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.
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