Tanzania SERA Policy Project Final Report

The USAID-funded Tanzania SERA Policy Project provided research on over eighteen different policies that affected agriculture during the five and one-half year life of the project. It also improved the capacity of Tanzanians to undertake policy analysis and advocate for an improved policy environment. The impacts of this research and enhanced capacity has been to improve the current policy environment, better the ability to monitor and respond to food security challenges and market opportunities, and provide a basis for which for future improvements in the policy environment can be advanced.

The most significant improvement to the current policy environment came from research on the impacts of the food crops export ban which led the GOT to lift the export ban in 2012. This provided farmers with better market opportunities and higher prices for their marketed maize and other food crops. SERA research showed that an export ban reduced farm-gate prices by about 25 percent and as a result of the SERA research there has not been an export ban since 2012, compared to five in the six years prior to 2012. This led to better prices since 2012 and provided incentives for farmers to increase production, increase investments, and provide a better life for their families. The financial impact of lifting the export ban is difficult to measure, but the loss to farmers from the 2011 export ban was estimated to be USD200 million. Tanzania has recorded consecutive good harvests since the export ban was lifted and that was due in part to the lifting of the export ban. There is a regional shortage of maize in 2016, and if the Government were to ban exports, it would result in large losses as in 2011, while increasing illegal exporting and encouraging corruption.

SERA research also contributed to a better understanding of food security and the ability to monitor food costs at the regional level in Tanzania, and contributed to the establishment of a Market Intelligence Unit that will be able to continue that effort in the future. Among the important findings was that diets in Tanzania are quite diversified and no single food item accounts for more than 15 percent of the cost of the typical food basket. Prices of major food items are not highly correlated which means consumers can adjust to changing prices by switching to other food items which have not experienced large price increases. SERA research on food demand also identified those foods that are expected to have rapid demand growth in the future and that information can be used to guide future investments so that the food system meets the needs of the population.

SERA support for a better policy environment for the agriculture sector will continue through producer organizations that were strengthened and reforms that were started by SERA and will continue after SERA has closed. These include an improved working relationship between the private seed companies and the GOT, the strengthening of the producer and industry associations (Rice Council of Tanzania and the Agriculture Council of Tanzania), and planned reforms of the secured transactions law and the establishment of a collateral registry by the Bank of Tanzania (BoT). Strong producer associations can raise policy concerns with Government and influence these policies as was recently demonstrated by the Rice Council when they raised the issue of illegal rice imports. Contributing to better dialogue between the seed industry and the GOT is important because it will lead to greater availability of improved seeds which have been shown to result in a 30 percent increase in crop yields. Improved credit to smallholders and SMEs will increase the ability of smallholders to finance investments and increase productivity, and SERA efforts led the BoT to prioritize this activity and the World Bank to support implementation.

SERA research also examined other important issues such as gender, the agriculture business environment, emergency food imports, and maize and rice market performance. The study on gender showed that female-headed households are severely disadvantaged compared to male-headed households with respect to land holdings, input use, yields, production, prices received, and incomes. This research could be used to support the development of specialized extension programs to focus on female farmers and reduce their poverty. The study of the agriculture business environment showed that Tanzania is not competitive in attracting foreign investors and new incentives are needed. This research also largely explains why the Southern Agricultural Growth Corridor of Tanzania (SAGCOT) has not been able to attract foreign investors and it is unlikely to be successful in the future without major reforms. It is conceivable that if this study had been conducted before the SAGCOT initiative was started, the outcome may have been very different. The study of the emergency food import policy recommended the establishment of a Market Intelligence Unit to monitor food prices and that unit is being established and training was provided by SERA project. The studies of market efficiency showed that prices are slow to adjust to regional price changes and better information systems and better internal transport would result in higher prices to farmers and lower prices to consumers.

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