US $42.3 million project targets small farmers

The United Nations' International Fund for Agricultural Development (IFAD) announced on Tuesday that it will provide more than US $16 million in loans to support the development of smallholder agriculture in Tanzania.

The 'Agricultural Marketing Systems Development Programme' it is to support aims to improve the lives of 4.4 million smallholder producers, traders and processors in the north and south of the country, IFAD said.

Both areas have a predominance of poorer rural households, with an average income below Tanzania's national average, it added.

"[The] potential for improvement in small farmer incomes and production is enormous if greater market efficiency and effectiveness is achieved," according to IFAD.

The agency's agreement to support the US $42.3 million project was signed on Tuesday at the Rome headquarters of IFAD by the Tanzanian Ambassador to Italy, Ricky Costa Mahalu, and IFAD Assistant President, Klemens van de Sand. The African Development Bank and the Irish government are also funding the project.

According to IFAD, smallholders in Tanzania have suffered poverty at least partly due to the absence of a conducive marketing policy environment; poor market information and communication systems; inadequate market infrastructures; and a shortage of investment and working capital.

"All those factors have combined to heavily depress the value of output and income received by small farmers," it said.

Agriculture is one of the priority sectors for Tanzania under its national Poverty Reduction Strategy Paper (PRSP). The government wants to correct the performance of the sector, which has been "sluggish and virtually static" compared to its potential, the Economist Intelligence Unit (EIU) reported in November.

The root cause of difficulties in agriculture has been identified as a poor incentive structure, the organisation said in its November 2001 country report for Tanzania.

The government in November published a new strategy paper for agricultural development, which is intended to stimulate growth in the sector and thereby help reduce rural poverty. Its medium-term objectives are to enable agriculture increase farm incomes, improve rural food security and boost national economic development through tapping the substantial growth potential of the sector.

Tanzania, it said, has a large untapped land resource, offering "virtually unlimited expansion and diversification in crop and livestock production", but has been hindered by a reliance on hand hoes as the main cultivating tool.

In the short run, according to the strategy paper, the most practical approach to increasing agricultural production is to focus on labour productivity, especially among small-scale subsistence farmers who dominate the sector, and to try to boost it through greater use of affordable technologies.

Full report at www.irinnews.org/report.asp?ReportID=15938

The IFAD-sponsored programme aims to raise smallholder incomes by improving the structure and performance of agricultural marketing systems in the country, and to reduce the vulnerability of smallholders by reducing their reliance on just one or two crops.

The Tanzanian economy is heavily dependent on agriculture, which, in 1999, accounted for 46 percent of GDP and employed an estimated four-fifths of the workforce, mostly in subsistence and smallholder cash cropping.

"The overarching government objective is poverty reduction and this calls for strategies that are capable of raising the incomes and living standards of a large proportion of the rural population in the relatively near future," according to the government's strategy paper on agriculture.

However, if the economy is to achieve the rates of growth necessary to significantly reduce poverty, "the performance of the agricultural sector, upon which the overall economy remains extremely dependent, will have to improve," according to the EIU.