Evaluation of Farmers and Traders Field Surveys

Table 11 summarises the results from questioning the farmers in Mbeya and Rukwa Regions as well as some interviews conducted in Dar es Salaam that gave the farmers’ point of view.

Source: Own compilation (2009).

As strengths on an internal level farmers have the experience with coffee operatives, access to storage facilities, and high yields. Although most existing co-operatives are related to coffee marketing, the experience with co-co-operatives is identified as strength as the knowledge of self-organisation can be used for the establishment of co-operatives for marketing food staples. The majority of farmers questioned stated that they had access to storage facilities. Most of them mentioned

Table 11: SWOT Analysis from Farmers’ Point of View

Strengths Weaknesses

Experience with coffee co-operatives Access to storage facilities Yields above national level

Low rate of membership in food crop co-operatives

Low level of technology use Partly decreasing production

Extension services at community level NFRA buys at high prices Favourable climatic conditions

Potentials for Irrigation

Insufficient extension service at the village level

Unpredictability of NFRA activities Limited and insufficient market access

Missing access to credit Export Control Act

66 Assessment of the Field Survey Results that facilities were sufficient to store their own harvest. This is seen as strength, as storage facilities are an important precondition to allow farmers to sell their produce in the lean season when prices might be higher. Furthermore, it was found that average yields in Mbeya and Rukwa Regions are generally above the national level.

This is seen as strength as it might indicate more favourable production conditions in both regions compared with other regions in Tanzania.

The low rate of membership in food crop co-operatives, the low level of technology use and decreasing production within recent years are found as weaknesses.

Marketing of products is often a crucial problem in rural areas. Therefore, the low rate of farmers organised into food crop co-operatives is evaluated as a weakness. Also, the low technology level used for cultivation is seen as a weakness as it might hinder farmers from increasing production. Some farmers even mentioned that production had decreased for a couple of years, due to a lack of knowledge on how to adapt to changing conditions of production, for example changes in rainfall patterns. On an external dimension, the existence of extensionists at community level, the high prices paid by NFRA, and the mainly favourable climatic conditions are seen as opportunities.

As threats, the insufficiency of extension services, the unpredictable activities of NFRA, limited market access, lack of access to credits, and the Export Control Act are identified. The insufficiency of extension services is reflected at two different levels. (1) Although extensionists are available at the community level, many farmers do not have access to these services because they are not spread village-wide. (2) The service package that is offered seems not to be well-adapted to farmers´ needs.

The majority of farmers having access to extension services benefit from the service in terms of increased production. Just one-third of them declared that they also managed to increase their income (see Chapter 4.2.3). This gap, an increase in production but the failure to realise higher income, indicates that the current design hinders farmers from fully benefiting from extension services.

The unpredictability of NFRA purchases (see Chapter 5.1) also has to be characterised as threat for farmers as they cannot rely on the quantity NFRA buys and thus they are not able to orientate their production to NFRA’s demand and plan other marketing activities accordingly.

Limited market access here means the unavailability of market price information.

Farmers get information about market prices either from friends and neighbours or from wholesalers and middlemen (see Chapter 4.2.2). Both channels of information generation are seen as unreliable and biased. With unreliable information on market prices, the bargaining power of farmers and their ability to generate higher profits are hampered.

More than 80% of farmers stated that they did not have access to credits. Without

Assessment of the Field Survey Results 67 sufficient financial resources farmers are often forced to sell their produce immediately after harvest to buy inputs for the next season, even when they have access to storage facilities (see Chapter 4.2.1).

The Export Control Act affects farmers negatively, as described within the policy matrix (see Chapters 4.2.2 and 5.1). Although not being directly involved in cross-border trade, the farmers realise the consequences of the ban via increased pressure from middlemen claiming a reduction in selling prices. The bargaining position of farmers is weakened due to the additional supply on regional markets.

After the evaluation of the results from the farmers´ field survey, the following SWOT Analysis (see Table 12) summarises the results from the traders’ point of view.

Source: Own compilation (2009).

As strengths, the independence of traders from single suppliers, the good trade relations with Congolese traders, and the access to storage facilities have been evaluated. As presented in Chapter 4.3, the majority of traders stated that they bought crops from different farmers. Thus, traders are flexible concerning the quantity of food crops they buy and therefore, they increase their bargaining power.

Owning storage facilities enables traders to use price differences between harvest and lean seasons. Due to a stable and extensive demand from Congolese traders, the Tanzanian traders established good relations with these market partners. From their point of view these business relations can be enhanced, offering opportunities to increase their profits and to expand their business in general.

Table 12: SWOT Analysis from the Traders’ Point of View

Strengths Weaknesses

Independence from a single supplier Good trade relations with Congolese

traders Policy objective of export-led growth

SADC Protocol on Trade

68 Assessment of the Field Survey Results As weaknesses, inconstant buying relations and the mistrust felt for Zambian traders have been identified. Due to inconstant buying relations, the transaction costs of traders might increase because they have to create new customer relations each season. Also, the mistrust of Zambian traders (see Chapter 4.3) is seen as a weakness as it might preclude Tanzanian traders from increasing cross-border trade business to an extent that could be possible.

As opportunities, the high price level abroad, informal trade channels, the policy objective of export-led growth, and the SADC Protocol on Trade have been evaluated. The high price level in Zambia and the DRC enables traders to generate higher income. Informal trade channels open these attractive markets that are officially not accessible to them. When it is implemented, the export-led, growth-oriented trade policy of the Tanzanian Government and the SADC protocol on trade have also to be seen as opportunities as they open up attractive business opportunities. Existing market distortions, a high number of non-tariff barriers (NTBs), and the export ban have been identified as major threats for traders. The buying activities of NFRA put traders at a disadvantage and lead to market distortions (see Chapters 4.3.1 and 5.1). As NTBs lower the incentive to trade formally and also increase the costs of formal and informal trade, they are identified as threat.

The Export Control Act has discouraged local and international formal traders¹⁶³. Prominent trading companies in Tanzania completely stopped purchasing large quantities of maize from the Southern Highlands for export to Zambia, the DRC, and Kenya. Also, traders from the DRC, Malawi, and Zambia have sought alternative sources of grain. The majority of grain traders at Tunduma, Tanzania, wished the ban to be lifted and they had a clear perception that even the domestic grain trade is negatively affected. Issuance of export permits by regional authorities has been noted as creating a loophole for bias and bribery. ¹⁶⁴