Agriculture remains the main source of income and employment for the rural poor, for up to 80% of Tanzanians. It also has large forward linkages to agro-processing and consumption and thence to the rest of the economy. Agriculture also accounts for half of Tanzania’s exports. Indications are that traditional export crops may have larger employment and multiplier effects than non-traditional crops, though the latter may be profitable niche activities. As indicated in the National Poverty Eradication Strategy, Vision 2025 and the Poverty Reduction Strategy Paper, a growing agriculture sector is essential to reduce poverty.
Agricultural policy is thus a linchpin of a good rural development strategy aimed at reducing poverty. A significant body of work has been carried out by IFPRI as input into the World Bank’s Country Economic Memorandum (World Bank and IFPRI 2001). Agricultural policies will tend to affect some or all of the following: (i) composition of agricultural output; (ii) agricultural technologies; and (iii) the structure of agricultural assets (for example, the distribution of land). All of these transmission mechanisms have differential impacts for the poor.
Much work is needed to further extend the body of work carried out by IFPRI and by Tanzanian researchers to understand the linkages between agricultural policies, agricultural growth and the poor.
What is the impact on the poor of policies that reform state marketing boards, altering price policy, correcting for rural bias in service provision, removal of subsidies and so on? How does this impact differ for men and women? Old and young? How has it affected the employment of children?
What types of strategies have smallholder cultivators adopted and does this differ by region or type of crop produced? What have the implications been (if any) on intra-household dynamics?
What are the employment multiplier effects associated with smallholder versus large-scale farm production?
What are the links between different economic activities in the household economy? For example, through case studies, can we track what has happened to nutrition as households switch from food crops to cash crops and what are the implications for policy? The Household Economy Approach can be drawn on here.
The agriculture sector strategy in the PRSP currently focuses primarily on research and extension, access to inputs and improved rural roads.1
A crisis in the marketing system for both crops and livestock has been documented by in-depth studies by the Rural Food Security Policy and Development Group in Njombe, Shinyanga Rural and Ngorongoro Districts (Mbilinyi et al 1999, Mbilinyi and Nyoni 2000, Mung’ong’o 2001) and by Tanzania Agriculture Situation Analysis in Mtwara and Lindi (Chachage and Nyoni 2001). Cotton growers in Shinyanga in Njombe emphasised the need for both reliable and competitive markets, and deplored the monopsonistic practices of private company buyers. Cotton buyers from different companies had acted together as a buyer cartel so as to maintain artificially low prices, and usually purchased crops on a credit basis, against the interests of the producers. Maize prices had fallen drastically in Njombe, causing maize growers to consider alternative crops. Livestock-keepers in Ngorongoro emphasised the absence of viable markets for livestock and veterinary inputs, and the prevalence of corruption at every step in the marketing structure.
Cashew nut growers complained about the lack of a sure, reliable market, and the drastic fall in producer prices this season compared to last. Their refusal to sell their harvest in protest at the low prices is one measure of the seriousness of the situation. A separate issue is linked to possible collusion between cashew nut industrialists in India and the Cashew Nut Board to promote export of raw cashew nuts as cheap raw materials for Indian factories. The wide range of alternative markets for processed cashew nuts has been ignored, along with the possibility of rehabilitating local cashew nut processing.
The crisis in incomes and marketing among agricultural producers has contributed to their shift into non-farm activities, and/or into alternative food crops with brighter market prospects. Smallholder producers have experienced falling rates of return in production of many crops, though there is disagreement as to the causes – the withdrawal of subsidies and trade liberalisation (Market Development Bureau studies and other references cited in Mbilinyi 1997, 1999) or real exchange rate appreciation and weakening reform (World Bank 2001). A survival strategy adopted by growers of tobacco, coffee and sugar cane is to reduce wage costs by substituting unpaid family labour for waged farm workers, with unknown consequences for household gender relations.
What is the state of competition in the agricultural sector? To what extent is the evidence of anti-competitive behaviour in the districts and crops above replicated more widely? If they are, what policies can help to rectify the situation? How can the proposed Competition Policy be strengthened to ensure that it covers these types of situations?
Research is needed to explore the dynamics of household production in more detail, and to examine the degree to which family members comply with demands for unpaid family labour. The high level of non-farm work carried out by women and youth in rural households is suggestive of resistance at the household level, which may provide a partial explanation for declining output in export crops.
Greater analysis is needed on the potential conflict between commercialisation and modernisation of agriculture on the one hand, and the status and income of smallholder producers on the other.
What specific measures are needed to support poor smallholder cultivators and livestock-keepers so that they benefit from the modernisation/commercialisation process, and their livelihoods are ensured?