SAGCOT supports local firms to expand farm product market

ABDUEL ELINAZA

SOUTHERN Agricultural Growth Corridor of Tanzania Catalytic Trust Fund (CTF) Board Chairman, Ambassador Ami Mpungwe (centre), signs a contract with the Managing Director of Movek Development Solutions Ltd, Dr Kefao Mugittu for a grant from SAGCOT Catalytic Fund to boost their activities in Dar es Salaam yesterday. Looking on from left are CTF Business Linkages Coordinator, Abdallah Msambachi, Deputy Permanent Secretary in the Ministry of Industry, Trade and Investment, Joseph Malongo, CTF Executive Secretary, John Kyaruzi and Vanessa Mugeta, a Senior Administrator at Sagcot CTF. (Photo by Staff Photographer)

FIVE local companies have received some 700,000 US dollars (about 1.4bn/-) from the Southern Agricultural Growth Corridor of Tanzania (SAGCOT)’s Catalytic Trust Fund to boost their activities meant to expand market for farm produce from small scale farmers.

The companies, two in dairy, one each in sugar, rice and poultry, qualified for the fund backed by their initiative after coming with proposals to increase agro-product markets.

The catalytic fund, unlike other sources of funds to farmers, charges low interest rate and targets to increase demand for agriculture products hence automatically push up productivity.

Speaking during the soft-handover ceremony, the Deputy Permanent Secretary in the Ministry of Industry, Trade and Investment, Eng Joseph Malongo said the mode of supporting farmers via creating industry demand was an interesting innovation that will boost productivity.

“I like this mode of creating demand for farmers’ good. This is a milestone and many will start to follow,” Eng Malongo said adding that the government was keen in addressing the infrastructure problems to enable farmers reach markets.

He said the five piloting projects act as the catalyst to others and their success would lead to more funds to start flowing for the fund. The fund under SAGCOT—Southern Agricultural Growth Corridor of Tanzania—in the next five years wants some 260 million US dollars for venture capital, matching grant and capacity building.

In 2011 when the Fund was created it received pledges on 95.8 million US dollars form World Bank 70 million US dollars, and USAID 12.5 million US dollars. Others are DIFD of UK 12million US dollars, United Nation Development Programme (UNDP) 0.3 million US dollars and government of Tanzania 1.0 million US dollar.

However so far, according to SAGCOT Catalytic Trust Fund, Chairman Ami Mpungwe, Tanzania’s government is the only member that has settled her pledge in full. He however expressed optimism that soon the World Bank would also fulfil their promise.

“At the beginning of the fund it was planned to start with between 50 and 100 US dollars for the purpose of increasing agro markets through two windows,” Ambassador Mpungwe said.

WB Group Agriculture, Senior Agriculture Specialist, Dr Sarah Anne Simons said the bank would soon settle its pledge after getting an approval from Board of Directors. “We are waiting for the final report of the consultations after Vulnerable Groups Planning Framework (meeting) that took place at the beginning of this month,” Dr Simons told the `Daily News.’

Also the fund, Dr Simons said, will be made available after signing of the project documentation between the government and WB. Catalytic Trust Fund Executive Secretary John Kyaruzi said the main challenge was availability of enough fund to assist realise its vision of increasing agro-products demand.

“We have asked the government to give us the funds so as to create industries....say we establish 10 industries and after they settle we transfer the fund to create another 10 factories,” Mr Kyaruzi said.

The Executive Secretary also said another challenge was road infrastructure in farm areas which create difficulties on collecting farmers’ products on time. “At large the supply side is weak and our smallholder farmers are not able to meet demands,” Mr Kyaruzi said.

ASAS Dairies, Milk Procurement and Dairy Business Development Manager, Roy Omulo said the market for the dairy products was huge as farmers cannot produce enough to meet growing demand.

“Lack of smallholder capacity means they only supply 23 per cent of the required milk per day to ASAS for processing, leaving 77 per cent additional potential,” Mr Omulo said. Smallholders need chilling collecting points which at the moment are very few leaving their produce to perish which discourage them from increasing productivity.

Muvek Development Solutions Ltd, Dr Kefas Mugittu said they have created a ready market for chicken eggs for more that 2,500 farmers in Njombe where there are now producing between 80,000 and 120,000 eggs a month.

“We have branded our eggs and most are sold in supermarkets and groceries in Dar es Salaam. We have entered into a special contract with these poultry keepers,” Dr Muggitu said.