Tanzania: Researchers Tout Large Scale Commercial Farming

Tanzania Daily News  | 22 March 2010

By Finnigan Wa Simbeye

Dar es Salaam — LOCAL and foreign researchers convened in Dar es Salaam last week to deliberate on Kilimo Kwanza initiative and, by the end of the two-day conference, they were convinced that the domination of agricultural sector by small scale farmers was a serious problem.

Small-scale farmers, they argued, lack capital, skills and can only manage to cultivate for subsistence, not commercial farming that the country needs to prosper.

Their deliberations therefore centred on how best to help the government implements the initiative, successfully, through large-scale commercial farming.

"I think one of the problems that have affected our agriculture sector is too many small scale farmers we need scale enhancement for our agriculture sector to be competitive," Prof Andrew Temu said while delivering a brief presentation on his experience during the 15th Research on Poverty Alleviation (REPOA) annual workshop.

He argued that small scale farming which is prevalent in rural Tanzania has no future but instead the country needs large scale commercial farmers including those from abroad to inject capital and technology.

Prof Temu's thinking was not far from that of the majority of the 300 plus participants who attended the workshop including Prime Minister Mizengo Pinda.

The premier touted outgrower system as one of the most effective models to help impoverished rural farmers become competitive.

Mr Pinda said the outgrower model that links smallholder farmers with companies using their crops as raw materials and financial institutions that provide credit, has succeeded in some crops and challenged researchers to find out if the same can be applicable to all crops.

"A major advantage of this model is the mentoring that takes place. This is vital for passing on information and training.

Additionally, this system removes the constraints that smallholders face in accessing finance and markets and provides opportunities for taking advantage of economies of scale," Mr Pinda who officiated the workshop noted.

And there was plenty of proof that the outgrower model works. Tea Research Institute of Tanzania's Executive Director, Professor Bruno Ndunguru testified how the outgrower model has worked in Rungwe district where small scale tea farmers are working with a strategic investor who has a factory to process the leaves.

The outgrower system which was introduced in 2001 when Tea Board of Tanzania paved way to the small scale farmers and the strategic factory investor, has improved yields, farmers' income and access to technology, modern crop husbandry practices and capital.

"The farmers now earn money by selling raw material to the factory but also get dividend annually as shareholders of the factory," Prof. Ndunguru noted.

The 16,000 Rungwe tea farmers who own 25 per cent of the factory shares are not only happy but also competitive.

A sugarcane farmer from Kilombero, Dr George Mlingwa, had another successful experience with small scale farmers in his district who have gone a step further. "We are bringing together 10 to 20 farmers with two to four hectares each and form a block to assist them be competitive," said Dr Mlingwa.

Under the block scheme, sugarcane farmers have managed to improve yields from 40 metric tons per hectare to 90 because they can access agro-inputs, extension services and capital easily.

With over 70 per cent of rural farmers in the country being the backbone of the economy, it's clear that despite arguments in favour of large scale commercial agriculture involving foreign investors, small scale farmers have a future in the globalised competitive market through the outgrower model.

It's policy makers' turn to use researchers' experience such as Prof Ndunguru and TRIT's successful experience to make decision in line with the government's Kilimo Kwanza strategy.

TRIT's Executive Director clearly stated that the outgrower model can be replicated in other crops including sisal where Salum Shamte of Katani Limited has for many years been doing the same thing.

Many countries in the world have fed their people, boosted exports and become globally competitive by maintaining the small scale farmers with focused government policy.

As Professor Hans Binswanger from Tshwane University in South Africa pointed out, small scale farmers are feeding over 1.3 billion people in the world's most populous nation, China.

"There are no large scale farmers in China, small scale farmers have made the country the world's second largest horticultural producer," argued Prof. Binswanger while delivering a key note paper on Kilimo Kwanza: Promoting Agriculture for Economic Transformation in Tanzania.

Countries such as Vietnam, the world's largest rice exporter, are also largely dominated by small scale farmers. As the researcher pointed out, what is important is for the government to address bottlenecks frustrating small scale farmers' efforts to become competitive.

Such hurdles include archaic policies which forbid famers from selling their food crops to foreign markets that offer the most returns, numerous taxes imposed on crops such as value added tax on sugarcane and poor rural infrastructure such as roads.
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