An Action Plan for Developing Agricultural Input Markets in Tanzania

An Action Plan for Developing Agricultural Input
Markets in Tanzania
I. Introduction
Tanzania is a naturally rich but economically lowincome
country with a per capita income of $277 in
contrast to sub-Saharan Africa’s $450/person. The incidence
of poverty and hunger is high. The PRSP (Poverty
Reduction Strategy Paper) estimated that 48% of
the Tanzanian population lived below the poverty line
(earning less than $0.65/day) in 2000. In rural areas
the incidence of poverty was more than 57%, and in
some districts it exceeded 75%. Likewise, incidence
of hunger and malnutrition was more than 40%, with
an average daily calorie intake of less than 2,000 calories/person.
Because most of the poor and malnourished
people live in rural areas where agriculture is the
main source of livelihood, accelerated growth in agricultural
output is essential to reduce poverty and eliminate
hunger and malnutrition.
The agricultural sector is a dominant sector of the
Tanzanian economy. It accounts for 45% of the gross
Figure 1. Cereal Production Per Capita, Tanzania, 1980–2002
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domestic product (GDP), more than 80% of rural employment,
and 60% of export earnings. Food crops
dominate crop production in Tanzania, accounting for
more than 55% of agricultural production. The main
food crops are cereals, especially maize, followed by
rice, sorghum, and millet. Among cash crops, cotton,
coffee, tobacco, tea, and cashews are important.
The Government of Tanzania (GOT) has implemented
bold initiatives in liberalizing agricultural input
and output markets. There are no price controls,
subsidies, or state regulation of marketing activities.
Nevertheless, food production is not keeping pace with
population growth. Cereal production has shown little
growth since the mid-1990s. From 1997 to 2002, the
annual average cereal production was 4 million tons.
Similarly, cereal yields have been stagnant at an average
of 1.3 tons/ha in the 1990s and per capita cereal
production has been decreasing (Figure 1).