In mid August 2014, the government of Tanzania “appealed to individual traders and agencies to buy and export surplus maize following bumper harvests” in certain regions. Farmers’ leaders in the Ruvuma region have expressed concerns that much of the 300,000 tonnes of maize harvest in the region could spoil if markets were not found.
Some commentators have argued that farmers lack “knowledge on the procedures needed to export the produce”, while the government’s capacity to purchase the maize is limited. This season Tanzania’s National Food Reserve Agency (NFRA) targeted purchases of “only 40,000 tonnes from the Ruvuma, Iringa, Njombe, Rikwa and Mbeya regions”. The government is however working with farmers to help them find markets outside the country and understand market requirements.
Government officials said that “doors are open for local traders to buy and sell maize to neighbouring countries… all the documents are available at our office, interested buyers can visit us to get the procedures.” Government officials have identified markets for Tanzanian maize in Kenya, Sudan and the DRC. However, in the preceding weeks, the District Commissioner for Songea District had warned small-scale farmers against selling maize to local brokers, since these offered low prices and made high marks-up when selling to consumers. He advised farmers that all “agricultural surplus crops should be sold directly to the national food Reserve Agency.”
Ruvuma farmers are reported to be working with the Tanzania Chamber of Commerce, Industry and Agriculture (TCCIA) in an effort to sell thousands of tonnes of maize to the DRC.
These developments need to be seen against the background of warnings that “some 20 million people are facing acute food insecurity in eastern and central Africa” (up from 15.8 million in July 2013). The East and Central Africa Food Security and Nutrition Group, a multi-stakeholder forum, issued warnings that the situation could deteriorate still further “in the absence of quick action”.
The Chief Executive of the Southern Agricultural Growth Corridor of Tanzania (SAGCOT) highlighted the efforts made to boost production through the provision of quality seeds and fertilisers, but stressed that there also needed to be a plan “to ensure that there are reliable markets for [farmers’] produce.”
A report from Business Monitor International meanwhile suggests there are structural problems facing Tanzania in its efforts to become a competitive regional maize supplier, despite the immense opportunities potentially available. Representatives of the Tanzania Exporters Association implied that government administrative arrangements were not geared towards supporting exports, with difficulties, for example, in obtaining export permits.
The report called for a review of the government’s export policy with a view to stimulating regional trade, taking into account the capacity constraints of farmers, particularly literacy levels. It also highlighted the scope for TCCIA to organise producers, traders and transporters into “business clubs to be targeted for training on how to utilise immense opportunities lying within the [East African Community Market]”.
The establishment of decentralised information systems to help traders to access information requirements for cross-border trade would appear to be essential to reduce transaction costs for small-scale operators. At present, the centralisation of these functions makes the development of intra-regional trade an expensive and time-consuming process for smaller-scale operators, and a thorough review of both government policy and also operational procedures would appear to be required.
Considerable scope would also appear to exist for cooperation between government departments and the TCCIA in the delivery of the required trade-related information to farmers in surplus production zones – concerning everything from facilitating access to export permits and SPS certificates to identifying markets and brokering contracts.
The World Bank, meanwhile, is currently working to establish operational modalities for reducing the costs of small-scale trade across borders in Eastern and Southern Africa. Currently smaller-scale traders face disproportionately higher costs than large-scale operators in engaging in cross-border transactions, with this constituting a major disincentive to increased intra-regional trade in cereals (see Agritrade article ‘Scope for attracting informal cereals trade into the formal sector’, forthcoming 2014).
Although efforts are under way in Tanzania to facilitate the export of grains, engagement by wider regional stakeholders would appear to be essential. This includes such bodies as the Eastern Africa Grain Council and the East African Business Council. The regional stakeholders need to get to grips with issues as diverse as:
- establishing quality standards for regionally traded grain (particular with regard to aflatoxin levels);
- simplifying and decentralising administration of exports;
- implementing codes of conduct for the treatment of cross-border traders by government officials.
Since much intra-regional trade is informal, there would also appear to be a need to revive and build on the COMESA Cross-Border Trade Association (CBTA) initiative and similar institutions in the region.