An Action Plan for Developing Agricultural Input Markets in Tanzania

200 stakeholders from all domains—policymakers,
donors, non-governmental organizations (NGOs), private
sector, farmers, bankers, and others. In addition to
interacting with stakeholders in Dar es Salaam, the team
traveled to several regions including Arusha,
Kilimanjaro, Kigoma, Tabora, Morogoro, Iringa, and
Mbeya. The team also participated in a 1-day workshop
on Enhancement of Agricultural Development for
Sustainable Food Security and Poverty Reduction in
Tanzania organized by the MAFS on October 28, 2003.
Interactions with policymakers at this workshop helped
the team to focus on critical issues.
During the field visits, few stakeholders including
importers complained about input demand, especially
fertilizer demand. Many opined that adequate and
timely supply of fertilizers is a constraint to meet existing
effective demand of 120,000 to 180,000 tons.
With the exception of tea and tobacco growers who
use specialized NPK products, most farmers use standard
products like urea, AS, CAN, DAP, and TSP. Nevertheless,
during the last 10 years, the supply of these
products (traded globally) never exceeded the demand
at a given time in the season. In terms of marketing
terminology, the fertilizer market was never saturated.
Guided by this and other observations, the team paid
special attention to the issues related to input supply in
preparing this action plan. The team’s initial impressions
were discussed at a debriefing at MAFS and at a
meeting at USAID/Tanzania on November 17, 2003.
The draft action plan was prepared during December
2003-March 2004
On August 26, 2004, the MAFS organized a stakeholders’
workshop to validate the draft action plan (Annex
I). The workshop was attended by over 100 stakeholders
from both public and private sectors, NGOs,
and the donor community. After the opening session,
stakeholders were grouped into three working groups
(Seed, Fertilizer, and CPPs) to review the recommendations
included in the action plan. With minor modifications,
the workshop participants approved the action
plan. Comments received at the workshop are
reflected here.
The main goal of the action plan is to develop a set
of measures that will make AIMs function effectively
and efficiently so that farmers have easy access to inputs
and pay lower prices. The emphasis is laid on the
policy environment, human capital, access to finance
7
and market information, and enforcement of regulatory
systems. Issues related to technology transfer,
safety nets, and output market development are also
analyzed.
Outline of the Report
The next section provides an assessment of the
functioning and performance of AIMs in Tanzania with
a focus on constraints related to macropolicy, market
development, and technology transfer that affect the
performance of seed, fertilizer, and CPP markets. Section
III deals with the potential of the private sector in
supplying inputs efficiently and effectively. Measures
needed to strengthen the functioning of AIMs are elaborated
in Section IV and the institutional arrangements
necessary to implement the action plan are covered in
the last section.
II. An Assessment of
Agricultural Input Markets 3
Tanzania has made substantial progress in liberalizing
and deregulating its agricultural input markets
(AIMs). The role of crop marketing boards and other
state-owned entities in the marketing and distribution
of seed, fertilizers, and CPPs has been eliminated or
curtailed. It was anticipated that these policy reforms
would encourage the development of agricultural input
markets and increase agricultural intensification
particularly among smallholder farmers growing food
crops. Although there has been a marked increase in
the number of private firms involved in the marketing
of agricultural inputs, these emerging input markets
remain underdeveloped and fragmented and access to
inputs is a challenge for smallholder farmers.
Constraints Affecting the Performance of
Agricultural Input Markets
Constraints affecting the performance of AIMs
could be divided into three broad groups:
1. Macropolicy.
2. Market Development.
3. Technical.
3 Annexes II, III, and IV include the assessment of the fertilizer,
seed, and CPP markets, respectively.