Transcript Agricultural Performance1-msambichaka-23-feb-2010

Analysis of the Performance of Agriculture
Sector and its Contribution to Economic
Growth and Poverty Reduction
Draft Report
Prepared by
Economics Department
University of Dar-es-Salaam
Sunday, April 10,
2016
Content
Objectives of the Study
Methodology
Summary of the Major Findings
Emerging Issues and
Recommendations
Sunday, April 10,
2016
Objectives
(1)
Overall objective is to assess performance of
agriculture by identifying the critical factors
that determine
The sector growth and
The sector contribution to reduction of poverty
In addition, the study makes an
assessment of existing policies and as
well as recommendations for
improvement
Sunday, April 10,
2016
Objectives
(2)
Specifically this enquiry has addressed the following
components
Assess the contribution of agricultural interventions such as
irrigation and inputs support in improving productivity and
livelihoods;
Assess contribution of selected sectors (land, Trade,
Industry and Marketing, infrastructure, finance) to
agricultural growth;
Assess the contribution of small-scale agriculture to
poverty reduction and the constraints faced by small scale
farmers;
Make comparison of the experience of other countries where
initiatives in the agricultural sector have lead to poverty
reduction and increased agricultural growth;
Sunday, April 10,
2016
Objectives
(3)
Assess the constraints for increased investment in
large scale farming;
Assess the private sector participation in
agriculture by examining reasons for weak
engagement;
Assess the long term agricultural productivity and
ways of scaling up public and private investments
in the sector, including possible options of PPP
and promotion of agri-business;
Assess the levels of public investment compared
to national budget and levels of private
investment;
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2016
Objectives
(4)
Assess and analyse the bottlenecks
hindering development of agri-business
and in particular investment in large scale
agro-processing; agro-industrial parks and
cottage industries;
Assess the response to commodity boom
(growth) and the associated multiplier
effect towards poverty reduction;
Sunday, April 10,
2016
Methodology
(1)
Quantitative and qualitative data
Source
Official publications e.g. HBS, Agricultural
Census, Economic Surveys, PHDR, BoT etc.
Interviews with Stakeholders
Visited 5 Agricultural related projects namely,
TAHA; Climate Change Adaptation Project in
Same District; Dunduliza Programme under
FISEDA Warehousing Receipt System);
Warehosung Receipt System – Tandahimba
District; NARI – Naliendele; and AMAGRO
Sunday, April 10,
2016
Methodology
(2)
Data Analysis:
Computation of indices such as poverty
indices, crop yields per hectare, and growth
rates have been made
Simple econometric analysis to compute
growth rates
The trend analysis and comparative analysis
Cross tabulation was also used to examine
correlation between variables
Sunday, April 10,
2016
Summary of Major Findings
(1)
The total land area is 95.5 million hectares, out
which the area cultivated accounts for 10.6% or
23% of the total arable land
The number and sizes of Medium and Large scale
farms is yet to be established
But it is known that these farmers occupy a total
of 1.5 million hectares
A big proportion of commodities (tea, sugar cane,
sisal, coffee, tobacco and some food crops ) in this
country are produced by these farmers
Sunday, April 10,
2016
Summary of Major Findings
(2)
Total area suitable for irrigation is 29.4 m ha, but
only 289,245 ha is put to use
Indicates a seriously low productivity in
agriculture
Challenges facing the agricultural sector in
Tanzania make it difficult for farmers to invest in
the sector
Infrastructure, Markets, Agricultural experts/Ext
services, low farm gate prices, storage facilities
etc do not provide incentive to a farmer to
expand investment in the sector
Sunday, April 10,
2016
Summary of Major Findings
(3)
Private investors are not keen in investing in the
provision of public goods and services eg
Infrastructure and Agricultural experts/Ext
services, because they cannot exclusively
internalize all the benefits
Despite its importance, agriculture budget share is
still small compared to the share going to some
other MDAs
Despite being small, an increase from 1.6% in
2008/09 to 2.4% in 2009/10 does not necessarily
mean a significant part reached farmers
Sunday, April 10,
2016
Summary of Major Findings
(4)
Fertilizer consumption in Tanzania lags far behind
its supply and potential demand, thus creating an
artificial surplus of about 40% (ss/consump ratio)
Total requirement of improved seed is 120,000
tons annually, while annual supply averages
10,000 tons or 8% of total requirement (a supply
constraint)
Investment in capital goods in agriculture is still at
a very low level which affects productivity
Current stock is 15500 Vs 9500 (61%) currently
operational
Sunday, April 10,
2016
Summary of Major Findings
(5)
Annual tractor replacement stands at 1000 – 1500
Vs the current 250-400 tractors per annum
The country imports 2 million of hand hoes
annually because it is dominant farm implement
Yet, all the factories used to manufacture hand hoes in
the country are not running
Records show that Research and Development
(R&D) institutions are underfunded
The “neglect” in financing R&D suggests that
we will be obliged to depend on “Imported
Green Revolution”, instead of “Local Green
Revolution”
Sunday, April 10,
2016
Summary of Major Findings
(6)
Farmers Education/Training Centers (Folk Development
Colleges) which we used to have in some Regions of
Tanzania are not there anymore
They were important centers for propagating functional
agricultural education “Education is a productivity factor” in
development
Examination of potential contribution of agriculture to
poverty reduction
Made some assumptions
Used top performance data from different countries
around the world
Considered 3 food crops (ma, pa, and sorg) and 3 cash
crops (Te, Co, and Cas)
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2016
Summary of Major Findings
(7)
4 Scenarios (Potential Rates) were tested
Producing
Producing
Producing
Producing
at
at
at
at
full capacity (100%)
75% capacity
50% capacity
25% capacity
The results indicate that GDP has substantially
increased at any level of potential rate
Both the potential per capita GDP and that of per
day indicate that they are above the poverty line
at any level of potential rate
Note that, many products including livestock has
not been included
Sunday, April 10,
2016
Summary of Major Findings
(8)
The potential from agro processing has also not
been included. All this shows that our GDP is
artificially low AND ACTIONS NEED TO BE TAKEN
NOW!
Let Strong-Pro-Farm Policies be the drivers of
sustainable agricultural development in Tanzania
Since agricultural GDP share is currently about
25%, growth of agricultural sector no longer
influence substantially the growth rate of GDP
(like services – 46% and industry – 20%)
As in the 1970s and 1980s when it was contributing
about 50% to total GDP
Sunday, April 10,
2016
Summary of Major Findings
(9)
Agriculture grows at an average rate of 4.8%
annually (2000 - 2008)
While GDP has been fluctuating around 7%
Thus, to a large extent GDP growth rate has been
significantly determined by the growth rate in the
services sector (7.4%) and industry (9.3%)
Therefore, economic growth in Tanzania is not
associated with poverty reduction which is high in
rural agriculture supporting 74% of total
population
Contribution of agricultural related projects to
economic growth and livelihoods
Sunday, April 10,
2016
Challenges, Emerging Issues and
Recommendations
(1)
To accelerate the rate of growth of output in the
agricultural sector, and increase the pace of
poverty reduction it is necessary to:
Address the problem of low productivity
Adopt DELIBERATLY STRONG-PRO-FARM POLICIES
Sunday, April 10,
2016
Challenges, Emerging Issues and
Recommendations
(2)
Promote Local Green Revolution by way of
addressing the following:
Increase the intensity use of fertilizer and improved
seeds and subsidize agricultural inputs
Improve extension services -number of extension staff,
and working conditions
Increase the allocation of funds for Research and
Development
Sunday, April 10,
2016
Challenges, Emerging Issues and
Recommendations
(2) cont…
Re-introduce Farmers Training Centres (FTCs) / Folk
Development Colleges (FDCs) for propagating farmers’
functional education
Reduce bureaucracy and red tape which usually increases
the cost of doing business in order to attract private
investment in the agricultural sector
Create conducive environment for private sector
participation and offering incentives to attract private
investment in agro-processing
Increase public investment in irrigation and other related
infrastructure such as dams, water harvesting facilities etc
Sunday, April 10,
2016
Challenges, Emerging Issues and
Recommendations
(2)
cont…
Support the promotion of rural financial institutions which
will act as intermediaries for savings and investment in rural
areas
Support the promotion of Non Farm Activities by
strengthening Small Industries Development Organizations
(SIDO) and other rural institutions
Improve rural Infrastructure e.g. road network, rural
electrification etc.
Scale up resource allocation for agriculture (Public and
Private)
Ensure availability of Capital Equipment for Agriculture
Sunday, April 10,
2016
Possible Outcome of the
Domestic Green Revolution
Job opportunities created through e.g.
Non Farm Activities
Small Industries such as agro processing
Research and Training
Commercial farms
Increased Farm Incomes
Improved Domestic GDP
Reduced number of people living below the poverty line
Improved livelihoods and welfare of rural population
Sustainable Local Green Revolution initiative (unlike
projects)
Sunday, April 10,
2016
Thank You All
Sunday, April 10,
2016