Tanzania: Investing in Tomato Value Chain for Access to New Markets

TOMATO is one of the highest produced vegetable crops in Tanzania due to its status as a staple and economic horticultural activity for smallholder and commercial farmers across the country.

According to Sokoine University of Agriculture (SUA), sudden increase in tomato production is

attributed to easier access to markets and better prospects compared to other traditional crops.

However, despite its promising prospects, tomato farmers are often faced with a number of obstacles in the marketing and production of the crop.

The main challenges are attributed to high production costs and the crop's perishable nature which affects the farmers' earnings.

In addition, many actors are involved from production to consumption (middlemen) which leads to loss of income for farmers and hiked prices for consumers.

Despite the challenges, there are a number of existing cooperatives and unions that have tried to support and advance the tomato value chain and its markets.

For instance, the 'Tomato Partnership' was established in 2015 through SAGCOT, its primary focus was to expand and optimize the tomato value chain and access to markets by forming a coalition with different partners to mobilise and assist more than 10,000 smallholder farmers in Iringa and Njombe regions.

The partnership included a number of interventions to ensure best practice which included linking farmers with financial institutions to ensure access to proper irrigation equipment, education on the negative impacts of improper agro-chemical applications, capacity building of farmers to improve financial literacy and developing linkages to address the current lack of coordination between tomato value-chain actors.

World Bank said there are two major markets for tomatoes in Tanzania, which include fresh and processed tomato products.

The market for fresh tomatoes which commands a higher price and is more attractive for smallholder farmers is largely untapped with a growth rate of 15 per cent, while commercial farmers find it profitable to sell tomatoes to processors which are pegged to grow at 17 per cent by displacing imports.

The untapped potential for fresh tomatoes presents an opportunity to scale its production for export.

This will, however, require investments in cold storage, irrigation systems, greenhouses, an efficient transport network, as well as education in pesticide management and introduction of innovative financial methods to farmers that will ensure stable income generation during the peak and off seasons.

Over the last decade, the production of tomatoes has almost doubled. According to the World Bank, annual consumption of fresh tomatoes stands at 420,000 tons with a domestic growth rate of 15 per cent.

Despite the growing local demand, there tends to be an oversupply of tomatoes in Tanzania which presents an opportunity for the country to pursue export to regional markets such as SADC and the EAC to strategically located countries like Malawi, Mozambique, Z ambia, Kenya and Rwanda.

For instance, Tanzania tomato researchers have perceived unmet demand in Malawi. There is evidence of Tanzanian produce in Malawi which is only 100km away from Mbeya and easily accessible through the TAZ ARA railway.

Statistics indicate that demand has consistently grown between 2006 and 2013 at an annual rate of 13 per cent.

Additionally, World Bank statistics have revealed Kenya and Rwanda as Tanzania's frequent large trading partners of fresh tomato produce with over 2,000 tonnes in exports.

Evidence suggests that traders from Comoros and Congo occasionally source fresh tomatoes from Tanzania when there is a shortfall in local production.

With the growth of the horticulture sector and as one of the most consumed vegetables, it is imperative to support the tomato industry in the country.

In this regard, Public-Private Partnerships (PPPs) are vital as they have the ability to raise tomato production and support the value chain.

For example, in Central America, horticulture farmers struggled with sustainable vegetable production throughout the year due to unpredictable rainfall, insufficient water resources and high prices for agricultural inputs. Through PPPs, farmers were able to invest in establishing low-cost greenhouses.

Greenhouses allow crops to grow in a controlled environment, which offers protection from insects, extreme temperatures, and accelerates growth.

Under such conditions, farmers in Central America were able to achieve higher levels of production and quality.

In Tanzania, there are now over 40 low-cost greenhouses that adopted the Central America system for producing sweet pepper and tomato, which have seemingly contributed to higher production levels in the country.

However, the need for increased investment remains if Tanzania is to exploit the international markets and benefit from greater foreign exchange earnings through its horticulture exports.