An Action Plan for Developing Agricultural Input Markets in Tanzania

For example, if policy distortions are removed, but
human capital is not developed in rural areas, then these
reforms may not create the desired impact. Likewise,
if human capital is developed, but trained people do
not have access to finance and information, then they
cannot use their skills to develop retail networks. If all
these measures are implemented, but the government
is not effectively enforcing quality control and regulatory
measures, then many honest, hardworking entrepreneurs,
(especially women) will be discouraged in
making the necessary investment in business development.
Because these factors are related in an interactive
manner, their holistic implementation is desirable.
Public-Private Partnership
The experience of the last three decades indicates
that sustainable input supply systems cannot be developed
either by the private sector or by the public sector
alone. Both sectors have a role in creating well-functioning
input markets and should work jointly in removing
market development related constraints. The
public sector should shoulder the responsibility of creating
an enabling environment, enforcing regulatory
frameworks, and disseminating market information to
create a level playing field. At the same time, the private
sector should assume the responsibility of importing
and marketing quality inputs. There are several areas
where the public and private sectors can work
jointly. For example, many trained dealers can assume
the responsibility of providing extension advice to farmers.
The MAFS can focus its limited resources on subject
matter specialists and organize joint training programs
for dealers to empower them about new
technologies and knowledge. By sharing risks in improving
access to finance, both sectors can work together
to improve input supply in the country. Likewise,
in maintaining and disseminating market
information, public and private sectors can work together.
Public and private sectors can produce more
benefits by working collaboratively rather than by
working in isolation or at cross purposes in a hostile
environment. In this context, both sectors should work
hard to overcome the mindset problem mentioned earlier
and learn to trust each other for a broader social
goal of ensuring food security and reducing hunger and
poverty in the country.
Implementation Arrangements
Through ASDS, ASDP, PADEP, and other programs,
the GOT has recognized the need to strengthen
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the functioning of input and output markets for the agricultural
sector. The ASDP Secretariat is responsible
for coordinating projects in the agricultural sector. Any
project designed to implement this action plan should
be well integrated in the ASDP system. However, given
the mindset problem and to solicit maximum cooperation
of the private sector, the AIMs Development
Project should be implemented by an autonomous
project entity. To improve coordination between the
project and the ASDP Secretariat, various departments
of MAFS, and other relevant ministries (e.g., the Ministry
of Marketing and Cooperatives) and to reflect the
concerns of the GOT in project implementation, the
MAFS/ASDP should appoint a liaison officer and create
a small project advisory committee. This committee
would consist of policymakers, donors, private sector
dealers, and other relevant stakeholders. In selecting
the districts for market development activities, special
attention should be paid to those districts where synergy
from other ongoing projects (PADEP, SG 2000,
USAID, and others) could be realized.
Linkages
Actions proposed in this action plan will have
strong linkages with market development and technology
transfer activities implemented by the MAFS and
other ministries in collaboration with donors. Notable
among such programs are the projects funded by SG
2000, IFAD, The World Bank (PADEP), FAO, and
USAID. PADEP’s technology and infrastructure development
programs, matching grant, private sector development,
and soil testing facilities will complement
the proposed activities in the area of technology transfer
and market development. For example, the proposed
training for dealers could be integrated with PADEP’s
capacity building programs for the private sector development
and association building.
The proposed action plan will also contribute to
the achievement of USAID/Tanzania’s Strategic Objective
(SO 5) of “Incomes increased in selected agricultural
commodity subsectors,” by promoting agricultural
growth through input market development and
strengthening the legal and regulatory environment for
agricultural inputs. Two Intermediate Results support
the achievement of SO 5: IR 9.1 “Increased Productivity
of Selected Agricultural Commodities,” and IR 9.2
“Increased Trade of Selected Agricultural Commodities.”
Although the SO 5 recognizes the important role
to be played by agribusiness and trader associations,