An Action Plan for Developing Agricultural Input Markets in Tanzania

guaranteed to receive full payment from an authorized
bank, which gets its funds from the implementing
agency (government or donor or NGO). IFDC has
implemented such programs successfully in Afghanistan
and Malawi. In Tanzania, some agencies, such as
the coffee and cashew boards, have used vouchers for
inputs. However, as monitoring mechanisms were not
well designed and executed for coffee vouchers, the
program suffered from fraud and misuse. Better monitoring
mechanisms should be designed to minimize
misuse and fraud. Therefore, it is recommended that
the GOT, donors, and NGOs should marketize their
input support programs through the use of vouchers.
The voucher system kills two birds with one
stone—it empowers the food-insecure farmers to produce
more food for the family, facilitates their “inclusion”
in the marketplace, and also strengthens the market
development process by injecting additional
purchasing power in the system. There are different
variations of the voucher system that could be adapted
to local conditions depending on whether the farmers
deserve full or partial subsidy or seasonal credit to buy
inputs and repay it in kind or cash at harvesting or contribute
labor to public work programs in exchange of
vouchers.
8. Technology Transfer Efforts
Research capacity for the production of improved
seeds should be strengthened. The production of
breeder seed for various crops should be promoted, and
proper rules and regulations should be established about
pricing and exclusivity of breeder seed when it is given
to private seed companies. Private seed companies
should work with research institutes in developing and
propagating new varieties and harnessing synergies.
The enactment and implementation of the Plant Variety
Protection Legislation is critical in attracting the
private sector investment in research and variety
development.
As mentioned earlier, farmers are using fertilizers
in an inefficient manner. Very few farmers use basal
fertilizers and some use NPK fertilizer products for
topdressing. To educate farmers about the proper use
of fertilizers and management practices, farm level
demonstrations about use practices should be organized.
Field days and 1-day training programs for farmers,
dealers, and extension workers should be organized.
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Soil testing facilities should be provided to fine tune
fertilizer recommendations. In this context, soil testing
laboratories and soil testing facilities proposed under
PADEP should be used to improve fertilizer
recommendations.
To improve crop yields while minimizing the cost
of fertilizers for smallholders, MAFS should consider
encouraging crop diversification through legume-cereal
rotations and other crops. The main advantage of
such rotations is that legumes can fix their nitrogen
(N) requirements from the atmosphere so farmers do
not have to spend money on N fertilizers. Moreover, a
legume crop can leave N in the soils and the recycle of
N-rich crop residue from legumes can reduce N requirements
for the follow-up maize crop. Thus, not only the
money spent on N fertilizers is reduced, but also the
legume crop like groundnut or soybean can become a
source of cash income for the poor farmer. The promotion
of higher analysis fertilizer products, such as DAP
(diammonium phosphate containing 18% N and 46%
P2O5) can further reduce fertilizer cost.
9. Development of Crop Output Markets
Dependable crop markets are imperative both to
sustain and stimulate improvements in AIMs. Improvements
in the performance of AIMS lead to the adoption
of modern technologies resulting in increased productivity
and marketable surpluses. Farmers need
access to reliable output markets in order to sell this
additional output and recover their investments, thus
sustaining their incentive to use these improved technologies.
The existence of stable and reliable output
markets can also provide the incentive for farmers to
increase the use of productivity-enhancing technologies
in order to benefit from assured returns from the
sale of their marketable output.
While the markets for export crops are well integrated
and catered to, the markets for food crops are
still poorly developed and fragmented. As a result, farmers
do not get a good price and especially at harvest
time, prices collapse. Such low prices make food crop
production unattractive and unprofitable and reduce the
incentive to use modern inputs. The marketing of food
crops could be improved by promoting the development
of producer associations, dissemination of market
information, grading and standards for quality produce,
improved storage and agro-processing facilities,