by David Brewin
Food reserve steps in as food prices rise sharply
The National Food Reserve Authority (NFRA) released 3,000 tonnes of maize into the market in early January, in response to a rapid rise in food prices. Prior to the release, wholesale maize prices in Dar es Salaam had reached TSh 87,000 for a 100kg sack, compared to around TSh 50,000 twelve months earlier.
NFRA chief executive, Milton Lupa, told The Citizen that the decision to release thousands of tonnes of maize into the market was aimed at stabilising prices. “CPB (the Cereals and Other Produce Board) will also release maize flour into the market in Dar es Salaam,” he added.
A number of regions – including Dodoma, Tabora, Singida, Mara and Shinyanga – will be supplied with maize from NFRA’s storage facilities, while Dar es Salaam will receive maize flour from CPB.
Opposition politician, Zitto Kabwe had earlier decried the high food prices and accused the government of failing to set aside adequate funds for buying reserve food. “In October 2015 when the fifth phase government came into office, the country’s food reserves amounted to 253,000 tonnes. However, they have since declined to 55,000 tonnes, which is equivalent to one kilogramme for every Tanzanian,” said Mr Kabwe.
Mr Lupa said an evaluation by the Agriculture ministry showed that 25,000 tonnes of maize were needed to offset any shortage up to March, this year, and 35,000 tonnes to May, adding that NFRA expects to purchase 110,000 tonnes of maize in May and June, this year. He said NFRA will this week dispatch 7,000 tonnes of maize to Zimbabwe in line with an agreement to supply the country with 20,000 tonnes of the cereal.
Two months previous, in November, Agriculture Deputy Minister, Hussein Bashe, had said the government would use the grain reserve to ease food shortages but would otherwise leave market forces to determine how much consumers would pay for the commodities. “When maize prices were low, MPs blamed the government for banning exports at the expense of farmers. This time we have opened up and we will not intervene so that farmers can also benefit from the price increase,” said Mr Bashe, answering questions in Parliament.
“The government will not control prices but will promote more production, reduce production costs and create an enabling environment for competition which will regulate the prices,” he said.
World Bank report focusses on Agriculture
The World Bank’s latest Economic Update on Tanzania – titled ‘Realizing the Potential of Agriculture for Inclusive Growth and Poverty Reduction’ – paid particular attention to the country’s agriculture sector.
The agriculture sector provides livelihoods directly to around 55% of the population (and three quarters of the poor) and indirectly to a further 15% within related value chain functions such as traders, transporters and processors. The report also found that 368,000 new medium-scale farms established in Tanzania between 2008 and 2014 created 13 million days of additional work annually for hired workers.
The authors emphasise the importance of having supportive public policies and spending which attracts private investment, in order to catalyse a transformation in agriculture. “What we are seeing for example is that medium-sized farms grew from 23% of all farm land holdings in the country in 2008 to 35% in 2014; and these are in the 5–20 hectare (ha) range, compared to the typical smallholding of 1–2 ha, whose numbers are decreasing” said Holger Kray, World Bank Agriculture Practice Manager and co-author of the report.
“The current trends in agriculture offer a tremendous opportunity to catalyse private investment, both local and foreign, and raise the incomes of the poor,” said the World Bank Country Director for Tanzania, Ms Bella Bird. “For Tanzania to speed up the agricultural transformation process, it should increase the quality and pace of needed policy reforms to make a business environment for agriculture more profitable and predictable,” she noted, adding: “We congratulate the government of Tanzania for improving the environment for agribusiness, by implementing local and national fiscal reforms, including removal of over 100 agriculture fees and taxes and limiting the use of export bans; a huge step forward.” (The Citizen, Daily News)
Cashew payments for 2018/19 still incomplete as 2019/20 market is extended
The government has not quite yet completed payments to cashew nut farmers for their 2018/19 crop. “The government has paid TSh707 billion out of TSh723 billion required, therefore we are supposed to make the remaining payment of TSh16 billion,” said the Minister of Agriculture, Japhet Hasunga, in early January.
The Minister added that the government’s evaluation team was still assessing eligibility of unpaid farmers, noting that payment would be concluded after the exercise has been completed.
This followed a meeting between Prime Minister Kassim Majaliwa and cashew farmers from Ruangwa, Masasi and Tandahimba districts, after which the Prime Minister directed the ministry to conclude paying cashew farmers unpaid monies.
It also emerged that Tanzania has exported almost all the raw cashew nuts that were purchased by the government last season (213,000 tonnes out of the 225,000), according to the ministry of Agriculture. This earned $251.7 million (around TSh 580 billion), considerably less than the TSh 720 billion that the government’s chief spokesperson, Dr Hassan Abbas, said the government had spent in purchasing the nuts from farmers. It is also less than half the amount ($575 million) earned from the 2017/18 harvest, largely due to fluctuating global prices.
The ministry also said that over 4,800 tonnes were given to domestic processors, out of which over 800 tonnes have already been processed for export and domestic consumption. “We are looking for buyers of the remaining 4,000 tonnes. Some will be provided to local firms to strengthen the domestic processing capacity,” said Mr Hasunga.
Meanwhile, auctions for the 2019/20 crop of cashew nuts in Mtwara, Lindi and Ruvuma was extended by nine days to ensure that the entire crop is sold.
“This means that farmers remaining with unsold cashew nuts – and buyers who are willing to buy the crop – can continue to trade,” said the Minister, adding: “The government is aware that some farmers still have unsold stocks and they should, therefore, take advantage of the extended period.” Other regions with later harvest seasons, such as Coast, Tanga and other regions were not affected by the new deadline.
At the time of writing, 209,000 tonnes of raw cashews had been sold in the auctions, out of a projected total harvest of 290,000 tonnes in the 2019/20 farming season.
The Ministry is sticking to its promise not to interfere in raw cashew nut prices this year.