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Focus Area

1. Background

1.1. Maize Production

Maize is the main food crop of Tanzania averaging 4.5 million metric tons in 2010/2011 seasons Tanzania is endowed with more than 3.3 million hectares land with suitable climate (medium-high elevation) for the production of specialty maize that commands high prices on the world market.

The current average yield per hectare is between 1.2 ton/ha (MOAFSC statistics 2011/12- see below table).) and 2.0 tons. (FAOSTAT 2012). Tanzania has the capacity to produce 1.3 – 1.5 metric tons per hectare annually if small-scale farmers were to adopt improved farming practices. Maize production has been increasing from year to year due to priority set by the government.(see table below).

Years 2003/4 2004/5 2005/6 2006/7 2007/8 2008/9 2009/10
Production (MT) 3232400 3218540 3423025 3302058 3555833 3326200 4475416
Export in (MT) 0 0 0 50000 50000 15000 44690

Source: Maendeleo ya Kilimo na Ushirika kwa kipindi cha Miaka 50 ya Uhuru kwa Tanzania Bara (1961-2011) and FAOStat 2012/13, Copyright 2011, Agriculture and Trade Opportunities for Tanzania, working paper , Dcember 2011, United Nations University, UNU-WIDER Food Security, IFPRI,www.foodsecurityportal.org/tanzania.

Maize production in Tanzania has been increasing from year to year due to priority has been provided by the government Tanzania is endowed with more than 3,3 million hectares of lands suitable for maize production. Increase in yield are mainly caused by amount of farm inputs, technology and know-how of producer.

Maize is grown all over the country especially in Iringa, Mbeya, Ruvuma, Rukwa, Tanga, Kilimanjaro, Kagera (Biharamulo), Morogoro and in Arusha/Manyara regions. 40% of the national maize production comes from 4 regions: Iringa, Mbeya, Ruvuma, Rukwa.

Small-scale farmers are dominating the maize production in Tanzania. They account for roughly 85 percent of total production. Medium and large-scale farms make up for 10

percent and 5 percent respectively. Although large and modern farms exist, agricultural production in Tanzania remains grounded on subsistence farming.

Maize is mostly grown under rain fed cropping systems that can be classified into two categories, namely; the short rains (Vuli) season that starts from September/October to January/February and the long rains (Masika) season from February/March to June/July.

Maize is available in large quantities from March to August and in smaller quantities during August to January.

The marketing of maize is done through private markets as well as through the mixed crop board, under the Ministry of Agriculture, Food Security and Cooperatives.

 

1.2 Rice Production

Rice is the second most important food and commercial crop in Tanzania after maize; it is among the major sources of employment, income and food security for Tanzania farming households.

Tanzania is the second largest producer of rice in Southern Africa after Madagascar with production level of 1,1 million tons (FAOSTAT, 2010- see below table). The rice cultivated area by 2012 was 720,000 hectares and the average yield per hectare from 2003-2012 is very low, 1.8 tons per ha.

About 71 % of the rice grown in Tanzania is produced under rain fed conditions; irrigated land presents 29 % of the total with most of it in small village level traditional irrigation systems.

Farmers grow a number of traditional varieties, these varieties have long maturity and yield is affected with irregular rainfall pattern and occurrence of pests which contribute to the yield decline.

Historically, rice has been categorized under the staple food crop rather than commercial/cash crop. However, in recent years with the rapid growth of cities and towns propelled by rapid population growth, the country has experienced enormous increase in rice demand. With negligible percentages of rice imports, most of rice demanded and consumed by the urban population is sourced from the rural rice producing areas that have stagnating production capacities. For this reason, rice has consequently been transformed into commercial crop.

Tanzania is endowed with more than 2 million hectares of lands suitable for rice production. Increase in yield are mainly caused by amount of farm inputs, technology and know how of producer. Rice production in Tanzania has been increasing from year to year due to priority has been provided by the government.

 

Table 2: Rice production and export yield trends

Years 2003 2004 2005 2006 2007 2008 2009 2010
Production (MT) 1096920 10556460 1167690 1238560 1341850 1346340 1334000 1104890
Export in (MT) 7825 140 4158 78 1025 523 45  

Rice is mostly grown in Mwanza , Shinyanga (Bariadi & Maswa), Morogoro (Kilombero, Wami- Dakawe ); Tabora (Igunga), Kilimajaro (lower Moshi), Coast (Rufiji, Lindi), Mbeya (Mbarali, Kyela, Kapunga) and Rukwa Regions. 25% of the national rice production comes from 2 regions: Mbeya and Morogoro Rice production in Tanzania is mainly done by small and medium size rice farmers. However there have been a number of large scale mechanized rice schemes in the country (mainly for export). There has been an increase from year to year due to priority has been provided by the government. The marketing of rice is done through private markets as well as through the mixed crop board, under the Ministry of Agriculture, Food Security and Cooperatives.

2. Potential for Investment in Maize and Rice Sub-Sector. 

2.1 Maize sub-sector

  • Maize investment opportunities are in Southern Corridor that includes Rukwa, Ruvuma, Mbeya and Iringa regions. For Northern Zone, Manyara and Arusha are high potential. In the Lake Zone Tabora and Mwanza regions are high potential for maize production.
  • The potential maize area is estimated at 5 million hectares, but at present only 1.5 million hectares is under production. 

Therefore investing in the maize sub-sector should focus on:

  • Expanding the existing area under maize production by making use of advanced types of farm mechanization, ox plough and other labour saving technology.
  • Intensification of maize production. Yields of maize can grow higher from 1.3 to 3 tons/ha. by improved agronomic practices making use of adequate amount and type of farms inputs such as improved seeds, fertilizers, agro-chemicals and extension services.
  • Better access of farmers to improved seed varieties to enhance productivity at farmer level for maize.
  • Developing sustainable mechanism for providing improved agronomic skills and enhance
  • Farmer’s organization in maize production, processing and marketing.
  • Developing the export potential in countries like Kenya, Somali, Djibouti, Southern Sudan, Ethiopia (during food crises) and also potential markets in Zambia, Malawi and DRC
  • Introduction, operation and maintenance of tractors and other forms of farm mechanization in maize production. Loan repayment is an essential part of the introduction of tractors and other farm mechanization equipment.
  • Agro-processing. Milling of maize into flour for human food consumption; the maize bran can be used for feeding the cattle, pigs and local breeds of poultry.
  • Innovative marketing and business linkages with the private sector actors in maize sector.
  • Enhancing synergies and cooperation with other actors performing facilitation role in the sub-sector.

2.2. Rice sub-sector

  • The potential rice area is estimated at 2-3 million hectares, but at present only 720,000 Ha is under production. To materialize this potential a lot of efforts have to be put in rehabilitation and expansion of the cultivable rice area under irrigation. Many river valleys and deltas are still to be opened up for rice cultivation.

Therefore investing in the rice sub-sector should focus on:

  • Expanding the existing area under rice production by introduction of tractors and other forms of labor savings technology such as ox plough and farm mechanization.
  • Intensification of rice production. By improving agronomic practices such as making use of adequate amount and type of farms inputs such as improved seeds, fertilizers, agrochemicals and extension services, yields of rice can grow higher from 1.9 to 4 tons/ha.
  • Better access of farmers to improved seed varieties to enhance productivity at farmer level for rice.
  • Developing sustainable mechanism for providing improved agronomic skills and enhance
  • Farmer’s organization in rice production, processing and marketing.
  • An export potential for rice could be developed in Kenya, Uganda, Zambia, Malawi and DRC.
  • Introduction or further expansion of farm mechanization tools and equipment in rice production. When tractors are being introduced also attention should be given to operation and maintenance of equipment and loan payment.
  • Agro-processing. Paddy milling produces white rice for human food consumption; The rice can also be milled into rice flour. The rice bran can be used for feeding cattle, pigs and local breeds poultry. Husks can be used for bedding material.
  • Innovative marketing and business linkages with the private sector actors in rice sector.
  • Enhancing synergies and cooperation with other actors performing facilitation role in the sub-sector.

 

Marketing possibilities

  • A large and secure market exists in Tanzania especially in regions where there is food shortages. Also the increase of the population in Tanzania has created enough demand of the rice and maize crops as staple crop and the price has gone up.
  • There is a large and growing domestic market for rice especially in urban areas.
  • Rice prices are supported both by high international demand as well as the potential for some regions.
  • A potentially large export market is emerging in Africa, especially in neighboring countries.
  • Direct access via investment in good infrastructure (transport, communication and storage)

3. Financing needs for the Maize and Rice sub-sector.

Entrepreneurs and small holder farmer groups may seek financial assistance for:

  • Access of improved seeds and land mechanization (including labour costs) for farming
  • The purchase farm inputs (fertilizer, agro-chemicals, seed)
  • The purchase of mechanization equipment (tractors, power tillers, combined harvester and planter)
  • Purchase means of transport (loaders & trucks) - Installation or expansion of irrigation systems and/or equipment.

4. How can PASS help Farmers in the further expansion/Intensification of the Maize and Rice Sub- Sectors.

  • Through feasibility studies and business plans PASS can assist entrepreneur’s access to bank loans (financial linkages).
  • PASS can assist in management training for entrepreneurs and smallholder groups in the maize and rice sub-sector.
  • Capacity building and formation of farmers groups and set up of SACCOS.
  • Assist with strengthening links between farmer groups and processing plant.
  • Support farmers with inadequate amount of collateral / security for a commercial bank loan.

 

1. Background

Tanzania ranks is third in Africa on livestock production and in terms of cattle population after Ethiopia (31 million) and Sudan (30 million). According to 2007/2008 livestock census, the dominant species are cattle (21,280,875) followed by goats (15,154,121), sheep (5,715,549) and pigs (1,584,411). The total number of livestock units is 25,977,665. About 90% of the livestock population is of the indigenous type. The livestock sector provides livelihood support to approximate 1,745,776 (37%) households, out of a total of 4,901,837 agricultural household (URT, Livestock survey census 2005.). The livestock sector grows at a rate of 2.7% per annum. The livestock industry contributes 30% of agricultural GDP (2010). The livestock sector contributes about 4.7% of the GDP (947 billion TZS)- which was equivalent to 789 million USD (2009 data). 24 million ha are used for cattle grazing (2007/2008 livestock census) mostly in Shinyanga, Arusha, Manyara, Tabora and Mwanza. The highest goat population is in Shinyanga, Arusha, Manyara and Tabora. Pigs are more common in the southern regions of Mbeya and Iringa, as well as in Kilimanjaro and Dar es Salaam regions.

Meat Production

Common sources of meat are beef cattle, sheep and goats, pigs and poultry. Cattle contributes 53% of the total meat production, whereas sheep and goats contributes 22%. Beef production in Tanzania mainly comes from traditional sector that is dominated by Tanzania Short Horned Zebu (TSHZ), agro-pastoral system contributes 80% and pastoral system contributes 14%. Only 6% of meat production comes from commercial ranches. In 2009 the annual meat production was 449,673 tons and per capital meat consumption was 12kg. Hence we lag behind the recommended consumption standard of FAO that is 50kg per annum. Current per capita meat consumption stands around 24kg per annum.

The country produces 462,686 tonnes of meat annually for domestic consumption but also imports 800 tonnes high quality meat to meet demand for tourist hotels and mines. There is also a substantial export of meat and live animals. Statistics show that the country earned TZS 3.81bln/- from the export of 3,362 cattle and 4,060 goats and sheep. (2011/2012).

Challenges facing Production and Productivity in Beef SubSector

  • Availability of fast growing meat animals for production of quality meat
  • Increasing livestock production infrastructures
  • Consistent supply of quality feed resources
  • Control of livestock diseases
  • Improving livestock marketing efficiency
  • Provision of technical support devices
  • Strengthening livestock farmer organizations

 

Milk Production

About 600,000 of total cattle population in Tanzania are dairy cattle. Milk production from cows during the wet season was 1.6 billion litres and 0.9 billion litres during the dry season. About 60% of milk produced by indigenous cattle kept in rural areas, and 40% kept by improved cattle mainly by smallholder producers, milk yield from indigenous to improved dairy cows ranges from 1-2 litres and 7-10 litres per cow per day respectively, at present 10% of milk produced annually enter the market, and the remaining is consumed at home or considered to a waste commercially mainly due to lack of collection system.

At present there are about 48 small and medium milk processing plants with installed capacity of 394,600 litres per day. The majority of these plants operates at very low capacity. The average of these processing plants currently process about 105,380 litres/day, which is equivalent to 27% of installed capacity. The current processing capacity accounts for 5% of the annual milk production as many consumers buy unprocessed milk from dairy farmers in their neighbourhood.

Challenges facing Production and Productivity in the Dairy Sub-Sector

  • Availability of quality dairy animals
  • Consistent supply of quality feed resources
  • Control of livestock diseases
  • Provision of technical support services
  • Establishment and strengthening of dairy farmers organizations
  • Improving accessibility to credit facilities
  • Increasing processing capacity
  • Increasing domestic demands through milk consumption promotion

 

2. Potential for Investment in Beef and Dairy Industry.

Carrying capacity of the rangeland in Tanzania is estimated at 20 million animal units but currently there are only 16 million animal units. There is ample potential for expansion of the livestock industry through better animal husbandry, improve breeding and addition of livestock.

The import of 800tonnes of high quality meat for tourist hotels and mines cost Tanzania 10billion annually. This demand could potentially be met by high quality local production. This situation could also be used as a window of opportunity to improve the standard of beef production and meat grading in slaughterhouse operations. 

The increasing demand of meat of the eastern and southern African countries are potential market once better animal husbandry practices are adopted and improved processing facilities established and operational.

 

Potential for Increase in Output/Production and Productivity of Meat Animals

  • Breeding of High Quality Young Stock (Beef Cattle)
  • Improvement of Quality and Quantity of Animal Feeds
  • Hygiene and Proper Care of Animal Stock
  • Veterinary Care and Control of Livestock Diseases
  • Paddocks and Access to Clean Drinking Water
  • Establish and Strengthen Livestock Farmers Association
  • Improving Access to Credit Facilities
  • Increase and Improve Meat Processing Capacity (Slaughterhouse)
  • Improve Efficiency of Livestock Marketing System

 

Potential for Increase in Output/Production and Productivity of Dairy Animals

  • Breeding of High Quality Stock (Dairy Animals)
  • Hygiene and Proper Care of Animal Stock
  • Improvement of Quality and Quantity of Animal Feeds
  • Veterinary Care and Control of Livestock Diseases
  • Proper Housing of Animals and Access to Clean Drinking Water
  • Establish and Strengthen Dairy Farmers Organizations
  • Improving Access to Credit Facilities
  • Increase and Improve Milk Processing Capacity (Quantity & Quality)
  • Increasing Domestic Demands through Milk Consumption Promotion
  • Improve Efficiency in the Milk Marketing System

 

3. Financing Needs for the livestock sector

Financial support in this industry is of great importance due to its capital intensity.

Financial needs for the livestock sector falls under:

  • Establishing of meat and dairy processing facilities for the domestic and export markets, including such products as cheese, butter, ice cream, condensed milk, canned meat and processed poultry products.
  • Establishment of animal feed mills and establishment of specialized livestock fattening industries.
  • Provision of veterinary services in the areas of diseases monitoring, control and prevention.
  • Establishment of cold storage and transportation facilities for livestock products.
  • Establishment of training institutions for the livestock industry.
  • Provision of specialized sea livestock carriers and ship with refrigerated containers required for chilled and frozen meat and dairy products during export.

Livestock Entrepreneurs / Farmer Groups may seek financial assistance for:

  • The purchase of animal or breeding stock (including labour costs)
  • The purchase of animal feeds.
  • The purchase veterinary inputs (vet. drugs, sprayers).
  • The modernization and or expansion of meat and dairy processing plants.
  • Purchase transport and equipment.
  • Storage facilities, packaging and marketing equipment.

 

4. How can PASS help Farmers in the Beef and Dairy Industry? (in the livestock sector by intensification of animal production and improved beef and milk processing).

  • Through feasibility studies and business plans PASS can assist entrepreneurs access to bank loans (financial linkages).
  • Assist in capacity building of farmers groups and entrepreneur management skills
  • Assist livestock entrepreneurs with layout for cattle fattening, preparation of animals feeds & sheds and design and equipment for milk processing plants
  • Assist animal husbandry producers with market linkages and assist dairy factories in marketing strategies for improved retailing of milk products.
  • Organization of farmers into groups, which can be used as focal points for contract farming, input supply credit, produce -price negotiation and provision of advisory service.
  • Support livestock farmers and beef and dairy agribusinesses with inadequate amount of collateral / security for a commercial bank loan.
  • Assistance of eligible individuals and companies to access loan facilities for their viable investment through appraisal of loan write ups in line with specific bank’s terms and condition and linkages.

 

1. Background

The floricultural and horticulture industry in Tanzania has around/approximate 50-100.000 hectares. This is approximate 5-10% of the total farm land under cultivation.

Most of the horticulture lands are located in low and highlands, but export oriented horticulture is concentrated in the higher-altitude temperature zones of Arusha and Kilimanjaro regions. The commercial floricultural belt is almost exclusively in the Arusha and Kilimanjaro regions located, although a few experimental flower farms are located in the higher-altitude temperature zones of the southern Highlands near Iringa-Njombe and Mbeya.

Central plateau (Morogoro/Dodoma)
Mbeya
Northern highlands (Arusha/Kilimanjaro)
Coast Zone (Tanga/Pwani) Southern highlands (Iringa)
Suitable for tropical fruit (passion fruit, mangos) as well as flowers Citrus fruit and tropical fruit Ideal for full range of European flowers, cuttings, vegetables, fruits and seeds Citrus fruit and tropical fruit Ideal for full range of European
flowers, cuttings,vegetables, fruits and seeds
Advanced plans by consortium of 16
Dutch flower farmers to set up farms
Associati on of mango
farmers exporting to Asia
More then 30 flower and vegetable farms already exporting to Europe Dutch group developing passion fruit frozen concentrate operation Traditional fruit growing area

 

Horticulture and Floriculture Production & Statistics

Tanzania produces 1,709,622 metric tons of fruit, 656,513 metric tons of vegetables and 9,390 metric tons of flowers annually (MAFC, 2012).

Horticulture sub-sector registered a growth of eight to 10 per cent in the last four years before the 2008/2009/2010 global economic crunch.

Currently the country earns only about $200 million annually from the export of horticulture produce, the amount considered far below the existing potentials.

Tanzania Annual Fresh Vegetables, Flowers and Fruits Production 2005/2006-2010/11 (MT).

Years 2005/6 2006/7 2007/8 2008/9 2009/10 2010/11
FRUITS            
Total 1397353 1498466 1645370 1741760 1990052 198374
VEGETABLE            
Total 518269 588209 602905 678687 769921 781091
FLOWERS            
Rose 4792 5450 6659 7200 8850 10500
Cuttings 1070 1348 1618 2150 2952 3754
Total 5862 6798 8277 9350 11802 14254

 

Floricultural Production

According to the market possibilities, the main export destination of Tanzania’s cut flowers is the European Union. Currently, the Netherlands imports about 90% of Tanzania flowers. The market is open in most European countries for Tanzania flowers using the opportunity granted by the EPA and EBA agreement between the European Union and Tanzania, being a member of the ACP group of countries. There is a growing demand for Tanzania’s flowers in the Gulf States and in the local market for example Dar-es-Salaam, Arusha and Moshi. So it is high time for the farmers in Tanzania to step up and tap the outstanding opportunities that have presented themselves in our fortunate nation.

Cut roses are the main flowers produced in the floricultural industry of Tanzania and account for between 75% and 80% of all flowers produced for export. Flowers are produced as final consumer products and need no processing after harvest. Harvesting can be done three times a year in the case of annual flowers. Most cut roses are produced in Arusha and Kilimanjaro regions.

More than 40 export-oriented floriculture and horticulture enterprises already operate in Tanzania, employing more than 10,000 people. Exports are growing by more than 7% per year.

 

2. Potential for Investment in Horticultural and Floriculture Industry. 

At present Tanzania has only reached a 10% of the total exports volume/value and jobs generated of the horticulture and floriculture produce/ sector of the East African Region. Therefore there is still a hugh potential to develop horticulture and floriculture in Tanzania, as it has ample land and water resources, but more emphasis has to be placed into training of skilled manpower.

Horticultural and Floricultural Production

Expansion of Horticulture and Floriculture areas:

  • The horticulture and floricultural industry and mostly concentrated in the northern regions of Arusha and Kilimanjaro regions, but there is potential to expand the production in Morogoro, Tanga, Iringa and Mbeya regions, which are also viable for the production of flowers and vegetables.

Intensification of Horticulture and Floriculture areas:

  • Here the attention should be on procurement of high quality seeds, application of other recommended agronomic practices such land preparation , fertilizers, agro-chemicals and use of trained labor force.

Develop Production and Marketing Infrastructure

  • Provision of expertise and direct services in the construction of green houses at affordable costs. The large costs of constructing green houses for the flower industry have kept many investors at bay.
  • Establishment of seed farms for flowers. Currently most flower seeds are imported largely from Holland
  • Development of adequate (cold) storage and other marketing equipment in collection centers and on international airports (Kilimanjaro and Dar-es-Salaam).
  • Provision of cold vans for transporting flowers from farms to airport. Lack of cold vans has stymied the growth of the industry and has kept most small-scale producers away from the industry.
  • Establishment of air cargo services for the expanding industry
  • Provision of technical support and advisory services especially with regard to inspection and grading of flowers before they are exported.

 Basically potential investors are encouraged to invest in horticulture and floriculture suc-sectors as a good return can be expected in the high potential areas.

 These regions are Arusha, Kilimanjaro, Morogoro, Tanga, Iringa and Mbeya. These regions have a conducive infrastructure system that can aid the transportation of the flowers and vegetables to airports for further exported to the abroad. Producers in Arusha and Kilimanjaro regions have easy access through the Kilimanjaro International Airport (KIA), where Iringa and Mbeya regions are close to the international airport that will be constructed in Mbeya town. Tanga is close by to the Mombasa International Airports and lastly Morogoro region which is a close neighbor to the Dar-esSalaam International Airport. All above mentioned regions have large arable lands suitable for temperate production of fresh and dried flowers for the world market. So in all the five regions pointed, there are investment opportunities for commercial flower and vegetables production. Furthermore there is also the availability of cheap labor which can help to minimize the production cost. So, Tanzania has open doors for investors to exploit these outstanding opportunities / potentials that are available.

Develop Existing and Future Market Potential

The main export destination of Tanzania’s cut flowers is the European Union. Currently, the Netherlands imports about 90% of Tanzania’s flowers. Most are sold at the auctions and therefore preference and price for Tanzania flowers is based on quality. Only about 10% are supplied to retailers in other European countries (Germany, the United Kingdom, Norway, Sweden and Italy) where some bargaining for prices can take place.

Global demand for floriculture and horticulture products is large and growing, particularly in markets that Tanzania is well placed to supply. This global demand has been growing by more than 7% per year; over the same period, production in the traditional (e.g. European) countries has been flat or declining. Demand is growing fast in Asian markets, in countries like China, India and the Middle East. Dubai has recently started the Dubai Flower Centre (with the capacity to become the world’s second largest fresh produce hub) and is seeking to develop new sources of supply.

 

Infrastructure system

Basically there are vital locations that investors can invest in return for huge dividends due to the potentiality of the location. These regions are Arusha, Kilimanjaro, Morogoro, Tanga, Iringa and Mbeya. These regions have a conducive infrastructure system that can aid the transportation of the flowers and vegetables to the Airports ready to be exported to the abroad. For Arusha and Kilimanjaro have easy access through the Kilimanjaro

International Airport, where Iringa and Mbeya regions are close to the international Airport that will be constructed in Mbeya town, Tanga is close by to the Mombasa International airports and lastly Morogoro region which is a close neighbor to the Dar-es-Salaam

International Airport. Apart from that the regions mentioned above have large arable lands suitable for temperate production of dried flowers for the world market. So in the five regions pointed are all ideal for commercial flower and vegetables production.

 

Irrigation systems

Floriculture like any other agricultural industries is a farming operation that use the most efficient means of farming irrigation, and in this case, water is a key input. If roses go without water for 24 hours, replanting may be necessary and this is expensive. Farms are therefore located in areas where water supply is assured. Deliberate steps are taken (through reservoirs, boreholes, etc.) to ensure that water availability is at least twice as much as demand at any time. Sources of water include springs, rivers and boreholes.

Drip irrigation is the system most commonly used, being the most efficient available. Six farms uses drip irrigation while the remaining two uses overhead sprinklers.

The sources of water are boreholes, springs and rivers such as Usa and Nduruma in Arusha region.

 

Employment Opportunities/Possibilities

The sector appears to make intensive use of female labour. It is quite evident that it has created new jobs for women and provided additional income-earning opportunities for field research and case studies were carried out on cut-flower growers who have significantly altered their local production and employment base by entering the cut-flower export market.

Cut-flower production employs 2,347 workers from surrounding villages, the majority (57 per cent) being women, their jobs being harvesting, grading and packing. Men spray, irrigate and do similar manual tasks.

Employment is categorized into four groups – management, skilled labour, casual labour and others (especially the consultants engaged in the maintenance of cooling machinery, extension and quality control services, and marketing).

Local communities have also benefited from increasing incomes. Inter-regional migration has been encouraged from Singida, Dodoma, Tanga and Kilimanjaro. Coffee farmers in the Arumeru district of the Arusha region have sold/leased their farms for cut-flower production.

Most employees come from the surrounding areas with Arusha, Kilimanjaro, Singida, Tanga and Dodoma being the major sources. Seven farms indicated that most of their labour force came from Arusha and Kilimanjaro.

This implies that the labor market allows mobility of workers to the cut-flower industry. These workers are sufficiently adaptable and flexible to respond to changing requirements of the workplace and to enhance the competitiveness and growth of the industry.

 

3. Financial the Needs of the Entrepreneur in the Horticultural and Floricultural Industry.

Entrepreneurs / farmer groups may seek financial assistance for:

  • The Production of Flower Seedlings (including labour costs).
  • The Purchase of Farm Inputs (fertilizer, agro-chemicals, sprayers).
  • Construction of Greenhouses and Product Handling and Packing facilities.
  • The Modernization and or Expansion of Production and Marketing facilities.
  • Purchase Transport (possible cold vans) and Equipment.
  • (Cold) Storage Facilities, Packaging, Grading and Marketing Equipment
  • Installation or Expansion of Irrigation Systems and/or Equipment.

 

4. How can PASS help farmers in the Horticultural and Floricultural production

  • Through Feasibility Studies and Business Plans PASS can assist entrepreneurs access to bank loans (financial linkages).
  • Capacity Building of Farmers Groups and Entrepreneur Management Skills.
  • Market Survey and Assistance with Market Linkages.
  • Support horticulture and floriculture farmers with inadequate amount of collateral / security for a commercial bank loan.

PASS’s core business is to provide advisory and financial services (mainly financial linkage with/out credit guarantee). In this PASS prepares presents to commercial banks and thereafter supports those investments with credit guarantee fund. PASS collaborates with commercial banks in which at present there are seven partner banks.

1. Background

Irrigation is the controlled flow of water to the farmland in order to optimize farm production. It is used to assist in the growing of agricultural crops. Irrigation has also been used for suppressing weed growing in grain fields and helping in preventing soil degradation.

Modern irrigation was introduced in Tanganyika in 1930 through the establishment of the Tanganyika Planting Company Ltd (TPC) and other commercial farms and estates. Since Independence a large potential for irrigation has been identified, partly as commercial irrigation schemes, partly for smallholders organised in water users associations (WUA). Only part of that potential has sofar been realised.

 

2. Present Situation of Agricultural Irrigation in Tanzania.

At present Tanzania has large number of small, medium and large scale irrigation schemes. The total area under irrigation is at present 270,000 ha of a 29,400,000 ha total area suitable for irrigation. 2,300,000 ha is considered high potential and 4,800,000 ha is considered medium potential for irrigation.

The actual land under irrigation 3.8 % of total potential and this is only 0.92% of the total area suitable for irrigation.

Irrigation and drainage are interlinked. Irrigation is the controlled supply of irrigation water. This can never be achieved without proper control of excess water (‘drainage’).

This is also vital to avoid salinization of soils and hence making farming land less productive. Irrigation is another way to increase productivity of farm land and create conditions for a more stable harvest and hence increase income.

Irrigation and drainage services are often combined into one Government Irrigation and Drainage Department in Tanzania this is called the Zonal Irrigation Office. Some irrigation schemes are built with private funds or funds and labour input from farmers’ associations, producer cooperatives; irrigations associations.

 

3. Potential for Investment in Agricultural Irrigation.

29,400,000 ha is considered the total area suitable for irrigation. Another source mentioned that 2,300,000 ha is considered high potential and 4,800,000 ha is considered medium potential for irrigation, which still need to be developed.

Large areas available for irrigation and mechanisation (flat; deep soil) with sufficient access to (irrigation) water in their respective ‘catchment areas’.

Irrigation combined with mechanization can improve land and labour productivity, hence increase the low farm income as farmers in the past were dependant on rainfall farming with risks of floods, drought etc.

Effective irrigation also needs to be combined with increased use of farm inputs (high quality seeds, fertilizers, agrochemicals etc) to reach maximum yield increase. Also mechanisation can improve productivity and reduce dependence on hoe / ox plough for land cultivation.

Irrigation and drainage structures can also be built with private funds or funds and labour input from farmers’ associations, producer cooperatives; irrigations associations. However, cost of design and building physical irrigation and drainage structures is high: up to USD 1,000 – 1,500 = TZS 1.6 – 2.4 million per ha for technical irrigation and USD 500 – 700 = TZS 0.8 – 1.1 million per ha for semi-technical irrigation.

Traditional irrigation – which is less productive due to inadequate water control is cheaper per hectare. On individual farms, especially on intensive horticulture farms (vegetables, fruits & flowers), sometimes individual pump irrigation may be technical and economically feasible.

 

4. Operation & Maintenance of Irrigation Schemes and set up of Water Users Associations /Irrigation Members Associations.

In order to improve operation and maintenance of irrigation schemes it is recommended to:

  • Conduct training of WUA/ I.A Leaders and members on how to operate and maintain irrigation schemes and collect water fees for O & M.
  • Share Cost for Operation and Maintenance (O & M) of irrigation schemes between user and government/irrigation board.
  • Review possibilities for out-contracting of O & M Services (attractive for bank lending).
  • Potential for establishing/expanding of farmers groups in irrigation areas.
  • Potentials organise mechanisation pools and/or tractor hire services for members in the irrigation areas(attractive for bank lending).

 

5. High potential areas for Introduction and/or expansion of Agricultural Irrigation.

  • SAGGOT, this include Morogoro; Iringa, Mbeya, Ruvuma Sumbawanga Central Zone, this include Dodoma; Shingida;
  • Lake Zone, this include Shinyanga, Mwanza; Mara; (only 4 districts in Kagera: Biharamulo/Chato and Karagwe; Missenyi).
  • Manyara Region: Kiteto; Babati and Hanang esp. Bassoto District.
  • Arusha & Kilimanjaro Regions: all districts, esp Lower Moshi Irrigation schemes and similar irrigation schemes in Same etc
  • Coastal Zone, this include Tanga (excl Lushoto), Bagamoyo, Kibaha, Rufiji Basin, Lindi, Mtwara.

 

6. Financing needs for / in Agricultural Irrigation Schemes. 

Due to the high cost of building medium size and large scale (semi-) technical irrigation schemes, most irrigation and drainage works are implemented with government funds (sometimes also with grants/loans from international financial institutions). Usually the design is made by private engineering companies, who will later also be responsible for supervision of the selected building contractor.

Sources of Funds for large scale irrigation schemes: World Bank; IMF; AfDB; EU; JICA etc, due to high capital investment cost and long repayment period.

For the realisation of small and medium size scale irrigation schemes, sometimes members of SACCOS and Farmers Associations use own funds and own labour efforts to develop their own irrigation potential. Other funding agencies are: Government of Tanzania (GOT); SAGCOT; Donor Agencies, etc.

Individual agri-business entrepreneurs / farmer groups may seek financial assistance for agricultural production in irrigation areas for:

  • The Crop Production in Irrigation Area (seeds, fertilizer, agro-chemicals, sprayers; funds for planting/labour cost).
  • A Limited Amount of Irrigation Equipment (pumps and pipes).
  • Purchase of Tractors, Seed Planting- and Harvesting Machines and possible Means of Transport of the Harvest.
  • Storage facilities, Post-harvest Equipment, Grading and Packaging Equipment and Materials.

 

7. How PASS can help farmers with small scale Irrigation or individual Enterprise pump Irrigation

  • Through feasibility studies and business plans PASS can assist entrepreneur’s access to bank loans (financial linkages).
  • Capacity building of farmers groups and entrepreneur management skills, especially in irrigation areas.
  • Training on yield increase and post harvest technology for rice and other crops grown in irrigated areas.
  • Training in agro-processing: rice milling and processing of other commodities.
  • Train entrepreneurs/farmers groups in operation and maintenance of farm mechanisation tools and equipmentAssist with market research and market linkages.
  • Support farmers with inadequate amount of collateral / security for a commercial bank loan.

1. Background

  • Coffee is the main cash crop of Tanzania averaging 50,000 metric tons and earning about USD 75 million.
  • Tanzania is endowed with more than 4 million hectares of high altitude potential for the production of potential Arabica coffee that commands high prices on the world market.and some medium altitude potential areas for Robusta coffee (Kagera) .
  • Coffee production is concentrated in five main geographic areas of Tanzania, in the North (Kilimanjaro, Arusha & Tarime, Manyara), in the West (Kigoma & Kagera) and South (Mbeya, Iringa and Ruvuma).
  • More than 450,000 farm families (95%) and 110 estates (5%) derive their livelihood from growing coffee . The coffee industry employs an estimated 2,000,000 people
  • The total area under coffee is estimated 265,000 hectares for both Arabica and Robusta.
  • Coffee accounts for about 20% of Tanzania’s foreign exchange earnings and has been the mainstay of the country’s agriculture-based economy for a long time.
  • Robusta is grown between 500-1000 masl and Arabica is grown at 1,000-2,500 masl
  • Average production between 2004/05 – 2010/11 is 50,000 tons of clean coffee. In 2011 Tanzania produced 56,790 tons of clean coffee. (see table below).

                  Coffee Production Trends For Seven Years

Years 2005 2006 2007 2008 2009 2010 2011
Production (MT)  57786 36434 55017 44745 68934 35668 56790 
  • Internal consumption has been increasing from 2% of total production in 2003 to 7% of total production in 2010.
  • In Tanzania 98% of the Arabica coffee is wet processed.
  • There are three types of coffee markets-
  • Internal Market – where farmers sale at farm gate price to private coffee buyers, farmer groups and cooperative. Coffee is sold in form of cherry or parchment.
  • Auction – Coffee auctions are conducted every week on Thursdays during the season (usually 9 months). Licenced exporters come to the auction and buy coffee from suppliers who can be individual farmer, groups, and cooperative or from private buyers.
  • Direct Export. Growers of premium top grade coffees are allowed to bypass the auction and sale their coffee directly. Direct export enables growers to establish long term relationship with roasters and international traders.

2. Potential for Investment in Coffee Industry

Potential for Improvement in Coffee Production

  • Expanding the existing area under coffee by opening new land for coffee planting, possible making use of mechanization for land clearing and adding high value farm inputs (fertilizers, agro-chemicals and sprayers).
  • Intensification of coffee production. Yield increase can be achieved by making use of advanced types of planting materials (‘clonal coffee’), improved agronomic practices, apply adequate amount and type of farms inputs and making use of appropriate extension services.
  • As a new venture, farmers should be encouraged to establish organic coffee plantations in high potential areas to meet growing global demands for organic coffee.
  • Improvement in management of coffee estates to enhance efficiency of operations and cost effectivity to keep the sector competitive at world market.
  • An investment in irrigation would assist in further yield increase and prevent negative effect from drought stress on the coffee trees in the dry season.
  • Potential for Improvement in Coffee Processing.
  • Improve and maintain rural road infrastructure to collect coffee beans/ bags in the most rational way
  • Establishing “central” pulperies / processing plants in key producing areas districts/regions for the purpose of quality control.
  • Improve in management of coffee processing plants to enhance efficiency of operations and cost effectivity to keep the sector competitive at world market.
  • A wide chance of investment is available in the processing of coffee (primary wet and dry processing), since a lot of coffee is still exported as raw beans creating an open room for better prices and higher returns when processed well.
  • Establishing coffee processing plants for value added “brands” such as decaffeinated coffee for export into global niche markets.
  • Potential for Improvement in Coffee Marketing.
  • A large and secure market exists in Japan for Kilimanjaro coffee where currently 35% of TZ coffee export goes to. This market can be further developed and expanded on.
  • Another secure traditional market is in the countries of the European Union; in particular the United Kingdom, Germany and Sweden which take 25% of TZ coffee exports.
  • There is also a secure traditional market in the USA . This market is most interested for decaffeinated coffee and other branded coffee, which currently takes 15% of TZ coffee.
  • Another potential large export market is emerging in Russia. This market can be further developed by TZ entrepreneurs.
  • There is also large and growing domestic market for coffee especially in urban areas due to affordability, change in taste and increase in population and also in tourist hotels.

 

     High Potential Areas for Investment in the Coffee Industry

Region Size of the potential Available infrastructure

Northern zone

(Kilimanjaro, Arusha,
Manyara)
Tanga

Produce world’s finest coffee with average production of about75, 000 to 10,000 tons per year.

They are located within easy access to the international airport at KIA and have suitable red volcanic soils and an ideal climate for production of specialty coffee. There is access to deep see port at Tanga; railway networks leading to deep-sea port at Mombasa; easy access to Moshi Coffee Auction Center; within close proximity to the Tanzania Coffee Board in Moshi.

 

Southern Highlands
(Mbinga, Ruvuma)

Mbeya

Produce 10, 000 tons of mild Arabica coffee annually


Produce 12000 to 15000 tons of mild coffee annually.

They are located within close proximity to potential export routes to
the Southern African countries. The express services of TAZARA
railway lead to exit port at Dar-es-salaam and Dar/ Tunduma Highway
provide additional reach to export markets within sub region. There
are large areas of virgin lands suitable for coffee production.

 

Kagera


Kigoma


Mara(Tarime)

Produce 21000 tons of Robusta annually


Produce 1000 tons annually


Produce 1000 tons annually.

They are located within reach to railway and shipping networks to
export routes either at Kigoma or at Dar-es-Salaam.

 

SWOT ANALYSIS FOR TANZANIA COFFEE INDUSTRY

STRENGTHS
  • Plenty of suitable land for coffee production andexpansion
  • Favorable growing conditions
  • Opportunity to further improve coffee quality
  • Availability of improved coffee varieties resistant to CBD, CLR and CWD
  • Liberalized coffee market
  • Willingness of stakeholders to support and fund coffee research
  • Political stability

WEAKNESS

  • Low productivity
  • Inadequate extension and advisory services
  • Inadequate credit and supply systems
  • Unstable local currency
  • Poor infrastructure
  • Inadequate dissemination of market information
  • Business environment to coffee is not conducive
OPPORTUNITIES
  • Tanzania is in Colombian mild group
  • Potential to gain premium prices
  • Coffee is traded in USD
  • Stakeholders to fund other shared functions in the industry
  • Potential to develop washed Robusta
  • Potential to increase local consumption

THREATS

  • Weather fluctuations
  • Increasing costs of inputs
  • Outbreak of new pests and diseases
  • Fluctuations of world coffee market prices
  • Emergence of additional certification standards
  • Competition with other crops
  • High interest rates

 

3. Financial Needs for the Coffee Sector

Entrepreneurs / farmer groups may seek financial assistance for:

  • The production of coffee seedling (including labor costs).
  • The purchase farm inputs (fertilizer, agro-chemicals, sprayers).
  • The modernization and or expansion of coffee processing plants.
  • Purchase transport and equipment.
  • Storage Facilities, Post-harvest Equipment.
  • Installation or expansion of irrigation systems and/or equipment.

 

4.  How can pass help farmers in the coffee Sector

Intensification of coffee production / improved processing & marketing:

  • Through feasibility studies and business plans PASS can assist entrepreneurs’ access to bank loans (financial linkages).
  • Organization and capacity building of coffee groups and farmer associations.
  • Training in entrepreneur / agri-business management skills in the coffee sector.
  • Assist with market research and market linkages in the coffee industry.
  • Support farmers with inadequate amount of collateral / security for a commercial bank loan.
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