Three out of four Tanzanian households say agriculture is their main economic activity. Even urban households are still involved in crop production. Indeed, agriculture is an important sector for Tanzania contributing up to 26 per cent of GDP.
Typically, farmers produce to feed their families but they also expect to gain revenue by selling their output. When farmers make more income from the sale of their produce this leads to more development in the rural areas, which ultimately impacts positively on the overall economy. This is what has been surmised from the success stories of predominantly agricultural countries such as Malaysia and Vietnam.
In Tanzania, this kind of impact has not yet been felt - at least not on a tangible scale. Agricultural commercialisation remains marginal in the country as shown by the following statistics from 2011:
• 26 per cent of all farmers did not sell any of their crop and so were not connected to markets.
• Only 25 per cent of farmers sold more than half of their production.
• More than two thirds of maize farmers did not sell any of their harvest and only 25 per cent of total maize production is marketed.
• Uganda and Kenya have similar statistics.On the other hand, Vietnam moved from 48 per cent of farm produce being marketed in 1993 to 87 per cent in 2008.
The livestock sector is even less commercialised than the crop sector. As many as 52 per cent of all livestock owners did not earn any cash income from keeping animals in 2011. Less than 10 per cent of the overall country livestock value is marketed.
The low rate of commercialization may be explained by many factors such as remoteness, low production, low farm-gate prices, high marketing margins, lack of information, or simply the farmers' unwillingness to participate in the market.
Indeed, less than a third of Tanzanian villages have a daily or weekly market where farmers get to sell their produce. For the typical farmer, the closest market is 18 kilometres away from the village centre and more often than not there is seldom any road and/or public transportation service to reach that market.
Farm-gate prices received by farmers are a small share of the wholesale price of crops which averaged around 60 per cent and 45 per cent for maize and paddy respectively in 2011.
Shortcomings in agricultural commercialization raise the following questions:
• Should the government invest more in infrastructure such as roads, village markets,etc., to improve the farmers' connectivity?
• Should there be price controls to make ensure farmers receive a minimum price from their produce?
• Should taxes on agricultural produce be reduced or abolished altogether?
• Can farmers be directly linked to supermarkets, agribusiness firms and processors bypassing marketing middlemen?
• Should the emergence and development of contract farming with large farms be encouraged?
• Will the South Agricultural Corridor Growth of Tanzania (SACGOT) initiative help smallholder farmers increase production and get more cash out of their produce?
• How can the mobile revolution help improve agricultural commercialization
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