Tz Agri Report

8/13/2019 Tz Agri Report

1/27

Chapter 9: Non Traditional Commodities Horticulture

9. Introduction

This Chapter assesses the implications of ongoing reforms on the production and trade of non

traditional export crops with the focus on the important horticultural crops (flowers, vegetables,spices, fruits and medicinal plants); with the view of recommending actions needed by industry and

government to increase the competitiveness and brighten the prospects of these commodities incontributing to the economy of Tanzania. On the basis of this objective, the Chapter has beenorganized into five sections. The first highlights the importance and evolution of the non traditional

crops in the African and Tanzanian contexts. This is followed by a review of the current status of thehorticulture sub-sector in Tanzania with specific focus on production and productivity of varioushorticultural commodities as well as how the sub-sector features in the various policy reforms setting.

The third section dwells on the place of horticulture in the socio-economy, tradability of horticulturalcommodities and investment opportunities in horticulture to justify the sub-sectors prospects in thenational economy. Key constraints and emerging challenges in the horticulture sub-sector and efforts

that have been and are being taken to address such impediments and challenges are evaluated in theforth section, while the last section provides recommends the way forward for an industrious

horticulture sub-sector in Tanzania.

9.1 The Non Traditional Crops Sector

The export economy of the crop sub sector in most African countries is at present comprised of the

non traditional and traditional export crops. Crops that are not part of the customary diet of the localpopulation and grown primarily for their high cash values and export potentials are categorized as

nontraditional[1]

. Crops falling under this category are mainly horticultural ones (fruits, vegetables,spices and flowers), oilseeds, legumes and medicinal plants. The traditional export crops on the otherhand, are the ones that for a long time have been the main source of foreign exchange earnings

contributing up to 60 percent of total export volume (Bank of Tanzania, 1999). However, from late1980s Tanzania experienced tremendous problem for almost all traditional agricultural export crops,as world market prices declined causing a substantial drop in the contribution of export earnings by

the agricultural sector from 50 percent in the mid 1990 to a mere 23 percent in year 2002 (Mlula, A.2003). The strategies advocated by the Government in view of mitigating this dilemma involve thediversification of agriculture through inclusion of other non farm activities and promoting theproduction of non traditional crops for export markets. However, because the non farm activities are

small in scale and often taken as a coping strategy, diversification of agriculture into non farmactivities has not been successful in addressing problems in the agricultural sector, as it requiresefforts to impart organizational and entrepreneurial skills to rural people so as to make the non farm

activities viable sources of livelihoods (URT, 2005). Therefore the promotion of non traditional cropsproduction remains the only practical and viable option not only for enhancing the countrys foreignexchange earnings but also for enhancing the fight against rural poverty.

The recent years have witnessed many African countries going into the production of non traditional

crops in order to diversify their agricultural exports and increase hard currency earning. This isbecause the market for non traditional crops is reported to be very profitable especially Europe and itis an area that attracts investment. Africa is endowed with a tropical climate that is ideal for growingmost of these crops throughout the year while most developed countries fall in the temperate climate

zone where cropping season is limited to the summer months. Increase in consumer demand in thedeveloped countries for out of the season fresh fruits and vegetables has opened a niche for Africancountries to produce these crops for export during the void period at attractive prices. Basing onremarkable success by countries that have ventured in the production and export of non traditional


2/27

crops, most developing countries have formulated or are in the process of formulating the programmesfor non traditional export crops development.

As can be noted in the annex (Annex 1), during the period from 2002 to 2006, non traditional productsaccounted for an average of US$1,036.24 million. The data in annex 1 shows that during the period,

non traditional agricultural products (horticultural products and other exports including fruits and

grains) accounted for an average of 10.8 percent of the total export value and 14.2 percent of the totalexport value of non traditional products. The export value of horticultural products alone (excludingfruits), accounted for about 1.1 percent of the total exports value and an average of 1.4 percent the non

traditional products export value. The implication of this is that the export value of non traditionalproducts in Tanzania was dominated by non agricultural products especially minerals, fish and fishproducts as well as other exports. However, the exportation of non traditional agricultural products

looks insignificant mainly because much of it is carried out as an informal cross-border trade.

Horticultural crop production has always been part of the general agricultural endowments in

Tanzania although commercial production (especially for export) is thought to have been started in the1970s. Horticulture crops production normally generates higher earnings per unit area and is often analternative to farmers with small acreage to get adequate income. Horticulture is a fast growing non

traditional crops sub-sector in Tanzania, producing different varieties of fruits, vegetables, flowers andother ornamental plants, spices and herbs crops for domestic and export market. According to theDiagnostic Trade Integration study report (DTIS, 2005), horticultural exports to Europe and other

regional markets like Kenya are on the increase.[2]

The country has a large potential for the production of tropical, subtropical and temperate fruits,

flowers, vegetables and herbs for domestic and export market which is not fully exploited. Potentialareas for horticultural crops production are found mainly on the Highland and Coastal belt of thecountry which include; Southern highland areas (Mbeya and Iringa regions), Northern highlands

(Kilimanjaro and Arusha), Coastal belts regions (Tanga, Morogoro, Coast region, Dar-Es-Salaam )and Central regions (Dodoma) and Lake zone regions (Mwanza, Mara, Kagera).

The crops produced include; Tropical fruits such as pawpaws, mangoes, pineapples, bananas, guava,

grapes, mbilimbi, and indigenous fruits such as tamarind, baobab, etc; Temperate fruits such aspeaches, pears, apples, strawberries, raspberry, apricots plums, etc; Exotic vegetables such as tomatoonion, leeks, shallots, chives, sweet pepper, cabbages, chinese cabbages, lettuce, cauliflower, peas,

carrots, cucumber, water melon, string-less beans, peas, mushrooms etc. Indigenous/tropicalvegetables such as cherry tomato, eggplants, african eggplants, okra, collards/mustards, green leafyvegetables such as amaranths, nightshades, pumpkin leaves, sweet potato leaves, cassava leaves, and

other wild varieties such as wild mushrooms, milk weed etc. not yet domesticated; Spice and herbcrops such as cinnamon, cloves, cardamom, turmeric, ginger, vanilla, paprika, chilies, coriander,parsley, celery, black pepper, garlic, mints lemon grass, nutmeg, rosella , aloevera etc; Flowers and

other ornamental plants such as cut flower roses, carnations and chrysanthemums, geraniums, astersand different types of shrubs, potted plants and leafy ornamentals.

Production of most horticultural crops is practiced by small scale farmers except for a few cropsespecially flowers such as cut flower roses, chrysanthemums, geraniums, asters, etc and someexportable vegetables such as green beans, peas, courgettes, baby corns, chilies, baby carrots, babyleeks etc. which are produced by large scale farmers and companies for export.

Various national research institutions for Horticulture are available in the country including KATRIN(Morogoro), ARI-Uyole (Mbeya), ARI Mlingano (Tanga), HORTI- Tengeru (Arusha) and ARI-

Maruku (Kagera). Other institutions include training institution like SUA and the AVRDC.


3/27

A few fruit and vegetable processing factories are available in the some key horticultural cropsproducing regions. These include DABAGA in Iringa region, RED GOLD in Arusha region,

NATURAL CHOICE in Tanga region (Lushoto district), CHEMI industries in Dar es Salaam regionand SNOW CAP in Kilimanjaro region.

9.1.1 Relevant Domestic Reforms

In 1982 Tanzania formulated its first agricultural policy that was designed to guide the country out ofthe sector performance slides experienced in the 1970s. This policy provided the guidelines with thepredicament of the Government continuing to play a central role in the commercial investments,

management and marketing of agricultural products, input supply and provision of services. However,because of the changes in the macro economic environment that ensued in the 1880s, the Governmentembarked on the implementation of the Public Sector Reform Program with the aims of disbanding

the centrally planned economy. The programme involved privatization/divestiture of publicenterprises while strengthening the government capacity to make policies and play effectiveregulatory role. In line with the Public Sector Reform Programme, the Ministry of Agriculture

formulated the new Agriculture and Livestock Policy in 1997 to re-orient its mission and redefine itspolicies, strategies and its core activities

[3]. The Government also developed other policies which have

a strong bearing on agricultural development in Tanzania including the Cooperative Policy, theNational Land Policy as well as the National Microfinance Policy.

The 1997 Agriculture and Livestock Policy objectives[4]

are geared to ensuring that the direction andpattern of development in the agricultural sector meets social objectives and outputs. The policy

emphasizes the importance of competitive markets and Government interventions in providing prioritypublic goods and services and the conservation of the environment as a rational basis for agriculturaldevelopment.

The 1997 Cooperative Development Policy on the other hand, acknowledges the role of cooperativesas economic empowerment tools of the vulnerable members of the society such as small

producers/farmers, women and youths, who otherwise cannot compete as individual players in themarket. It marks a change from cooperatives being state-controlled institutions to becomingautonomous and member-controlled private organizations. The policy provides the framework for therestructured cooperatives to operate on an independent, voluntary and economically viable basis and

to develop into centres for providing inputs, implements, technologies and information. Broadly, thepolicy aims at empowering farmers in view of enhancing their bargaining power in the market. The1997 was revised and a new Cooperative Development Policy formulated in 2002 which among

others; recognizes economic groups as important initiatives towards genuine member-basedcooperatives and puts emphqasis on commercially oriented business minded leadership instead ofcivil-service oriented management in running the cooperative movement.

The National Land Policy underscores the importance of land use planning as a tool for landdevelopment and a framework for formulating extension packages. The policy provides an advocacy

for community land use management as a key to addressing the problems of land degradation,equitable resource allocation and the resolution of conflicts between various land users

[5]. In a

nutshell, the policy seeks to achieve the following objectives:

promote and ensure a secure land tenure system; Ensure the optimal use of land resources; and


4/27

Facilitate broad based socio-economic development without endangering the ecologicalbalance of the environment.

The national microfinance policy which was issued in 2000 provides a basis for the evolution of anefficient and effective savings mobilization and micro-financing system in the country. The policy

recognizes the Savings and Credit Cooperative Societies (SACCOS) as the major providers of

microfinance services which, when fully developed will evolve into community banks that later willbe amalgamated to form Cooperative Banks (URT 1997). To-date the number of registered SACCOS

is said to have increased to 4, 000 from only 400 that existed prior to 2006.

Horticulture in the 1997 Agriculture and Livestock Policy contextThe Agriculture and Livestock Policy (1997) gives a highlight on important horticultural crops that

are commonly produced for the market and for which much promotional efforts need to be put in thenext decade. The policy mentions pineapples, passion fruits, citrus fruits, mangoes, peaches, pears anddesert bananas as important fruits; and tomatoes, spinach, cabbages and okra as important

vegetables. Flowers include tropical varieties e.g. tuberous roses and some temperate types e.g.carnations, Lisianthus and Chrysanthemums. Tropical flower crops worth researching on includedwarf heliconia, torch ginger, tulip ginger, and cigar calathea.

According to the policy, some of these crops can be produced throughout the year but the majority ahighly seasonal; a reason for the domestic market gluts during the season and severe scarcity during

off-season. The policy admits that growth in the Tanzania horticultural sector is challenged by anumber of factors including:

poor production organization (inadequate supply/unavailability of seeds, inputs, research and

extension services); poor marketing system resulting in quality deterioration and huge post harvest losses; inadequate storage, packaging technology and processing facilities which in turn creates

gluts and critical shortages of horticultural products during off season; poor roads, particularly feeder roads and lack of appropriate transportation logistics; and poor quality control system.

Although the external market opportunities for horticultural products in the neighbouring and overseas

countries like the Middle East and Europe have increased in recent years, the policy stresses on theneed of Tanzania to tackle these constraints and stringent demands on standards by the Europeancustomers so as to gain access to these markets. In other words, during this period Tanzania has to

compete with other world producers whose systems are much more efficient.

However the policy falls short of emphasizing development of traditional/indigenous fruits and

vegetables whose positive attributes in terms of adaptability to the environment, resistance to pestsand diseases, less inputs needs and high nutritive value put them on the higher side, despite theirrelatively low their yielding potential (URT 2002). Most of these crops are grown at homesteads forhousehold consumption and within city gardens for sale in the local market. Mchicha-amaranths,

kisamvu-cassava leaves, mnavu-nightshade, ngogwe-African egg-plant, mboga ya maboga-pumpkinleaves and matembele-sweet potato leaves; are some of the existing examples. They are cheapervegetables to produce, are widely consumed, and are higher in nutrients than exotic vegetables and

very important for food security. The policy also does not mention the development of mushroomproduction as a rich source of protein and high value vegetable crop for local and external markets.

The existing agricultural and livestock policy of 1997 is the current operating policy for the sector

although it is now in the review process. Formally the policy document of 1997 included both the


5/27

Livestock and Crop Sectors but the on going policy review is structured to cover separately the cropsector and livestock sector (already completed in 2006 and is operational)

Policy Implementation

a) Agricultural Sector Development Strategy

In broad terms, the above described policies are being implemented within the framework of theTanzania Development Vision 2025 and the National Strategy for Growth and Reduction of Poverty

(NSGRP). The Agricultural Sector Development Strategy (ASDS) which is currently beingimplemented through the Agricultural Sector Development Programme (ASDP), District AgriculturalDevelopment Plans (DADPs) was adopted in 2001. The strategy provides a basis for concerted efforts

by the public and private sectors to stimulate growth and reduce rural poverty through exploitation ofthe countrys comparative advantage in the production of major export, food and more lucrative nontraditional crops. The ASDS also seeks to exploit the countrys domestic and international tradingopportunities created through membership of regional and international trade groupings and protocols.

Creating the strategic partnership between agribusiness and smallholder farmers is another potentialopportunity that the strategy is set to exploit. Among others, the strategy addresses farmerorganization; provision of adequate investment incentives; review and harmonization of the sector

legislation, strengthening the public and private sector capacity to provide improved support services;and paying the attention to marketing of inputs in view of improving net farm returns in the short termand commercializing agriculture in the medium and long term as priority issues.

b) Agricultural Legislation

Important agricultural legislations with the bearing the promotion of non traditional crops in thecountry include the Plant Protection Act (PPA) of 1997, the Plant Breeders Rights Act (PBRA) of2001 and the Seed Act of 2003. Pursuant to the sectoral reforms aiming at strengthening the

Government regulatory, the PPA which was enacted in 1997 entrusted all plant protection regulatoryfunctions to the Government. The PPA therefore repealed the outdated 1937 Plant ProtectionOrdinance, 1937 Locust Ordinance and some parts of the 1979 Tropical Pesticide Research Institute(TPRI) Act. The PPA is the first comprehensive statute that contends that the maintenance of the

international reputation of Tanzanian imports and exports requires the exclusion or restraint ofharmful organisms from such produce. The Act therefore seeks to prevent the introduction and spreadof harmful organisms; to ensure sustainable plant and environmental protection; to control the

importation and use of plant protection substances, to regulate export and import of plants and plantproducts and ensure fulfillment of international commitments. Phytosanitary inspectorate servicesform a crutial component of the Act and are provided at all points of entry and exit including airports,

ports and border posts.

The implementation of the PPA is overseen by the National Plant Protection Advisory Committee

(NPPAC). The NPPAC members are drawn from public and private institutions dealing with plantprotection issues. The Committee is responsible for advising the Minister on all matters pertaining tothe implementation of the Act and its Secretary is the Chief Inspector who also heads the Plant HealthServices Section in the Ministry of Agriculture, Food Security and Cooperatives.


6/27

The PBRA was enacted in 2002 to provide for payment of royalty fees by commercial seed traders toplant breeders for the following reasons:-

[6]

To assist in providing sustainable compensation to plant breeders for their long time

involvement in developing and testing new varieties; To assist in controlling unauthorized multiplications of seeds of both public and private

varieties; To provide an incentive to local (public and private) and international breeders to involve

themselves fully in plant variety breeding in the country, therefore providing farmers with high

quality varieties; To provide incentives for increased investments in seed production; To facilitate technology generation and transfer through shared breeding and licensing; To bring about revolution in the seed industry and hence contribute to the attainment of the

national goal of economic development and food security.

The Plant breeders Rights Registry has been established and the PBR Registrar appointed to deal with

the regulation of PBR issues as stipulated in the Act. The royalty fees payment advocated by the Act isan incentive to researchers as it will motivate them to venture in plant breeding for more crop varieties

that are more productive and adaptive to the environment.

The Seed Act of 2003 complements to the Plant Protection Act of 1997 in terms of regulation of theimportation, exportation and sales of seeds in the country. According to the Act, all seed importation,

exportation, production, processing, distribution, sale or advertisement for sale of seeds must seekpermits from the Director

[7]. Similarly all seed dealers in the Country have to be registered with the

Director.

Seed quality control is a central issue addressed by the Act with the aim ensuring that the Tanzanianfarming community gets quality improved seeds for enhancing productivity and production. The Actestablishes the Tanzania Official Seed Certification Institute (TOSCI) with the mandate of carrying

out seed field inspections and seed sampling and testing. The Act also establishes the National SeedsCommittee as a stakeholders forum responsible for advising the Government on all matters relating to

the development of the Tanzania seed industry. Promotion of on-farm seed production andmultiplication by smallholder farmers through the establishment of formal procedures for certifyingseeds produced by smallholder farmers has been highlighted in the Act; and the seed obtained throughthis procedure will require certification by TOSCI as Quality Declared Seed (QDS).

National Trade Policy

The National Trade Policy of 2003 is based on the mid 1980s to 1990s trade liberalization initiatives

that included gradual reduction of import restrictions; liberalization of foreign exchange transactions;simplification of the tariff structure, abolition of import bans for luxury goods and licensingrequirements for exports; and allowing the private sector to compete in processing and marketing of

cash crops[8]

. Essentially, the policy responds to issues raised in Tanzanias World Trade Organization(WTO) trade review which was undertaken in 2000. The issues raised included Tanzanias desire in

creating an environment conducive both to domestic and foreign investment and the countrys limitedexport capacity despite the existing opportunities such as the regional trade integration initiatives aswell as the bilateral and multilateral preferential trade partnerships

[9]. Reforms in the agricultural

sector that involved the Government withdrawal from direct involvement in production, processing

and market activities also prompted the formulation of the national trade policy.

The policy focuses on structural transformation of the economy, product and market diversification,raising efficiency and productivity as well as stimulating international competitiveness as important

roles through which trade can contribute to the achievement of the countrys poverty reduction


7/27

aspirations by 2025. It aligns national development agenda with regional and international tradeobligations and maximization of the benefits of participation in regional and international trade

arrangements. The policy provides for the interim safeguarding of domestic industry and economicactivity threatened by liberalization

[10], and addresses the supply-side constraints that inhibit

expansion of trade within the domestic and global market as the route towards rapid economic

development. In this respect, the policy vision is to transform the economy from a supply constrained

one into a competitive export-led entity responsive to enhanced domestic integration and widerparticipation in the global economy through national trade liberalizationand the mission is tostimulate the development and growth of trade through enhancing competitiveness aiming at rapid

socio-economic development[11]

. The Policy objectives are:-

To stimulate trade development within the domestic market through establishment ofimproved physical market-place infrastructure, dissemination of market information andincreasing access to the market;

To transform the economy towards an integrated, diversified and competitive entity capableof participating effectively in the Multilateral Trade System (MTS);

To stimulate and encourage value-adding activities on primary exports as a means ofincreasing national earnings and income flows even on the basis of existing output levels;

To stimulate investment flows into export-oriented areas in which Tanzania has comparativeadvantages as a strategy to introduce technology and innovation into production systems; and

To attain and maintain long term current account balance and balance of payments througheffective utilization of complementarities in regional and international trading arrangementsas a means of increasing exports combined with initiatives for higher efficiency in theutilization of imports.

The policy also focuses on the rationalization of the continued use of tariffs as an instrument ofprotection and revenue generation; further reduction of tariff rates; and narrowing of tariff bands with

the aim of reducing tariffs to levels that conform to regional and multilateral obligations.Rationalization of central and local government taxation with the introduction of lower rates whileimproving the tax administration regime and removing export taxes is another important barrier aspectaddressed by the policy.

Regarding the Technical Barriers to Trade (TBTs), the policy undertakes to continue observing andenforcing international standards rigorously in order to protect economic activities particularly in the

agricultural and livestock sectors from the dangers of exotic pests through Sanitary and Phytosanitary(SPS) measures. The other policy issues include consumer protection against sub-standard andharmful products as per SPS and TBT agreements and raising awareness on international standards

with respect to conventional exports and to new products adopted under economic diversificationstrategies.

9.2 Flowers and Ornamental Plants

Flower production for export is basically practiced by large Companies in the northern zone especiallyin Arusha and Kilimanjaro regions where a list of flower producing and exporting companies operates.

Different types of flowers produced are exported to Germany, Netherlands, Norway, USA, France,Switzerland etc. The companies involved in flower business in the Northern Zone include KilifloraNduruma Farm Ltd (cut roses), Tengeru Flowers Ltd (cut roses), Hortanzia Ltd(cut roses), Tanzania

Flowers Ltd(cut roses), Dekker (T) Ltd (Chrysanthemum cuttings), Mount Meru Flowers Ltd , (cutroses), Arusha Cutting Ltd (Chrysanthemums), Multiflower Ltd (Chrysanthemum cuttings),DekkerKilimanjaro Ltd (Chrysanthemum cuttings), Dekker (T) Moshi Ltd (Chrysanthemum cuttings), FidesTanzania Ltd (different flower types- Geraniums, Chrysanthemums, Osteospermum, Impatiens, Aster,

Kalanchoe) ,LA Fleur D Afrique Ltd (cut roses), Mount Meru Flowers Ltd (cut roses), Green StarsCuttings Ltd. (Chrysanthemums, Border/garden plants), Vasso Agroventures Ltd (garden and pot


8/27

plants flower seeds),Kilimanjaro Flair Ltd (Hypericum flair). An area of about 137 Ha of greenhousesis estimated to be under production of different types of flowers such as Chrysanthemums, Roses,

ornamental sunflower and Licianthus most of which are exported out of the country.

Flower production for export is increasing year to year due to business growth leading to expansion of

production sites. From 2005/06 the quantity of flowers exported to different destinations was

estimated at 5,862 tons which increased to 6,897 tons in 2006/07 from an estimated acreage of 137 ha.

Table 1: Northern Zone Flower Companies, Area under Production and Flower Exports SN Name of flower

CompanyType of

flowerArea

(Ha)Employment(No. of workers)

Exported flowers (MT)2005/06 2006/07

1 Tengeru Flowers Roses 8 265 268 4002 Mount Meru Flowers Roses 14 310 720 1,0003 Tanzania flowers Roses 12 300 720 8524 La Fleur DAfrique Roses 9 206 402.4 5345 Kiliflora Roses 37 928 2,240 2,3726 Hortanzia Roses 7 288 352 3607 Fides Tanzania Roses 6 140 100 918 Dekker Bruins(T) Ltd Cuttings 13 770 674 750

9 Arusha Cuttings Cuttings 3 120 75 7910 Multiflower Ltd Cuttings 1.5 90 19 2411 Green Stars Ltd Cuttings 1.5 61 19 2012 Kilimanjaro Flair Ltd Cuttings 25 260 273 415

Total 137 3,738 5,862 6,897Source: TAHA, 2007

In recent years some flower production and export has become an important undertaking in theSouthern highlands in Njombe and Mufindi districts in Iringa region where basically cut flower rosesis produced for export. Flower production is also taking place even in Dar es Salaam region

(Kigamboni area) where production of leafy flower types and heliconia is undertaken by someinvestors for export purpose.

9.3 Fruits, Vegetables and Other Products

Tanzania has a variation in topography and altitudes which dictates different climatic conditions and

the potential of growing different types of fruits ranging from tropical, sub-tropical and temperatefruits. The fruits produced in the country are oranges, mangoes, grapes, pawpaws, pineapples,bananas, guavas, lemons, tangerines, avocados, soursops, peaches, plums, pears, apples, jackfruits etc.

Most of fruit crops are produced by small scale farmers and are consumed locally with little exports.However, information from TAHA show that private companies like Kilimanjaro Horticulturalexports Ltd export strawberries and raspberries

[12].


9/27

The production of vegetables is also still low and is mostly practiced by small scale farmers mainly for

domestic markets, except for a few vegetables that are produced for export. Potential areas forvegetable production are found in the highlands and coastal belt of the country; including Kilimanjaro,Arusha, Tanga, Mbeya, Morogoro, and Iringa regions. Vegetable production for export is carried out

by private companies like WIMBO Exports through own farms and outgrowers. Vegetables that are

produced for export include green beans, peas, courgettes, chillies, baby corn, baby carrots, baby leeksetc. For example, for 2005/06 and 2006/2007 seasons, the Gomba Estates Ltd (the former vegetableexporter) exported 1,666.48 and 1,500 tons of fresh vegetables respectively.

Spice and HerbsSpice and herbs crops are aromatic crops with hot to piquant taste used to impart good flavor and taste

to food. Spices and herb crops produced in the country include; cinnamon, cloves, cardamom,turmeric, ginger, vanilla, paprika, chillies, coriander, parsley, celery, black pepper, garlic, mints,rosemary, lemon grass, lemon verbena, nutmeg, rosella , aloevera, Artemisia etc. Most spices and

herbs grown in Tanzania were introduced from other countries (e.g. clove was introduced to Zanzibarfrom Indonesia through Mauritius). Spice and herb production is predominantly undertaken by smallscale farmers in the spice growing zones in the East Uluguru Mountains (Morogoro region), the East

Usambara Mountains (Tanga region) and the famous Zanzibar Islands. Most spices and herbs are

economically important for both domestic and export markets. However like other horticultural crops,spice production is low although there are few exported spices like cinnamon, cloves, ginger,turmeric, garlic etc to various destinations as shown in Table 46. The current export estimates for

spice crops is less than US$5m per year although DTIS (2005) reports the spice export potentials topossibly reach US$15-20 per year.

Table 2: Spices Exports by Value, Volume and Destination, 2006 SN Spice type Quantity

exported (Kg)Value(FoB) Tshs

Destination

1 Cinnamon 100 50,000 DR Congo2 Cloves 3,032,843 9,963,555,798 United Arab, Burundi

India,Jamaica,Japan,KenyaSingapore, Vietnam

3 Ginger 101,599 8,709,850 Kenya4 Turmeric 3,370 2,140,000 Hungary, Comoros

Zimbabwe5 Other spices 58,134 38,185,120 DRC,Germany,United Kingdom,

Hungary, DR Congo7 Garlic 116,136 19,624,099 Burundi, Finland, United Kingdom

,Kenya, ComorosDR Congo

TOTAL 3,312,182 10,032,264,867Source: Worked out from TRA (Statistics Unit), 2007

Medicinal Plants - ArtemisiaArtemisia plant (Artemisia annua L.) also known as annual wormwood or sweet wormwood is a

highly aromatic annual herb of Asiatic and Eastern Europe origin and widely dispersed throughout thetemperate regions. Following recent researches in traditional herb medicine in China, A. annuahasbrought attention to be a rich source of qinghaosu(artemisinin) a compound that is ant malaria agent

and also reported to be a potent plant inhibitor with a potential as natural herbicide.

In Tanzania, commercial artemisia production as one of the important medicinal herb started recentlyin 2005/06 following awareness created by various Private Companies such as African Artemisia Ltd,

Jolanji Ltd and Lima Ltd. The Jolanji Ltd and Lima Ltd are operating in the Southern highlandsregions especially Iringa and Mbeya while African Artemisia Ltd operates in the Northern highlands


10/27

regions of Kilimanjaro and Arusha. The companies use Contract Farming arrangements wherebysmall scale growers are contracted to grow the crop with the company support in providing technical

skills and input credits. By 2006, the area under artemisia cultivation was 3,560 Ha whichproduced about 4,120 tons of artemisia leaves per annum.

Table 3: Structure of Artemisia Production, 2006

SN Region Company Number ofContractedfarmers

2006Cultivated area

(ha)production (tons)

1 Northern highlands(Kilimanjaro Arusha )

AfricanArtemisia Ltd.

NA 1,100 2,000

2 Southern highlands (Iringa,Mbeya)

Jolanji Ltd 4,724 2,440 1,875Lima Ltd 710 140 245

TOTAL 3,560 4,120Source: Worked out from various reports at MAFC.

Although artmesia is a new crop, it has got a huge potential in enhancing poverty alleviationespecially in areas where its production is carried out through contract farming arrangements. Basingon its potential, promotion of artemisia cultivation is one of the agenda in the ruling Chama cha

Mapinduzi (CCM) election manifesto as well the agricultural policy currently being drafted. Takinginto consideration the importance of artmesia in the preparation of Artemisinin and Artemisinin-BasedCombination Therapy (ACTs), the World Health Organization (WHO) is supporting artemisiapromotion initiatives for the population in need

[13].

MushroomMushroom production in Tanzania started in 1993 with a few small scale growers. The commonly

grown mushroom in Tanzania is of Pleurotus types which are suitably grown in tropical climate.However, there is a big potential to produce other types of mushrooms like auricularia, button andeven ganoderma (medicinal types). Other wild mushroom types such as cantharellus and

termitomycetes are still found in some parts of Iringa, Tabora, Coast region, Morogoro, Mtwara,Kagera regions etc.

One of the advantages of mushroom farming is on the economical use of various crop residues, cropby-products and grass which are used as substrates for mushroom production. The diverse weather inthe country allows production of various types of mushroom and since mushroom is produced inindoor/backyards, production can be done throughout the year. Mushroom production is estimated at

260,000 MT per year with an annual average income of more than 26,847,040 US$ (Mwasha, A.M,2004-Study on status of mushroom marketing in Tanzania). The study estimates the availability ofmore than 1.0 MT of crop residues countrywide with a potential to produce an estimated quantity of

800,000MT of mushrooms per year. Various research institutions dealing with mushroom includesTIRDO, SUA, UDSM (Microbiology), ARI- Uyole, Horti-Tengeru etc. The most mushroomproducing regions include Arusha, Kilimanjaro, Morogoro, Coast region, and Dare s salaam, Iringa,

Mbeya and Mwanza. Three major factors constraining mushroom production in Tanzania include lackof adequate knowledge on mushroom production, inadequate quality spawn production and postharvest losses resulting from the perishable nature of mushroom. The emergence of mushroom

growers associations and networks[14]gives an assurance on the bright future of the mushroomindustry in the country.

Organic Agriculture

Organic agriculture can be defined as a system of managing agricultural production usingenvironmental friendly farming practices with limitations in the use of synthetic chemicals including

fertilizers and pesticides (ITC, 2002). Organic agriculture in the country is practiced in the productionof various crops in several regions of the country. The crops under organic production practice include


11/27

cash crops (cotton, black tea, and cashews, cocoa); spices and herbs (ginger, cinnamon, vanilla, blackpepper, cardamom, cloves, lemon grass, rosella etc.); fruits (mango, orange, lemon, jackfruit,

pineapples, paw paws, guavas etc. oil crops (sunflower, sesame, oil palms, coconuts) and vegetable(peas, onions, garlic etc). It is estimated that there are more than 40,000 certified organic farmers with64,000 ha under organic agriculture production in the country. In order for a product/produce to be

recognized as organic, it needs inspection and certification with respect to recognized organic

standards.

Currently, the Tanzania Organic Agriculture Movement (TOAM) is spearheading the promotion of

organic agriculture in collaboration with the government through MAFSC, the local certification bodyknown as TanCert and various stakeholders. The organic agriculture movements in the East AfricanRegion led to the development of the East African Organic Products Standards (EAOPS) and the

official East African Organic Mark (EOAM) in 2006 and 2007 respectively.

Table 4: Certified Organic Producers in TanzaniaName of the firm Organic production area Products

1 Kilimanjaro native CooperativeUnion (KNCU)

Moshi /Kilimanjaro Arabica coffee (Certification in2004)

2 Tanzania Organic products Ltd.(TAZOP)

Zanzibar, Tanga, Kigoma Herbs and spices

3 Mufindi tea Company Ltd Njombe Black tea and herbs4 Tazania Tea Packers (TATEPA) Mafinga /Dar es salaam Black tea and herbs5 Zanz-Germ Enterprises Ltd. Zanzibar, Tanga, Kigoma Herbs and spices (ginger, pepper,

turmeric, chill, and lemon grass)6 Premier Cashew Industry Ltd.(PCI) Coast, Mkuranga Cashew nuts7 Clove Stem Oil Distillery (CSOD) Pemba Essential oils: Lemon grass,

cinnamon leaf oil, eucalyptus, andsweet basil.

8 Kagera Cooperative Union (KCU) Kagera Robusta Coffee9 Biolands International Ltd. Mbeya (Kyela) Cocoa10 Dabaga Vegetable Can Company Iringa (Njombe) Canned pineapple11 Kimango farm Enterprise Ltd. Morogoro Herbs and spices12 Tanganyika Instant Coffee Company

Ltd.(TANICA)Kagera Instant Coffee

13 Bore Tanzania Ltd. Shinyanga (Meatu) Cotton14 Matunda Mema/Kipepeo Karagwe Dried Fruits


12/27

15 Kibidula Mafinga Herbs (in conversion), no export16 Bombay Burmah Trading

Corporation Ltd.Usambara/Soni-Herkulu Estate Fair trade and organic tea

17 ADP Isangati Mbeya (Isangati) Turmeric, no exportSource: EPOPA, 2004 Basic data on certified organic production and export in Tanzania.

9.4 Prospect for the Horticultural SectorDomestic and cross border tradeIn recent years, horticultural commodities have become highly tradable in both the domestic andinternational markets. The increase in horticultural commodities trade can be attributed to a number of

factors including the following:

Land pressure, necessitating producers to go for more intensive production and higher valuecrops (Kilimanjaro and Arusha Regions);

Changes in the nutritional and living standards of Tanzanians have increased demand forhorticultural food crops;

Increased food processing industries have created demand for raw materials (juices, syrups,pulps, pickles, etc.);

Disruption of the traditional collection of vegetables, fruits and mushroom from the wildresulting from Villagization and urbanization has encouraged more pronounced home andmarket gardening undertakings;

Status of horticultural crops in the cash economy has increased, sometimes at the expense ofexisting cash crops because in most cases they have higher value per unit area (tomatoes,passion fruits, avocado, mushroom, flowers, etc.); and

Available new markets outside the country as a result of trade liberalization have stimulatedproduction and exports of vegetables, fruits and flowers from Tanzania.

The horticultural products value chain analysis involves a sequence of activities that start at farm levelending at market level. Such activities include production, harvesting, collection, sorting, packing,

transportation and processing. Basically these processes involve the farmer (producer) on one hand;and middlemen (traders), processors and consumers on the other. The production and harvestingprocesses are normally carried out at farm level by the farmers themselves after which traders collect

the products for further processes. Here traders buy the products at farm gate prices but at certaintimes producers may upon harvesting, collect and assemble their products for sale to traders,processors and consumers at the designated collection centres. However because of the increasing

growth in horticultural trade, traders and middlemen normally buy straight from the farmers. InTanzania most of the horticultural products produced in the remote rural areas are transported to urbanareas for processing and/or marketing.As can be noted from Box 11, the cross border trade in horticultural products between Tanzania and

neighbouring countries like Kenya is rapidly gaining momentum (URT/World Bank, 2007). Theinformal trade with Kenya in products like onions, tomatoes, potatoes and oranges has more directlinks to small and resource poor farmers, many of whom are actively engaged win trading as can be

noted in box 11; and hence creates a potential avenue for enhancement of poverty eradication

especially in areas neighbouring Kenya.

Box 1: Marketing Chain for Oranges and Onions

Orange Marketing and Competitiveness

Most of the oranges imported into Kenya originate from Tanga and Morogoro. Tanzanias competitiveness in Kenyamarkets is due in part to the absence of greening disease, a problem that affects Kenyas higher elevation growers. Inaddition, Kenyan producers face tighter land constraints, and orange production competes with more profitable exportcrops.


13/27

External Support to Farmers to Facilitate Competitiveness

Government provision of new planting material in the Muheza district, in the Tanga region, helped establish significantorange production in the 1970s. More recently, the development Alternative Inc. Private Enterprise Support Activities

project has helped farmers for marketing associations that streamline the marketing chain, with farmer associations nowselling straight to Nairobi-based traders. Over time, farm-gate prices have almost doubled as farmers marketing

options have increased, and the bargaining power of local traders has declined. The project continues to document andassess the effect of taxes and fees levied during transport to the border, which appear to be a continuing constraint onthe trade.

The Marketing Chain for Onions

Tanzanian exports now account for a significant portion of the Kenyan onion market. Tanzania exports throughput theyear, mainly from Mangola in Arusha region. The marketing chain includes rural brokers who, for a fee, introducewholesale traders to farmers who have onion for sale. The trader buys the crop from the farmer, packs it, and hirestransport to the Arusha market, where the produce is unloaded and sold by the wholesaler. Some efficiencies could

perhaps be achieved by having by the Nairobi trader work directly with the Tanzanian trader who buys from the farmer,rather than through the Arusha market. This approach would save handling costs, market fees and the wholesalersmargin and would allow a greater portion of the sales price to be returned to the farmer. Reducing the number of timesthat onions are handled would also improve quality further. During interviews, traders stated that there was a law orrule that all produce destined for Nairobi had to be traded through the Arusha market. This information needs

verification.

Mangola onion producers have not yet received support from a donor-funded project, but their competitiveness isbased on both their proximity to Nairobi and their higher yields, which are probably due to lower incidence of fungaldiseases in Tanzanias drier production areas. Tanzania producers also have a quality edge in the Nairobi market:farmers grade the onions, and the better ones are exported. Farmers and traders note that their competitive positioncould be improved further by improvements in onion seed quality and an increase in the range of seed varieties.

Source: URT/World Bank 2007.

Preferential trade opportunitiesThe Tanzania agricultural export sector has been and is enjoying the existence of various preferentialaccesses into certain countries and trade blocks within the World Trade Organization (WTO)

framework. WTO was established in 1995 after the eight year Uruguay Round negotiations from 1986to 1994, as the successor to the General Agreement on Tariffs and Trade (GATT). As a globalinternational organization dealing with the rules of trade between nations, the nucleus feature of WTO

is trade agreements, which are negotiated and signed by the bulk of worlds trading nations andratified in their parliaments (Kweka, J 2004). The WTO aims at enabling producers of goods andservices, exporters and importers conduct their business smoothly, predictably and as free as possible

in view of improving the welfare of the peoples of the member countries.

Tanzania is one of the WTO founding members[15]

and out of several WTO trade agreements andnegotiations, the Country has selected agriculture as one of the priority areas

[16]. The issues of concern

in this area include agricultural subsidies in developed countries, sanitary and phytosanitary (SPS)measures and technical barriers, tariff escalation and tariff peaks and appropriate adjustment ordevelopment friendly mechanism to mitigate the negative impacts of the reform process.

9.4.1 Investment Opportunities in Horticulture

Investment areas in horticulture are numerous ranging from production, processing and trading. Thefollowing can be among the areas of interests:

Introduction and multiplication of quality improved planting materials and seed adapted

to different agro-ecological zones for distribution to farmers;


14/27

Introduction of large and small scale fruit and processing and extraction of essential oils

from spices; Quality spawn production and large scale mushroom production, processing and

marketing; Establishment of large scale/ estates for fruits, vegetables, flowers and spices in regions

with great potential; Supply and distribution of quality packaging material to meet the target market; Large scale flower production in regions with great potential; and Horticultural improved seeds distribution.

Categories of investors

Three categories of investors in the horticultural subsector existing in Tanzania include the current

investors, current investors in non-horticultural/agricultural sectors and potential domestic and foreigninvestors.

Current investors

These may be institutions and/or individuals who are currently investing in horticulture including the

following:-

Local farmers with experience in local farming techniques and responding to local

conditions. Domestic businesspeople with an understanding of the business of horticulture and the

opportunities for business development along specific elements of the value chain. Foreign investors who have some experience in the sector, who are likely to know of the

market demand for horticultural products that can be produced within certain areas.

The challenge when targeting these investors is to understand their current constraints andexpectations. These people have a good understanding of the business environment and can quicklyidentify the major constraints to expanding their investment base. There is a great opportunity to work

with these people to mobilize greater levels of private investment in the agricultural sector.

Expanding the investment base of current investors in horticulture will involve:

Identifying and responding to current investor concerns. Broadening the networks and access to information (i.e., market and producer

information) of current investors. Creating a supportive policy, legal and regulatory framework for investment in

horticulture.

Current investors in the non-horticultural/agricultural sector

Included here are investors participating in the non-horticultural/agricultural sectors such as trade,

tourism and construction but could diversify their investment portfolios by investing in

horticulture/agriculture. The challenge when targeting these investors is to help them betterunderstands the opportunities that can be found in horticulture/agriculture in their respective areas.

Agriculture is likely to be a sector they know little about or have biased views of.

Supporting the transition from non-horticultural/agricultural to horticultural/agricultural investment

among domestic investors is likely to involve:

Improving networks and access to information on horticultural/agricultural investment

opportunities within given areas.


15/27

Identifying and responding to current investor concerns.

Potential domestic and foreign investors

This is a category of investors who for some reasons, are not currently investing in the

horticulture/agriculture. The reasons may include:

Uncertainty concerning the security and rate of return of their possible investment in the

countries of investment. Better investment opportunities available in other countries in Africa or globally (i.e.,

more competitive investment climates). Lack of awareness of the potential investment opportunities that exist in the given

countries.

Thus, enticing these potential investors to put their investments in horticulture/agriculture is likely toinvolve the following:

Reforming the business environment to make it more competitive, stable and predictable. Raising awareness concerning the potential for investment in horticulture/agriculture in

given countriesAmong potential domestic and foreign investors, it is proposed that priority attention be given to thefollowing groups:

Foreign institutional investors engaged in the agricultural sector, with a priority given to

those located in other African countries (e.g., South Africa) or located in Europe and theUS with investments in other African countries.

Potential investors from the African Diaspora who can provide remittances to the in the

form of agricultural investments.

Foreign Direct Investment (FDI)Economic researches have confirmed that sectors dominated by Foreign Direct Investments (FDI)

realize greater output growth and productivity compared with domestic firms[17]. The role of FDI inenhancing development in host countries is with respect to increased output growth andproductivity; and is widely recognized in the following areas:

Filling the gap between desired investment and domestically mobilized savings; Increasing tax revenues; and Improving management and technology as well as labour skills.

In short, FDI contributes to total factor productivity and income growth in host economies, over andabove what domestic investment would trigger and is a valid alternative in the fight against rural and

urban poverty in developing countries.

Following the improving economic performance and investment climate resulting from the economicand political reforms that started in early 1990s, Tanzania has witnessed an increase in the inward FDI

stock from US$224 million in 2001 to US$6,028.8 in 2005 (E. Msuya 2007). Despite the enormousinvestment potential in the agricultural sector

[18], the FDI resources that have been directed to the

sector are too small relative to the manufacturing[19]

and mining sectors, leaving the sector with an

average of about 2.1 percent of the total FDI flows to Tanzania (Msuya, E 2007). Much (about 90percent) of the country agricultural FDI inflows goes into crop production where it has stimulatedtremendous growths in the manufacturing related crop industries like sugar and tea (Msuya, E and


16/27

Ashimogo, G 2006). The FDI is also reported to have enhanced growth in the production andproductivity of tobacco in Tanzania amongst smallholder growers (URT 2001)

[20].

In the northern Tanzania regions of Kilimanjaro and Arusha, the growth of the flower industry that hasbeen experienced in recent years, is a result of FDI from the Netherlands (the major flower importer

from Tanzania). The export of vegetables to the European market is also on the increase especially in

Arusha region following the adoption of the contract grower and out grower system betweensmallholder vegetable growers and foreign companies (mainly supermarkets in Europe), through theMarket Intermediary Management arrangements

[21] (TAHA, 2007). In the Dodoma region there are

indications of revamping grapes production following the FDI in the construction and operation of amodern winery by CETAWICO, an Italian firm. With an installed capacity to process 500 tons ofgrapes per season and with an expansion programme for processing or 4,000 tons per year in three

years, the winery processes only 150 tons of grapes per season or 300 tons per annum[22]

. The ongoingcampaigns by the Government aims at mobilizing smallholders in all areas with potential for grapecultivation to grow the crop on contract with CETAWICO. Such examples demonstrate that FDI flow

to agriculture/horticulture is viable and beneficial to smallholders.

The Tanzania FDI report of 2004 (URT 2004) indicates that the regional distribution of FDI in

Tanzania is consistent with natural resources endowment and the level of social and economic

infrastructure development in a given region[23]. This goes with the fact that the FDI flows to ruralagricultural areas where the infrastructure is poor are negligible, hence the failure of FDI to makelinkages to the local economy and cause a significant impact on poverty reduction. On the other hand,

FDI has little impact on the employment situation, as it is in most cases directed to the capitalintensive sectors. Therefore after registering commendable achievements in other sectors like miningand manufacturing as already said, the challenge for Tanzania should now be to push FDI to important

poverty reduction sectors like agriculture as advocated by the government. Speaking at the TanzaniaInvestment Centre (TIC) tenth anniversary climax in Dar es Salaam, the Prime Minister MrEdward Lowassa underscored the need of collaborative efforts between TIC, Government Ministries,

public institutions and key stakeholders in working out strategies that would ensure there is anincrease of investors in the agricultural sector (IPPMEDIA, 2007).

9.5 Challenges and Constraints in the Hoticulture Sub-sectorThere are several constraints that are currently limiting the development of the horticulture sub-sectorin the country. These constraints are related to production, processing, marketing and policy aspects asoutlined below:

ProductionThe horticultural production in Tanzania is mostly impeded by the following factors:

Low productivity as most farmers experiences low yields of horticultural crops due to

poor management practices including insufficient use of recommended levels of

fertilizers (industrial or organic) and agrochemicals for pests and diseases control; Un-specialized production in small scale scattered farms/plots of different types of

horticultural crops, which leads to difficulties in marketing and even provision ofextension services.

Use of low quality seeds and other propagation materials which are prone to pests and

disease conditions and not adapted to the local environment in given agro-ecologicalzones;

High dependence on imported seed especially for important commercial vegetables

crops; and Inadequate functional horticulture producer organizations.


17/27

The seasonal availability of horticultural produce can be attributed to dependence on seasonal rains forhorticultural production. There is also little production off-season horticultural production which is

normally carried out along or near water sources with few farmers who can afford to bore watercharcoals (in areas with high water tables). Such practices are reported to have started causing severedegradation of the environment (Njombe District Council, 2005). Horticultural production practices

along water sources in areas like Njombe are getting blamed for exhausting water sources whose long

term effect if not checked, will have a far reaching impact for example, to people in the Usangu plainsthat get water from sources in Njombe district.

MarketingLack of markets for horticultural products in Tanzania is undoubtedly the single greatest obstacle todeveloping the horticulture sub-sector in the country (URT 2006). It is largely linked to seasonality in

production because effective demand fails to cope with surplus production in the peak productionperiod. Because of the limited capacity for processing the horticultural produce relative to surplusproduction in the peak harvesting period, coupled with unavailability of technologies for storing

surplus perishable horticultural products, most of the produce gets spoilt hence causing great losses toproducers. One can therefore conclude that specific marketing constraints in the horticulture sub-sector include the following:

High seasonal domestic markets characterized by over supply of common produce typesduring peak seasons and low returns to farmers due to low prices as well as higher prices

to farmers during off season (acute shortage period); Limited access to market information, inadequate marketing knowledge and agribusiness

skills; Poor transport infrastructures as most rural roads are impassable during rainy season. Poor handling of fresh produce with long transport distances leading to high post harvest

losses; Lack of and or insufficient experience in producing products for export markets; and Inadequate functional horticulture marketing organizations.

Agro-processing

The existing few processors for horticultural crops[24]

especially for fruits and vegetables can onlyabsorb small amount of the surplus produce. Because of the limited capacity for processing thehorticultural produce relative to surplus production in the peak harvesting period and theunavailability of technologies for storing surplus perishable horticultural products, most of the

produce gets spoilt hence causing great post-harvest losses to producers. Also most horticulturalproduce is transported unprocessed and sometimes without proper sorting resulting to unnecessaryhigh transport costs due to bulkiness. The processing industry faces a number of problems such as:

High initial investment cost for processing plants, as most parts are to be imported. Lack of reliable market for processed products due to unfair competition with cheap and

sometimes sub-standard imports. Availability of fresh vegetables or fruits can sometimes hinder or limit the business

prospects by agro processors as consumers may prefer cheap fresh produce available inthe market to processed products;

High operating costs associated with costly imported packaging materials,

preservatives/additives, poor infrastructure (roads) increasing costs for raw materials,high electricity costs, and various taxes;

Seasonal and low quality supply of raw materials leading to seasonal closure of

processing factories, and hence inconsistent availability of processed products in the

market; and


18/27

Insufficient organization, training to small scale processors and promotion of the locally

processed products.

The Government has been and is challenged to promote agroprocessing investments in the area of

horticulture as a marketing assurance strategy to horticultural producers that would in the short andmedium term minimize post harvest losses experienced during peak production periods and add value

to the produce. The existing local investors could be enticed to invest in this area but most importantlyalso, the FDI could be directed in this area. However, since horticultural production in the country is

also characterized by acute off-season scarcities, another important challenge has been that of rawmaterials supply assurance to the agro processors during the off-season. The fact that once established,horticulture processing facilities will have to source the raw materials on a competitive basis

[25], poses

another big challenge to investments in vegetable and fruit processing.

Quality and StandardsRecent developments that emanate from the Sanitary and Phytosanitary (SPS) and Technical Barriersto Trade (TBT) agreements pose a great challenge in the development of the horticulture sub-sector inTanzania. The agreements, which originated from the General Agreement on Tariffs and Trade

(GATT), are recognized in the framework of the Final Act of Urugway round that established WTO in1995; and they generally aim at ensuring the availability of safe and quality products in the market.However the SPS agreement is aimed at protecting animals and plants from pests and diseases as well

as humans from healthy risks associated with additives, contaminants, toxins or disease causingorganisms in food and beverages (Mohamed, R and Mwakasungula, G 2007). More importantly is thatSPS measures are designed to use strict health and safety regulation to ensure food safety as well as

animal and plant health safety.

The Hazard Analysis Critical Control Points (HACCP) is one of the SPS measures that are continually

being promoted through incorporation into Food Safety Legislation in many countries. It involvesidentification and close monitoring of Critical Control Points (CCPs) in food production andpreparation processes with the view of ensuring that food is safe for human consumption. TheHACCP principles avoid traditional end product testing and seek to identify hazards and reduce

risks throughout all stages from producer to plate. The system places responsibility on operators to

prevent, eliminate or reduce physical, chemical and microbiological hazards in their food businessesby identifying the hazards that need to be controlled, establishing effective procedures that control the

hazards, ensuring that these procedures work and are being applied; and providing evidence of theircontrol procedure.

The SPS measures are supposed to be regulated through internationally accepted standards approvedby International Standard Organization (ISO). However, in recent years the commonly used standardsare the ones developed and used by private sector organizations such as the British Consortium

(BRC), EurepGAP, SQ2000, and Global Food Safety Initiative (GFSI).

The EurepGAP standards for example, go beyond higher food safety standards to also includeenvironmental and social demands, which are too difficult if not impossible for Smallhoder producers

to comply with. The traceability system being advocated by EU countries as part of EurepGAP entailstracing and following food, feed, food-producing animal, or substance intended to be or expected to beincorporated into a food or feed, through all stages of production, processing and distribution (EU

General Food Law Regulation 178/2002). The entire system requires rigorous record keeping forfacilitating spot auditing checks, inspection, testing and verification of adherence to set standards suchas Minimum Residual Levels (MRLs) in line with HACCP requirements.


19/27

In Tanzania the SPS measures are enforced through government institutions such as Tanzania Bureauof Standards (TBS), Tanzania Food and Drugs Authority (TDFA), Ministry of Agriculture, Food

Security and Cooperatives (MAFC) and Ministry of Livestock Development (MLD).

Organic farming

Organic farming is slowly gaining momentum in the Tanzanian agricultural context following theexistence of niche markets that offer higher premium prices for the organically produced productscompared with the conventional ones. Organic production is also internationally recognized as a

system that complies with the HACCP food safety requirements as it involves a series of certificationprocedures. However, organic farming seems to be too expensive because of the cumbersomeinspection and certification procedures required. There is still one organic certification body in the

country known as Tanzania Certification (TanCert) which is mandated to offer inspection andcertification services to organic growers. However, because TanCert is not internationally accredited,its certification has to be approved by other internationally accredited certification bodies.

[26]. In order

for the Tanzania organic products to access other international markets, the inspection andcertification exercises have to be carried out by the hired expensive inspectors who are internationallyaccredited. Even the local organic inspectors and certifiers who are being trained

[27]through regional

and national initiatives will require international accreditation before they can become useful.

Producer OrganizatiosnTo mitigate the horticulture production and marketing constraints, the challenge that Tanzania needs

to address is on developing strong producer organizations which can also attract the FDI flows intohorticultural production and processing. Producer organization is also increasingly becoming animportant aspect in enabling the producers to access markets. The establishment of organizations such

as the Tanzania Horticulture Association (TAHA) in 2004 was geared to promote the horticulturesubsector in the country so as to become more profitable, sustainable and effectively contributetowards economic development of the country. Likewise, the Association of Mango Growers

(AMAGRO) was registered in 2003 to spearhead the cultivation and export of mangoesamongst itsmembers. Although TAHA has a national outlook and is expected to address all horticultural crops, atpresent its activities are concentrated in the northern regions of Arusha and Kilimanjaro

[28]and its

promotional activities are mainly directed to exportable flowers, vegetables and some temperatefruits[29]

. In order for TAHA to be more effective, it needs to expand its operational territory throughinclusion in its list, members from other horticulture growing areas. TAHAs horticulturedevelopment agenda also needs to focus on all horticultural crops including the new high value crops

that are currently gaining prominence.

Emerging high value cropsThe emergency of new high value horticultural crops particularly spices such as vanilla and paprikaand mushroom cultivation in the economy of Tanzania is a challenge to the Government, researchers,extensionists and horticultural industry stakeholders to work out their promotion and marketing

strategies. Since some of these require special and sophisticated agronomical, processing and storageprior to marketing, special efforts is required to ensure that extension personnel are adequately trainedto be able to provide the meaningful technical advice to farmers.

Policy IssuesThe 1997 agriculture and livestock policy is the one that guides horticulture sub-sector development

in Tanzania. The policy however lacks specific emphasis on specific horticultural crops but it ratherfeatures in the policy as a generic aspect in the agricultural spectrum. In view of its importance,Nyomola A.M.S (2005) proposes the formulation of a separate horticulture policy that will address

specific aspects of production, processing, and marketing and support services[30]. Althoughstakeholders have been pressing for a policy on the horticulture sub-sector, there are no indications offormulating an independent policy from the broad agricultural policy (URT, 2006). Stakeholders have


20/27

been attributing lack of a sound horticulture industry to low priority accorded to the sector in terms ofresources allocation for programme and strategy development; and that a specific policy document

would change this tendency. Formation of horticulture section/division in the structure of the MAFSCand or formation an autonomous institution to cater for horticulture development issues are some of

the critical policy issues that were thoroughlydiscussed at the national HorticultureStakeholders Workshop held in Arusha - December 2005.

Airfreight ChargesExporters of fresh vegetables and flowers in the major northern export zone face cargo airliftingproblems due to lack of a dedicated cargo flight from Tanzania. The current state of affairs hascompelled them to airlift their cargo through Nairobi airport which add extra trucking

costs. Following increased production volumes at the moment, it is possible now to use charter flightservices as the volumes are reported to be sufficient. However, the sustainable solution to thisproblem is being worked out by TAHA through a project to spearhead cargo freight out of

Kilimanjaro International Airport (KIA).

9.5.1 Addressing the Impediments and Challenges in the Sector

Production

The government through the Ministry of Agriculture, Food Security and Cooperatives is providing

resources for the rehabilitation of six government orchards of mother trees which are serving assources of planting materials for farmers and for training purposes. The investment and capacitybuilding needs for horticulture development at district levels are handled through District Agricultural

Development Plans (DADPs) which receive funding from the ASDP basket fund. Rehabilitation of theabandoned district orchards that can also serve as source of improved horticultural planting is animportant investment initiative towards revamping the horticulture industry in the respective districts

that can access ASDP funding through DADPs.

Promotion of contract farming and out grower schemes between large scale growers and smallholder

growers especially in production of flowers and vegetables for export is seen as a valid approach thatwill alleviate the problem of inadequate use of fertilizers and other inputs in horticultural production.To reduce dependence on imported seeds especially for vegetable production, the Ministry incollaboration with the Danish Government has been facilitating the on farm seed production for

vegetable crops. As the project comes to an end in June 2008, the on farm seed production initiativeswill be integrated into DADPs.

Of late there have been deliberate efforts to bring together horticulture sub-sector stakeholders underthe Private-Public Partnership (P-P-P) with the aim of working out the joint strategy to improvehorticulture production in the country. Through such fora, stakeholders get an opportunity to

deliberate, make decisions and recommend workable actions that need to be taken for revamping anddeveloping the sub-sector.

Marketing/agro-processing

The ongoing government initiatives include the establishment of market infrastructure andrehabilitation of rural feeder roads

[31]to promote marketing of horticultural products. Agro-processing

is a basic agenda in the Tanzania Investment Promotion Strategy with an emphasis on processing ofhorticultural produce as a value addition initiative and a move to minimize post-harvest losses forperishable crops.


21/27

SPS issues

The Plant Protection Act of 1997 gives a mandate to the Ministry of Agriculture, Food Security andCooperatives (MAFC) to oversee all aspects pertaining to plant health. The crucial aspects that fallunder MAFC jurisdiction include provision of inspectorate services at all points of entry and exit;

including airports, ports and borderposts. Inspection services offered by these centres aim at

preventing entry/exit of plant pests and diseases into/out of the country. At present, the Ministry isdirecting resources towards strengthening the 30 phytosanitary inspectorate points by providingadequate staff, office building, laboratories and working tools. The Ministry also organizes training to

inspectors that aim at equipping them with adequate skills and knowledge not only on thephytosanitary, quarantine and other PPA issues, but also on SPS issues in relation WTO tradeagreements.

The enforcement of quality and standard as advocated in the WTO trade agreements (the SPS andTBT) needs to be preceded by a thorough comprehension by public including horticultural

producers. This could be achieved through sensitization and training of producers, leaders,technocrats and enforcers. It has been realized that the enforcement of such standards will not be aresponsibility of one institution but rather a joint effort of various public and private sector

institutions[32].

Organic farming

What has been done and achieved towards promoting and sustaining organic farming in Tanzaniaincludes the identification and registration of 40,000 organic farmers and 64,000 hectares under

organic production of different crops including horticultural ones. Efforts are going on in identifying,recruitment and training of local organic inspectors and certifiers to cope with the increasing foodsafety requirements by consumers globally. This goes with strengthening or building the capacity of

TanCert to be an internationally organic accreditation body. The ultimate goal is to simplify theorganic inspection and certification procedures with the view to minimize the costs associated withorganic farming.

High value crops

Various technologies on the production of new high value crops with niche markets abroad have been

collected and documented in the form of booklets and leaflets for distribution to training institutes,farming communities and other horticultural stakeholders. This is going along with the disseminationof market information, collection and assembling germplasm materials for research and multiplication

of quality planting material for distribution to farmers.

9.6 Conclusions and the Way Foward

The constraints analysis above mentions the inadequate application of inputs to be one of the major

reasons for low productivity being experienced in the horticulture sub-sector. Therefore any strategyto revamp horticultural production in the country should adequately address the sub-sector inputs

problems. Although for some years the government has been providing subsidies on inputs (fertilizers,improved seeds and agrochemicals); the subsidized input quantities are small compared with the

actual requirements. Due to inputs subsidy inadequacies, the subsidized inputs are mostly used in theproduction of major traditional cash and food crops. Although the validity of the subsidy programmein terms of its potential benefits to the farmers is being questioned

[33], it is obvious that if well

managed the programme can cause a positive impact on productivity. In order for the non-traditionalcrop sub-sector to also benefit from the inputs subsidy programme, the government should increasethe quantity of subsidized inputs. This should go along with the consolidation of the on-farm seed

production scheme especially for open pollinated vegetable seeds.


22/27

The government should also continue allocating resources for the rehabilitation and maintenance of

government nurseries/orchards to ensure availability of improved and suitable varieties of horticulturalcrops planting materials. The private nursery operators who are at present supplying fruit treeseedlings need to be organized, trained and where possible be facilitated through DADPs to produce

quality planting materials. The government orchards should be centres where the private nursery

operators can access improved germplasm and get trained on nursery operations.

The way forward and towards managing the horticultural marketing issues requires the formulation of

sound and sustainable strategies which should involve formation and strengthening horticultureproducer organizations and infrastructure development. Producer organization is of great importancein managing horticultural marketing problems because through such organizations producers can

easily:

Access services necessary for increasing their volumes of production;

Access marketing information (including the value chain of their produce) and make

valid decisions; Collect, bulk and grade their produce for marketing; Bargain/negotiate for better prices; Improve product qualities to meet market required standards; Access resources for investing in value addition operations, storage facilities; and Contribute to critical development initiatives such as infrastructure development.

District councils should plan and incorporate promotion of horticulture producer organizations andinfrastructure development into District Agricultural Development Plans (DADPs).

The ongoing efforts to entice the private sector to invest in horticultural processing should go togetherwith contract farming promotion initiatives being spearheaded by the government through MAFC.

The contract farming initiatives need to be promoted not only as a raw material supply assurance toprocessors or market assurance to producers; but also as a basic inputs supply assurance tohorticultural producers. Through Marketing Intermediary Management (MIM) arrangements, it has

been realized that smallholder horticultural produces are able to access niche markets throughintermediate companies such as Gomba Estate in Arusha.

Policies should aim at promoting the active private sector to be fully engaged in production,procurement and distribution of horticultural production inputs such as seeds, fertilizers and agro-chemicals. This should include provision of incentives to seed agencies and local horticultural cropsseed producers such as facilitating smooth acquisition of land, taxes relief etc. As a matter of policy,

investments in local manufacturing of quality packaging materials should be encouraged and/or taxeson imported materials should be reduced so as to minimize operational costs to processors andexporters of horticultural products. The Government has a role of creating techno commercial

environment for attracting freighters for airlifting fresh produce to various destinations.

Investments in irrigation at district levels should be given top priorities in the DADPs as a means ofmitigating the problem of environmental degradation associated with the exhaustion of water sourcesresulting from cultivation for horticulture.

Although the role of FDI in enhancing agricultural production and productivity is appreciable asargued in Chapter 3, efforts to get credible foreign investments in the sector seem to be unsuccessfuleven after expensive meetings, seminars, dialogue etc between the Government and foreign investorshave been conducted. What could be done now is to invest in the rural infrastructure development and

to focus on promoting local investments in the sector as an interim measure towards achieving the


23/27

vibrant FDI in agriculture. Investors in sectors other than agriculture wishing to diversify theirinvestment portfolios should be persuaded to invest in agriculture.

The Public-Private-Partnership (P-P-P) spirit in the context of horticulture development recentlyculminated in the establishment of the Horticulture Development Council of Tanzania

(HODECT[34]). The Council draft MOU (May 2007) describes HODECT as an apex of public

private partnership institutions with the goal of promoting the development of horticulture sub-sectorin Tanzania to maximize the economic benefit to the country and its people through the promotion of

production, processing and export. Stakeholders should therefore take a full responsibility to ensurethat the HODECT grows to achieve its aspirations (see Annex 4). The Government should developstrategies that aim at promoting the use of the locally processed products by among others, organizing

producer-consumer fora that aim at promoting the consumption of the locally produced. This shouldbe done in the spirit of Public-Private-Partnership (P-P-P).

The highly dependable EU market for Tanzanias fresh produce is likely becoming fragile if producersand exporters of such products fail to conform to the market stringent food safety and quality standardrequirements as described in chapter 3. Therefore, rather than later, Tanzania should develop nationalplans and strategies for public food safety sensitization and enforcement amongst producers and

exporters of fresh produce so as to sustain the fresh produce business with EU and othercountries. The marketing strategies also need to target the existing fresh produce businessopportunities in domestic and regional markets.

The Ministry of Agriculture, Food Security and Cooperatives should make an inventory of all newcrops with socio-economic potential and establish a museum of these crops at each of its research

centres and orchards. Research and Training department in the Ministry of Agriculture, Food Securityand Cooperatives should develop a non-traditional crop research programme with the focus onhorticultural and new crops to generate local technologies for their promotion. The marketing

promotion strategy for new crops should integrate the value addition aspects.

Finally, although the non-traditional crop sub-sector is at present widely acknowledged for itscontribution to the countrys economic growth, continual lack of accurate data defeats this perception

as it may lead not only to the failure in capturing its actual significance to the economy but also tofailure in the formulation of workable strategies for the sub-sector development. Thereforeinterventions are required to establish a sustainable data collection and dissemination system for all

non-traditional crops, especially under the prevailing smallholder dominated production system. Astudy could be commissioned to find out the modalities on the establishment and management of sucha system. The study should come up with the practical ways for capturing the data for perishable fresh

products with short shelf life.


24/27

References

ACP-EC EPA Negotiations: Joint Report on the all ACP-EC Phase of EPA negotiations, 2003.Brussels, Belgium.

Amani H.K.R, 2005. Making Agriculture Impact on Poverty in Tanzania: The case on Non-Traditional Export Crops. Economic and Social Research Foundation (ESRF), Dar es Salaam.

B.P. Singh, 2002. Non-Traditional Crop Production in Africa for export. In: J.Janick and A.Whipkey

(Eds). Trends in new crops and new uses. ASHS Press, Aleandria V.A.

Bank of Tanzania, 1999. Economic Bulletin for the Quarter ending June 1999 (pp 90).

BluePrint, 2007. Current Status of the Agricultural Economy in the Central Development CorridorProject Area. The inception Report by BluePrint Development Consulting (PTY) Ltd on Tanzania and

Rwanda Agriculture for the Formulation of the Central Development Corridor AgriculturalDevelopment and Investment Strategy. National Development Corporation, Dar es Salaam.

EPOPA, 2004; Basic data on Certified Organic Production and Export in Tanzania.

FAO, 1998; Food Quality and Safety Systems. A training manual of food hygiene and the HazardAnalysis and Critical Control Point (HACCP) system.

FAO, 2001; World Markets for Organic fruits and Vegetables. Opportunities for developing countriesin the production and export of organic horticultural products.

IPPMEDIA, 2007. The Daily Guardian Newspaper, 15th

September, 2007. IPPMEDIA, Dar esSalaam.

ITC, 2002; Export product profile for fresh fruits and vegetables.

Kweka J, 2004. Impact of International Trade Agreements on Tanzanias Trade Performance.Economic and Social Research Foundation (ESRF) and Friedrich Ebert Stiftung (FES), Dar esSalaam.

Mlula A., 2003. Cross Border Trade in Northern Tanzania. The effect of Market ExchangeArrangement and Institutions on Value of Non-Traditional Export Crops.

Mohamed R. and Mwakasungula G, 2007. The Implementation of SPS and TBT Agreements inTanzania. Strengthening National Capacity in Agricultural Trade and Trade Negotiations.GCP/URT/056/IRE. Food and Agriculture Organization of the United Nations, Rome.

Msuya E. and Ashimogo G., 2006. An estimation of technical efficiency in Tanzania SugarcaneProduction: A Case Study of Mtibwa Sugar Company Outgrowers Scheme. Mzumbe University,

Morogoro-Tanzania.

Msuya E., 2007. The Impact of Foreign Direct Investments on Agricultural Productivity and PovertyReduction in Tanzania. Munich Personal RePEc Archive Paper No. 3671. Kyoto University, Japan. Mwasha A.M, 2004. Study on Status of Mushroom marketing in Tanzania. Ministry of Agricultureand Food Security, Dar es Salaam.

Ngwediagi P.; Kishebuka L; and Ngueng-Feze L, 2007. Technical Report on the Implementation ofPlant Breeders Rights, Farmers Rights and Geographical Indications in Tanzania. Strengthening


25/27

National capacity in Agricultural Trade and Trade Negotiations. GCP/URT/056/IRE. Food andAgriculture Organization of the United Nations, Rome.

Nyomola A.M.S, 2005. Status of Horticulture in Tanzania: Towards Speedy Growth of TanzanianEconomy. Paper presented at the National Horticulture S

Date post:	03-Jun-2018
Category:	Documents
Upload:	naresh-kewalramani
View:	226 times
Download:	0 times

Tz Agri Report

Documents