An Action Plan for Developing Agricultural Input Markets in Tanzania

or risky to buy goods fully on credit. Therefore, dealers
prefer to pay 30%-50% of what they owe upfront
in cash. Their main sources of cash are savings and
borrowing from the banks using immobile collateral
(houses, land). However, dealers find that the lending
terms are unattractive given relatively low returns from
the CPP business. The outcome is that dealers have
limited finances to invest in the CPP business, which
limits the size of their orders (uneconomical sizes) and
their ability to invest in market development activities.
In addition to limited access to finance, the 20% VAT
on packaging and services adds to the cost of CPPs
and therefore constrains use at the farm level.
Weak Development of Dealer Networks Into
Rural Areas—CPP dealers are mostly concentrated in
the regional capitals and large towns; there are very
few dealers in the rural areas. This is primarily due to a
lack of financial resources to expand into the rural interior
and poor rural road infrastructure. The result is
that farmers have to travel an average of 35-50 km to
purchase CPPs. Consequently, the cost is higher (in
terms of transport and traveling time) which limits how
much farmers can afford to purchase.
Lack of Human Capital—CPP dealers have limited
business management (administrative and financial)
skills and technical knowledge about the products
they are selling.
Lack of Market Information—There is no central
body that is responsible for collecting data and disseminating
information about the CPP market. As a
result, data are scarce and what is available is not reliable.
The 2003 data presented in this report are based
on estimates made by stakeholders. The only consistent
and systematic import data is from COTECNA,
but this data set only includes product entering the country
via formal channels, and it does not include CPPs
that enter across land borders. There is no comprehensive
data set on CPP use nationally, by type of product,
by crop, by district, by type of farmers, and there is no
time series data on imports, consumption, availability,
and prices. The lack of readily available data makes it
difficult for the MAFS to plan ahead and avoid shortfalls
or oversupply, and for the private sector to plan
their marketing strategy to meet farmers’ needs and
maximize their returns. Lack of data also means farm-
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ers are unaware of the current market situation beyond
their immediate geographic area.
Cumbersome and Weakly Enforced Regulatory
Framework—At the importer level, the enforcement
of regulations plays more of a restrictive role than a
supportive one. Specifically:
• The lack of clarity in the CPP industry regarding
the inspection functions performed by COTECNA
and TPRI.
• The inadequate facilities and equipment at TPRI
which delay the release of new products.
• The requirement of three cropping cycles for new
product registration discourages importers from introducing
new, cheaper products to the market.
• The expensive registration fees discourage manufacturers
from introducing new, more suitable products
to the market. This is particularly relevant to
generics since their price may be too low relative to
the cost of registration.
• The delays in the release of the letter of authorization
from TPRI for clearance of consignments from
the port (it can take as long as 4-5 days). This makes
it necessary for the importer to unload the material,
store it in a warehouse at or near the port or border,
and then reload after clearance. This increases costs
and reduces timeliness of availability.
The emphasis at the distribution level is on training
and education. There is minimal inspection of shop
premises and personnel and poor enforcement of truthin-labeling.
As a result, shop premises are not equipped
to deal with accidents and it is not uncommon to find
CPPs displayed next to veterinary products and seed.
Moreover, many dealers still lack the requisite training
to handle and sell CPPs and in many cases TPRI trains
the owners of the establishments who are not the actual
sellers of the products. There is also uncontrolled
distribution of repackaged products, which leaves room
for illegal activities such as incorrect labeling (e.g.,
renaming of the original pesticide or using the name of
the active ingredient as the brand name) and unsafe
packaging by workers who are not trained or protected.
There is also no control of quantity and quality once a
product has been repackaged which increases the risk
of adulteration.