An Action Plan for Developing Agricultural Input Markets in Tanzania

and warehouse collateral for facilitating the purchase
of grains at the harvest time. All these improvements
will go a long way in improving the prices received by
farmers. To safeguard against collusion among traders,
the MAFS should install an intelligence and monitoring
system and use anti-trust laws to prevent such
collusions. Through training and technical assistance,
producer associations should be encouraged to take a
lead in conducting training for farmers, maintaining
and disseminating market prices, installing and operating
agro-processing facilities, bargaining good prices
for inputs and outputs, and encouraging savings and
banking habits among farmers. Promoting cross-border
trade and trading among regional blocks like the
EAC and COMESA will further enhance opportunities
for exporting firms to trade products in which Tanzania
has a comparative advantage. Improving rural
roads and other infrastructures will contribute significantly
to the development of crop output markets.
10. Infrastructure Development—Strengthening of
Railway Capacity
The poor condition of feeder roads in rural areas
adds significantly to the transportation cost of supplying
inputs, especially fertilizers, in rural areas. Investment
in building and maintaining good roads in rural
areas should receive priority in the development budget.
As mentioned earlier, 9 USAID has devoted resources
for developing feeder roads in the Southern
Highlands. There is a need to develop feeder roads in
other parts of the country.
However, in the short to medium term, the government
should pay attention to strengthening the railway
capacity on its railway lines because over long distances,
railways are much cheaper than road transport.
From Dar, the railway line goes in both north/east and
south/west directions. However, on both routes the
availability of the “covered” wagons is a serious problem.
Transporting fertilizers or seed in an “uncovered
wagon” poses the risk of insecurity and losses by theft
and pilferage. Such risk discourages the dealers from
using railways for shipping inputs and forces them to
rely on costly road transport. The GOT and donors
should make an investment in improving the supply of
wagons and storage capacity at railway stations. Another
area that needs attention is the improvement of a
trucking fleet in the country. Non-availability of trucks
can add significantly to transportation costs.
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Action Plan Matrices for Fertilizer, Seed, and
CPP Markets
In addition to the market development efforts proposed
above, there are certain input specific measures
that should be implemented to strengthen the functioning
of input markets. Tables 2, 3, and 4 summarize such
measures for fertilizer, seed, and CPP markets,
respectively.
V. Institutional Arrangements
Holistic Approach
This action plan includes several measures to
strengthen the functioning of input markets in Tanzania.
These measures deal with the issues related to both
the demandside and supplyside of the market equation.
While it may not be possible to implement all of these
measures in a single project due to resource constraints,
it is essential that an optimum sequencing and phasing
scheme be developed so that the synergy resulting from
various measures could be realized. In this context,
while developing prioritization, special attention should
be paid to the measures dealing with policy reform,
human capital development, access to finance and market
information, and enforcement of regulatory frameworks.
These measures should be implemented in a
holistic manner because reforms in one area are directly
linked to reforms in another area, and their joint implementation
will create synergistic benefits (Figure 4).
Figure 4. The Market Development Process