Yes, huge agriculture budget in FY 2022/23 but the sector’s challenges remain

Yes, huge agriculture budget in FY 2022/23 but the sector’s challenges remain

Whilst local media and social network platforms from 14th June 2022 are absorbing the government’s 2022/23 budget which was presented in the Parliament in Dodoma by Dr Mwigulu Nchemba (MP) with views such as What govt will do to control spending or “cost-cutting budget” or “we have heard you” or VAT scrapped for fertiliser, gas cylinder, sisal twines,  and others showing govt.

Cuts travel meetings, tasks officials to care for their vehicles and high school fees scrapped in the pro-poor budget, agriculture, fisheries, energy top 2022/23 budget priorities etc., in additional reading the entire budget text, the budget set aside for agriculture sector, from Tsh.294 billion to Tsh.954billion wedged my thoughtfulness on challenges, prospects and what could be the exit for the sector to pay back such historical budget allocation.

Echoing the previous contribution made here, the true government's intention to see the agriculture sector growing by 10% by 2030 reaffirms the government’s intention to truly view and take the agriculture sector seriously as compared to the previous year’s budget.

Over the past three decades, records indicate that the government had initiated a plethora of policies and programmes which were aimed at restoring the agricultural sector to its pride of place in the economy.

Efforts to indorse stern investment and to increase export diversification aren’t new perhaps explaining why the agricultural sector has not yielded appreciable dividends to government fiscal.

Huge investment and export broadening potentials for generating higher growth in the economy as a result in my view have remained unlocked and unexploited in the agriculture due to a host of constricting factors that must be removed if aim to quadruple budget allocation during 2022/23 national budget to the sector to be realised.

From an economic and investment point of view, would like to revisit those constraints factors that do believe need close attention while at the same time attempting to proffering policy prescriptions that if implemented could fast track the attainment of poverty reduction and rapid economic development in Tanzania through agriculture sector.

Undeniably agricultural development is considered to hold the key to economic development for most Sub-Saharan countries including Tanzania. In Tanzania, numerous sectors support the total output of the economy easily grouped into major sectors, such as agriculture, manufacturing, and services.

The agricultural sector that is the focus given the budget allocated to it in this year’s budget is further disaggregated into crop production, livestock, forestry, and fishing. Well-coordinated and developed, these segments can help to catapult the national economy to the next level as historical records may explain themselves.

Thus, why this year’s budget in my view has recognised that in Tanzania, agriculture is pivotal to economic development and more of the efforts to revive the economy, and significantly reduce the level of poverty, should be devoted to revamping meaningfully the agricultural sector by ensuring the sector has all resources it needs.

Agricultural export commodities such as sisal, cocoa, rubber, cotton, groundnut and coffee to mention a few played a prominent role in economic development by providing the not only needed foreign exchange for capital development projects but employment opportunities and suppliers of raw materials.

It is not my goal to deep dive into the historical event but seeing this year’s budget for the sector prompt my reflection on enormous efforts by the government to reposition agriculture to its prime of the place of providing food for the human consumption and raw materials for industrial needs, as well as generating foreign exchange earnings, and employment for the especially young population.

Above all, the country must maintain equilibrium between the raw materials requirements of industries, human consumption needs and the capacity of agriculture to supply the raw materials.

While cheering up for handsome budget sharing it is important to remind ourselves that from the perspective of sustainable agricultural growth and development in Tanzania, one of the fundamental constraints is the peasant nature of the production system, with its low productivity, poor response to technology adoption strategies and poor returns on investment.

It is known that agricultural commercialization and investment are the key strategies for promoting accelerated modernization, sustainable growth and development and, hence, poverty reduction in the sector.

But, to attract serious investment into agriculture, it is imperative that those constraints inhibiting the performance of the sector are first identified to unlock them and create a conducive investment climate in the sector and as of now that will attract young people.

The development challenges of Tanzania’s agriculture are, thus, those of properly identifying and classifying the growth and development constraints of the sector, unlocking them and then evolving appropriate strategies for promoting accelerated commercialization and investment in the sector such that, in the final analysis, agriculture will become one of the most important growth points in the economy of Tanzania.

Because of the investment and export diversification potential of agricultural commodities that have not been fully exploited in Tanzania, some questions may be asked. What are the new constraints to the agricultural development frontier in Tanzania? What policy strategies should be executed to improve the performance of agriculture productivity? What incentives will lure young people to enter the sector in addition to the commonly known cost of loans?

Today’s contribution will focus on the challenges and potentials of agriculture in Tanzania to provide realistic policy recommendations to accelerate the performance and productivity of agriculture in Tanzania.

A foundation that came from next year’s budget and years after can be used to gauge achievements made in transforming and taking agriculture to the next level. Concisely, I will share what I do believe is the potential of agriculture that should attract private investment with policy consequences and suggestions strategies for realising the development goals of the agricultural sector of the economy.

Identification of constraints in the agricultural sector is an essential step to exposing the factors inhibiting performance and productivity of the sector toward designing realistic policy strategies that would create not only a conducive setting for promoting but accelerated commercialization and growth of the sector.

While marketing issues, the lack of adequate storage and processing facilities and technical constraint in Tanzania are known to affect both the upstream and the downstream segment of agriculture is well known that poor government support and inadequate strategy prevent the emergence of innovations from research institutes, thereby curtailing the level of available technically feasible and efficient agricultural practices. Even when they are available, there seem to be communication gaps between farmers' end-users of research efforts and the researchers.

Earlier attempts at improving agricultural production in Tanzania such as kilimo cha Kufa na kupona, Kilimo kwanza etc. and other heroic interventions in the agricultural sector in my view underlined increased production without equal efforts at post-harvest management and industrial utilization.

Most of them handled the various aspects of the post-harvest system such as processing, packaging, marketing, storage, distribution and transportation in isolation.

There was no effort to make the system comprehensive and holistic in its management and coordination. It is sad to state that each programme when closely examined followed haphazard execution that creates more problems without achieving anticipated goals.

In all these challenges, one constraint that needs serious rethinking is an incentive to attract investments, crop and livestock production, fish production, inputs supply and processing of farm produce for domestic and export markets etc. In export markets, the possibilities provided by AGOA should now onwards be seriously explored.

Much as quality and standards are at the centre of the generalized system of preference, which confers lesser tariffs on a large number of products entering the U.S. market there is nevertheless, the need to educate Tanzanian entrepreneurs, especially young ones on the conditionalities of AGOA and other markets, to enable them to take advantage of the high export prospects offered by-products such as ginger, sesame, cashew, leather and skins, African honey, flowers, spices and vegetables. The export trade in these commodities in my view provides opportunities for private sector initiatives.

Within issues briefly cited above, this year’s budget share to agriculture will set the ground for sector improvement if a firm solution to identified constraints in marketing problems, infrastructure inadequacies, unstable input, and output prices etc., can seriously be found commercially without drawing in “politics” for sake of it.

The capacities for domestic and foreign investment in different agricultural enterprises in the different areas of Tanzania are high, given the large populace size of the country, the availability of fertile arable land, and the prospect to earn good returns from investment. This will floor a solid foundation for broadening of revenue sources for government fiscal, increased revenue, increase employment generation and overall poverty reduction in Tanzania.


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