TANZANIA agriculture products have to be competitive enough to penetrate the regional and international markets.
This is a key prerequisite should the
country want to diversify its economy portfolio by leaning on
agriculture sector. And for this to succeed, motivation has to go hand
in hand in changing old habits, especially in seed, inputs usage, to
help spurring agricultural productivity.
The sector can be motivating through
business mind-set that will not only support to accelerate the
development of the agricultural sector and provide foreign exchange for
the country, but also create a base that would produce needed raw
material to meet growing industrial demand.
This will also open a labour demand door.
Therefore, diversifying the economy away
from mining and tourism sectors that has been an important sector in
term of government fiscal policy is a key concern.
The attention, under this scenario, has to shift to making agriculture and value-adding manufacturing export more competitive.
For instance, government efforts in
creating an environment that would help to diversify the country’s
economy and revenue away from current foreign earning sectors has failed
to address this challenge at the moment.
The challenges centred on strategic
financial institution that have been mandated to catapult activities
within the sector’s value chain failed to address the issue of loaning
to farmers and come up with products specifically to reach peasants—a
vital for the success of any export business regionally and
internationally.
The fact is agricultural products
constitute the bulk of Tanzania potential foreign earning. However,
agro-product need to comply with a number of regulations before allowed
entry in competitive markets.
This to date remains at cross road. To
address this challenge the mandated ministry and agencies should fully
understand the targeted market’s legal requirements before the country
agro-export opportunity becomes unlimited.
Those who tasked to spearheading these
issues don’t realise that understanding is one thing, but must be
followed by compliance and marketing initiatives.
It is the compliance and marketing
strategy that gives a country an entry guarantee to a given market and
not politics. Good market penetration needs effective branding and
packaging material at one hand and adequate financing from banks and
government support at the other hand.
Thus if as country remained determined to
ensure the Agricultural Sector Development Programme phase two (ASDPII)
benefit actors involved in this sector, the two, understating legal
requirements and financing are key preconditions to achieve the ASPDII.
Nevertheless, several challenges need to
be ironed out in order to expand the country’s export opportunities for
the economy to contribute to structural change and help stimulate
agricultural sector growth, which are vital for sustaining economic
growth and development.
Research carried to date in an attempt to
ascertain what the requirements for niche markets are, indicates that as
far as Tanzania is concern effort should be directed to the following
area.
One: packaging. The world of products
marketing is the world of appearance. There is no witchcraft on these
issues. Like the typical physicist or materialist, the consumer whether
in Tanzania or elsewhere believes in what he/she sees, feels, touches or
perceives.
The consumer tends to look at the physical
attributes of a product first before considering whether it meets the
standards or not. In this area, I am disappointed to say, we aren’t
there yet when compared to our colleagues. We need more effort to
strengthen packaging and the way we wrap our products.
Two: The international market that is very
competitive is based on standard and reliability. As country, there is a
need to meet the standard before our goods can go far. We shouldn’t
mislead ourselves; standard and reliability are the key in export
business. I am aware of green beans, avocado and very few other fresh
crops that leaves from production i.e. farm site to shelves in Western
Europe supermarkets.
Studies carried in 2008-2009 and
2016-2017, in attempt to examine Tanzania competitiveness when compared
to Uganda, Burundi, Rwanda, Kenya, Zambia, Mozambique and Malawi
indicates that Tanzania has so much to offer that could earn the country
substantive foreign earning and also advance the lives of producers if
assisted to uplift their harvest in line with what market need.
In penetrating markets and lasting stead,
one need to understand that competitiveness is being able to give a
project that can beat your competitors and the capacity to cope with the
standard and persistent demand of the international market.
What many especially office- bearers don’t
understand is that when you try to enter a given market unprepared and
your product is rejected, it will be too expensive to repatriate
products already exported but also embarrassing and discouraging.
The issues of undesirable materials in
cotton and cashew nuts that were reported in the media recently are a
clear example of a shame. Three: Value addition, for a product to be
export competitive, the exporters should add value to their products,
embrace innovation and technology, while ensuring that their product are
desirous of competing favourably in the regional and international
market.
I have to acknowledge, I was pleased some
years back when I found wine from Cetawico, trading as presidential and
ambassador reserve, the wine is competing in price terms with French
wines at supermarkets in Italy.
I am also glad, to concede Archard Kato,
promoter of Alko vintage company, a wine maker in inspiring Tanzanian
wine, at one time supporting more than 900 grape farmers direct and
indirectly in Dodoma. Value addition is what will give Tanzania credit
and respect in the face of its competitors.
About 90 per cent of the total Tanzania’s
cashew export is exported raw. As a country we praise ourselves for
exporting so much and even considered to put cashew as first crop to be
traded through commodity exchange, soon to take place. I wish we could
understand what additional revenue Tanzania could net by having value
addition just in cashew.
Potential revenue loss incurred by
exporting raw cashew is huge. The cashew nut raw export I wouldn’t like
to discuss in this article how much we continue to loose, but let us
open our eyes on this crop.
After all, cashew grown in Tanzania, due
to its tree maturity and its organic in nature is trusted to be the best
in the market. The better term is not to concentrate on short-term
earning, but multiplier effect that can be created by processing it
locally of course within international standard levels. Seriously as a
nation, let us ascertain within these ten years of implementing ASDPII
what creativity can be put on cashew and other agro-products value
addition.
Four: Logistics weakness apart from prices
competitiveness is furthermore a major challenge to the success of the
agro-export export campaign. This is an area I believe we are still
lagging behind.
This is an area where private sector could
work up and provide their support by ensuring modern warehouses are in
place to support commodity exchange mercantile.
For local government authorities, these
facilities could also be revenue generating sources in the near future
selected crops will be traded via these warehouses.
On top of that we currently do not have a
good commercial cold chain infrastructure in the country. The costs of
logistics are also very high.
It is cheaper to transport a commodity to
international market possibly through neighbouring exits than to
transport same commodity within the Tanzania. Let us think of
post-harvest loss for cassava, mangoes, pineapples, tomatoes etc.
Is private sector not seeing this
opportunity? There are more genuinely opportunities to give good return
on investment than thinking on investment on guest houses, buses, just
to mention a few.
Think of what happens after few days of
heavy rainfalls most farming areas and markets becomes totally
impassable and this has continued to impact negatively on the prices of
food items across the country.
How Tanzania processed harvest is faring
in international market? Generally, this is a tough question but access
to market, good market penetration on the part of the exporter is
important to export competitiveness by providing harvests that can beat
that of other competitors.
Access to the international market is very
thought-provoking due to variety of potential differences in culture,
political and economic environments and regulations between domestic
market and international markets.
But even with these challenges, taking
business international can provide numerous benefits including new
opportunities and increased sales volumes.
Why it matters to me as a Tanzanian? Well,
in my opinion, the country can only realise its export potential and
diversify its revenue through agriculture when its products can compete
favourably with other products in the international market.
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