cases from tanzania - Sustainet

Sustainable agriculture: A pathway out of poverty for East Africa’s rural poor
are to do so. They find themselves in an unfavourable and largely uninfluential position in
the world trading system (Allen and Thompson, 1997; Stiglitz, 2003).
Larger-scale farmers in developing countries can overcome these problems to some extent,
and thriving industries have been built up to export products such as cut flowers and fresh
vegetables. But small-scale farmers have severe problems getting access to distant and international
markets.
Imports of food, particularly wheat and rice, have put considerable burden on the economies
of sub-Saharan African countries that heavily depend on these foods. The exporting
countries often heavily subsidize production of these crops, so they are cheaper than locally
produced foodstuffs in the importing countries. Low commodity prices in the local market
mean local producers cannot compete.
Trade liberalization has aimed to increase and diversify exports and ensure quality and value
added through processing. However, Kenya and Tanzania (and sub-Saharan Africa in general)
have not benefited from such liberalization. Kenya has diversified tremendously towards
flowers, vegetables and fruits, but the volume and value of exports have declined drastically
since 1999. On the other hand, Tanzania’s trade has flourished since the end of the socialism
in 1985. However, traditional export markets still constitute over 50% of export revenue,
and primary exports comprise 84% of all goods exported, while high technology aacounts
for only 15% of all manufactured exports.
One of the most serious problems of Kenya and Tanzania is the continuous decline in the
terms of trade of their exports. Prices of primary goods such as coffee, sugar, cotton and
cacao are declining in the world market due to increasing market supply and substitution
(e.g., synthetic fabrics replacing cotton). The expansion of high-quality, premium-price fruit,
vegetables and cut flowers for the export market by Kenya is encouraging. Producers in
Tanzania have continued to expand their output of traditional exports, but find it difficult
to diversify their crops because of inadequate distribution channels. Consequently, many
Tanzanian smallholders have suffered losses in recent years due to the collapse in coffee
and cotton prices. On the other hand, prices of imported industrial products and fuel are
increasing.
The cumulative effect of such price movements is falling terms of trade, a declining trade
balance, and rising poverty. In such circumstances, a free market policy favours developed
economies.
Because their food production fails to meet domestic demand, Kenya and Tanzania are forced
to import food and accept food aid when recurrent natural disasters strike a substantial part
of their population. In 2002, Kenya imported three times as much food (cereals and vegetable
oils) as in 1985; for Tanzania, food imports doubled over the same period. In the severe
drought of 2000, staple crop production was well below average in the northern and central
regions of Kenya: maize production, for example, was 69% below expected.
A comprehensive strategy to enable countries such as Kenya and Tanzania to integrate in
the international markets is vital to pull their people out of poverty. Improving trade laws
and strengthening the capacity of such countries to negotiate would enhance their ability to
profit from market liberalization (Ndulu, et al. 1998).
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