- Published on Monday, 26 August 2013 13:29
- Written by FAUSTINE KAPAMA
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THE agricultural sector is picking up and has been contributing significantly to the gross domestic product and foreign exchange earnings despite facing many challenges, the country’s report on review of food and agricultural policies in Tanzania suggests.
“Agriculture, which in the past ten years has been growing at a rate of about 4.2 per cent annually, makes up a quarter of the (country’s) gross domestic product (GDP) and about 34 per cent of foreign exchange earnings,” says the report launched in Dar es Salaam last week.
According to the report, even when the agriculture has persistently registered a lower growth rate compared to other sectors, it has managed to produce between five and 19 percent above the normal national food requirements for basic cereals.
Presentation of the report follows the implementation of the Monitoring African Food and Agricultural Policies (MAFAP) project that conducted an in-depth analysis of price incentives and disincentives faced by farmers and consumers on nine agricultural commodities for the period between 2005 and 2011.
The MAFAP project in Tanzania was being implemented jointly by Food and Agriculture Organisation (FAO) of the United Nations, the Economic and Social Research Foundation (ESRF) and the Ministry of Agriculture, Food Security and Cooperatives.
However, the findings of the report show that public expenditure to support agriculture has been declining. It says that while the total approved budget for the sector grew by 53 per cent in normal terms from 2007 to 2011, in relative terms it declined.
The decline, the report suggests, was from almost 13 per cent of total government spending in 2007 to about nine per cent in 2011. Actual spending, it says, grew at a slower pace and in relative terms decreased significantly in such period.
“Although public spending was above the Maputo Declaration target from 2007 to 2009, it has remained below the target,” reads part of the report. According to Maputo declaration, African countries are required to allocate at least 10 percent of national budgetary resources each year.
The report reveals further that close to 25 per cent of the budget was allocated to policy administration costs and that at least 50 per cent of public expenditure on the food and agriculture sector came from donor contributions. However, the report notes, there was a diminishing trend in the role of foreign aid during the period analysed.
External aid made up 44 per cent at the agriculture-specific budget and 64 per cent of the rural development budget.
In his address to launch the report, the Minister for Agriculture, Food Security and Cooperatives, Eng. Christopher Chiza, defended the government’s position of allocating seven per cent of the national budget to the sector, saying that was a reasonable achievement to Tanzania.
He expressed the importance of MAFAP in Tanzania, saying as a way of making sure that Tanzanians do not suffer from hunger and farmers get prices for their produces, his ministry was managing warehouse receipt system (WRS) and that of National Food Reserve through agency (NFRA).
“With the NFRA which caters for maize and paddy, food crops are stored after harvest and released when there is food shortage and, or when food crop prices inflate.
This agency is the ministry’s approach to protect consumers through food security and price stabilisation,” he said. He said WRS deals with food crops like maize, paddy, sesame, sunflower, and pigeon peas and cash crops like cashew nuts, coffee and cotton.
Under WRS arrangement, crops are bought from famers after harvest when prices escalate with agreement that additional payments would be made when prices rise.
The minister explained further that crops were then stored in warehouses, until prices go up, by warehouse operators who are mainly the agricultural marketing cooperative societies and other authorized dealers.
“Therefore, the warehouse receipt system ensures that farmers are not penalised by low prices due to production beyond the market absorption capacity at the time of harvesting,” he pointed out.