BEING part of the routine, World Bank unveiled its Tanzania Economic Update, on December 3, 2019, which is the biannual series with an intention of stimulating debates and dialogues between stakeholders, this time with a focus on Agricultural Transformation.
The Bank’s report paints a rather bright picture on economic growth by indicating that it grew at 5.6 per cent, slightly higher than last year’s 5.4 per cent. All thanks to exports recovery, sound balance of payments and contained inflation.
Although this marks too low compared to National Bureau of Statics’(NBS) state of the economy reports, reasons for improvement from both reports sounds to be more similar than not. The Good Contrary to many pundits’ expectations, an update generally came with optimism on the entire sector.
This largely emanates from its performance and geographical position that Tanzania has been naturally endowed with. It has echoed NBS’s data on the growth in agricultural GDP as to have hopped from an average of 3.5 per cent between 2006 and 2016 to5.1 per cent in the first half of the year 2019.
This achievement can rightfully be motivational performance especially when you are aware that it is not so far from the 6 per cent threshold necessary to reduce poverty in the country which is currently trotting at around 27 per cent. Again, the report has unearthed a rarely talked cluster of farmers in the country.
The medium – scale farmers. These are relatively advanced farm managers who work on 5 to 20 hectares of land, with greater application of purchased inputs and mechanisation, use of hired labour, more income per farm and agronomic technicality.
According to the Bank’s researcher, they have gotten a huge spill over effect to the neighbouring non – commercial farmers by inducing with them on the new practice needed by the market. And the report puts it more expressly that, “smallholders near medium – scale farms are more productive and earn more than they had previously”.
Although this class’s composition is currently one-third of Tanzanian farms, it appears not to contribute to urbanisation agenda as two – thirds of them comes from the same localities. However, an increase of this new class poses a question of where did the displaced smallholders went?
Albeit, it can be presumed that since the new form of ownership is labour intensive, the small farmers might have turned in to the new farm workers or embarked on a non – farm economy roles like transport and agro– processing.
The report seems to advocate for removal of no longer existing tax law on export of raw agricultural products; notwithstanding, it appears that there searchers were not updated on this development.
After Tanzania Pulses Network (TPN) and other interested partner organisations started advocacy on this, the matter was presented to the Parliamentary Budget and Finance Committee before it was eventually scrapped by the Minister for Finance and Planning on June, 2019.
Generally, Tanzania appeared to have scored better on Enabling Business in Agribusiness (EBA), another report produced by The Bretton Woods Institution.
And as per the EBA report disclosed by The Bank on October, 2019; scored 57 per cent, insisting, “Among the low – income countries, Liberia has the least favourable regulatory environment for farmers, while Tanzania has the most favourable.”
The Bad Despite growth in the real value of aggregate agricultural production, by over 8 per cent annually, coupled by increased rural household population increment by 4 per cent, the report gives shocking revelation that income derived from on – farm production has experienced a ten per cent fall, from 47 to 37 per cent.
It appears that the ghost behind this ‘free fall’ is the market. A deeper diagnosis is needed to establish this, or else the sector might be deserted by profit motivated farmers. Above all, a meaningful economic growth is the one that is inclusive, now if agriculture does not play its part in positively affecting the majority in the sector who else can do?
The Ugly Tanzania agricultural productivity is low, at least according to the report. We are still producing 0.4 tons per hectare, way below the world average. The reason behind this is clear, our fertiliser utilisation is poor.
It states that the average fertilizer application is 8 – 10 kg/ha far below 50 kg/ha target set by African governments at the 2006 Abuja Declaration on Fertiliser.
Well, it is at this juncture that I get confused with The Bank’s suggestion that public spending on agriculture needs to shift from providing significant private goods (the likes of fertilisers) to individual farms or firms, to providing core public goods that mobilize corresponding private investment and in agricultural production and distribution.
While I appreciate that finally a call to improve distribution structure has got a worth campaigner, but alas, how do you plan to sell something you are not sure of its availability?
The maiden opinion should instead be an improvement of subsidies allocation, which is exactly an antidote to low productivity problem. In a nutshell, the report managed to highlight salient matters in our economy, and the reflection on the sector, displays a great transformation worthy watching with hope.
