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AGRICULTURE-TANZANIA: Higher Crop Prices Bring Farmers No Joy

Sarah McGregor

ARUSHA, Jul 7 2008 (IPS) - The six-foot tall corn stalks on Kastul Baha's homestead are the envy of his pastoral village in northern Tanzania. Baha was one of the fortunate farmers this crop season with $35 to buy a package of fertilizer to apply over his half-hectare field. He expects to more than double output to 10 bags of corn compared to four bags last year.

Even so, his expenses – inputs, fuel and farming taxes – really add up. Baha says he'll be lucky to feed his family and sell a small surplus at the local marketplace to break even.

"There is no way we farmers are able to make a living," Baha said, taking a breather from his second job as a doctor at a health clinic in Ayalabe village, about 100 kilometers outside Serengeti National Park. "Here, we're staying poor because there are bad agricultural policies and no budget help for farmers."

The global commodity price boom isn't bringing immediate benefit to the east African nation's majority of small-scale farmers. To the contrary, Tanzanians are likely facing more burdens as the country's import bill rises and pushes up the price of basic food items and producer costs, according to the Common Fund for Commodities (CFC), a United Nations agency based in the Netherlands. The CFC works with developing countries to strengthen production and trade of commodities.

Tanzania, Africa's fourth biggest coffee producer – and an exporter of tobacco, cotton, cashew nuts, tea, sisal and cloves – may derive higher export revenues, says the CFC. However, economic gain for Tanzanian farmers will likely be curtailed by the rising cost of crop production and transport to bring the goods to market, Andrey Kuleshov, a project manager for CFC, wrote in response to questions emailed from IPS.

"Even for the countries which positively benefit, the gains from booming commodities are just not enough to cover the costs of adjustment," said Kuleshov. "In the short term, I'm afraid that that Tanzania will have to face extra macro-economic hardship."

Agriculture accounts for about 85 percent of the nation's exports and about 30 percent of the country's gross domestic product, according to a National Dialogue on Economic Empowerment in Tanzania report released in May. Up to 80 percent Tanzania's 38 million people depend on farming whether it's to put food on their table or their main source of livelihood, the report added.

Farming in Tanzania is labor-intensive and low-tech in rural communities where large tracts of land are cultivated with hoes or bare hands.

Hard work for limited gain

Women carrying pangas, a bladed African tool, crouch between the coffee trees at the 175 hectare Karatu Coffee Estate in northern Tanzania and pluck beans from the branches.

Rising expenses for farm machinery and spare parts, local and central government levies and a mandatory minimum salary hike this year has led to a squeeze on margins, said general manager Starson Mootera. Even this farm, one of the region's largest, can barely afford to spend more on the agriculture inputs needed to produce relatively high yields, he said.

"That means our productivity is not improving, and that means no chance of higher sales and higher profits," he said.

Down the road, Aziz Yusuf, a manager on the Tinga Tinga Coffee Estate, added, "Our costs to produce are going up. But if the selling price is better in the world we only hear about it. I guess it's being lost somewhere in the middle."

Agriculture experts say the government must take responsibility and improve policies aimed at helping its millions of farmers. Better access to cheap loans for growers and subsidies for farming inputs could help, according to the Dar es Salaam-based Agriculture Council of Tanzania, a lobby group of crop producers, livestock keepers, processors and researchers.

The council also called on the government to honor a promise made by African leaders to dedicate 10 percent of their national budgets to agriculture by 2010. Tanzania approved 6.4 percent for spending on agriculture in the current budget year ending June 30, 2009.

The government should also lower taxes and levies on farmers to boost incomes in rural communities, Abdallah Kigoda, chairman of the parliamentary finance and economy committee, said last month in parliament.

For example, local Tanzanian authorities charge farmers a tax rate 17 times higher than what an industrial producer pays, according to the Agriculture Council of Tanzania.

Baha, for one, wants the government to expand its subsidy program for fertilizers ahead of the next crop season so he can further boost his yield.

"I can't rely on the weather and the price is the market is unstable," he said. "So I should be able to at least depend on my own government for a little help."