a self-sustainable improved-seed vulgarization and distribution scheme and linking smallholder farmers to large millers via contract farming. Introducing zoning of cotton growing areas could provide the right incentive to ginneries to invest in contract farming, which will in turn increase cotton productivity and quality. While cassava is viewed as a food security product by many, increasing the awareness of its versatility among agricultural value chain players and ensuring its constant availability will increase their willingness to invest in it and adopt it as a substitute for expensive starch. Finally, placing milk collection centers in strategic areas to optimize collection from small producers could be the key to reducing informal milk trading.

Interesting activities are already being undertaken at various stages of the value chain across the various products. While these activities are mainly supported by non-governmental forces, they are nevertheless important for rethinking a number of government interventions. Promoting agricultural transformation requires a full re-prioritization in favor of products that promise to deliver not just on food security but as inputs for a competitive agro-processing sector. Cotton and cassava are important crops that have the potential to address food security and promote a labor-intensive light manufacturing sector; however, policies made in the agricultural sector must be aligned to industrial policies in a way that generates mutual synergies. These synergies must be spearheaded by a strong institution that brings the important stakeholders/decision makers to one table to take quick action so as to avoid administrative delays.

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