Report No. 541a-TA Tanzania Agricultural and Rural Development Sector Study (In Three Volumes) Volume 1: Main Report December 10, 1974 General Agriculture Division East Africa Projects Department Not for Public Use Document of the International Bank for Reconstruction and Development International Development Association This report was prepared for official use only,by the Bank Group. It may not be published, quoted or cited without Bank Group authorization The Bank Group does not accept responsibility for the accuracy or completeness of the report. US $1 = 7.14 Shillings (TSh) TSh 1 = US $0.14 1 millimeter (m;) = 0.039 inches 1 meter (m) = 39.37 inches 1 kilometer (km) = 0.62 miles 1 hectare (ha) 2 = 2.471 acres 1 square kilometer (km ) = 0.386 square miles 1 ton (metric) = 2,205 lb (1,000 kg) 1 quintal (qq) = 100 kg 1 liter = 0.204 gallons ACA - Agricultural Credit Agency BRALUP - Bureau of Resource Assessment and Land Use Planning CATA - Cashewnut Puthority of Tanzania COMWORKS - Ministry of Communication and Labor CUT - Cooperative Union of Tanganyika DDC - District Development Council DDPC - District Development and Planning Committee DEC - District Executive Committee ERB - Economic Research Bureau FFYP - First Five Year Plan GAPZX - General Agricultural Products Exports Corporation GiEFCO - General Foods Company KILIMO - Ministry of Agriculture MCL - Mitchell Cotts Limited NAFCO - National Agricultural and Food Corporation NAPB - National Agricultural Products Board NBC - National Bank of Commerce NCCO - National Cold Chpin Operation NDCA - National Development Credit Agercy NMC - National Milling Corporation NHHC - National Road Haulpge Corporation PMO - Prime Ministers Office RTC - Rural Training Center SFYP - Second Five Year Plen SIDA - Swedish International De3velopment Association STC - State Trading Corporation TAMTUJ - Tanzania Agriculture Machinery Testing Unit TANU - Tanganyika African National Union TASCO - Tanganyika'Spinning Company TAT - Tobacco Authority of Tanzania TCA - Tanzania Cotton Authority TCB - Tanganyika Coffee Board TCCC - Tanganyika Coffee Curing Company TCGA - Tanganyika Coffee Growers Association TDB - Tanzania Dairy Board TECO - Tanganyika Extract Company TFA - Tanganyika Farmers Association TFC - Tanzania Fertilizer Company TFNC - Tanzania Food and Nutrition Center TLMC - Tanzania Livestock Marketing Company TPR - Tanganyika Pyrethrum Board TPC - Tanganyika Planting Company TPL - Tanganyika Packers Limited TRDB - Tanzania Rural Development Bank TSA - Tanzania Sisal Authority TSC - Tanzania Sisal Corporation TSDC - Tanzania Sugar Development Corporation TTA - Tanzania Tea Authority TTRW - Tanganyika Twine and Rope Works UCSC - Unified Cooperative Service Commission UFI - Ubungo Farm Implement Manufacturing Company TANZN4TIA AGRICIJLTURAL AND RURAL DEVELOP,'!TYT SECTOR STUDY TABLE OF CONTENTS Page No. BACKGROUND DATA SUMMARY AND CONCLUSIONS I. INTRODUCTION .................................. 1 II. DEVTLOPMENT OBJECTIVES .............2.......... 2 III. RURAL INCOTIE .................................. 6 IV. PRODUCTION OPPORTUNITIES ...................... 13 A. Production Potential ..... ................ 13 B. Demand Prospects ......................... 17 C. P'roductioi Priorities ..... ............... 19 V. FARMERS' INCENTIVES ..... ...................... 30 A. Price Policy ....... ...................... 30 B. The Rural Structure (Ujamaa Village Approach)34 VI. PUBLIC SFRVICES ......... ...................... 38 A. Research and Extension ...... ............. 39 B. Marketing ................................. 40 C. Innut Distribution and Credit .... ........ 42 D. Transportation .......... ................. 45 E. Coordination of Implementation .... ....... 45 VII. MANPOIER DEVELOPMENT ...... .................... 49 VIII. INVESTMENT PROGRAM ....... ..................... 54 A. Functional Distribution ..... ............. 54 B. Regional Distribution ..... ............... 55 C. Type of Projects ...... ................... 55 D. Crop Development ...... ................... 56 E. Livestock Development ..... ............... 60 F. Summary .......... ........................ 63 TABLE OF CONTENTS (Cont'd) Page No. IX. PRODUCTION AND INCOME ESTIMATES ..... .......... 71 X. POSTSCRIPT .77 T7XT TABLES 1. Agricultural Income: Some Case Studies .10 2. Crop Production .11 3. Per Capita Agricultural GDP, 1967-73 .12 4. Offtake from the National Cattle Herd, 1969-72 12 5. Soil and Rainfall Conditions by Region .23 6. Population Carrying Capacity by District 24 7. Returns to Land and Labor in Smallholder Production of Selected Commodities .25 3. Percentage Contribution by Region to Marketed Production .26 9. Domestic Food Commodity Requirements .27 10. Export Price Forecasts .28 11. Cormodity Priorities .29 12. Prices and Marketing Margins for Some Selected Commodities .37 13. Institutional Framework .46 14. Recovery of Fertilizer Subsidy; An Illustration 47 15. Marketed Ouantities of Agricultural Produce by Region and Month, 1972 .48 16. Agricultural and Veterinary Staff, June 197. 52 17. Estimated Output from Agricultural. Training Institution, 1972-80 .53 18. Functional Distribution of Development Expenditure .65 19. Model Development Sequence .66 20. Regional Characteristics .67 21. Proposed Development Program, 1975-80 ... ...... 68 22. Public Sector and Cooperative Investments in Agriculture, 1969/70 - 1974/75 .... ......... 69 23. Additional Technical Assistance Requirements .. 70 24. Production Estimates, Export Commodities, 1975 and 1980 ...................................... 73 25. Self-sufficiency Requirements, 1980 .... ....... 74 26. Smallholder Gross Agricultural Income, 1972 and 1980 .75 27. Agricultural Imports and Exports, 1972 and 1980 76 Volume II - FN 9XES 1. Domestic Demand for Agricultural Corimodities 2. Commodity Analysis 3. Agricultural. Services 4. Farm Mechanization 5. Agricultural Marketing 6. Input Supply and Credit 7. Tljamaa - A Tanzanian Approach to Rural Transformation 8. Ponds and Road Transport 9. Regional Planning 10. Manpower Planning 11. Rural Small Scale Industry 12. Agricultural Pricing VolumeTIII_ STATISTICAL AŽTIFX, BIBLIOGRAPHY, MAPS AND CHARTS S TATI S TI CAL AINNEX TABLES 1. Population. r' al Labor Force and Wage Employment, 1963-1973 2. Population by Re-ion, 1964-1974 3. Regiona]. Area and r)pulation Distribution, Population Density and Growth Rates 4. Gross Domestic Product at Factor Cost by Industrial Origin, 1964 and 1968-1973 5. Gross Domestic Product per Capita by Region, Selected Years 6. Regional Shares of Gross Donestic Product at Current Factor Cost, 1967 7. Social Service Indicators by Region, 1971 8. Development of Rural Water Supplies, 1963-1972 9. Distribution of Medical Facilities by Region, 1972 10. Number of Public Primary Schools by Region, 1965 and 1969-1972 11. Primary School Enrollment, 1965 and 1969-1972 12. Utjamaa Population and Number of Ujamaa Villages by Region, 1970-1971' 13. Roads of Different Categories by Region, 1967 and 1972 14. Type of Road by Region 1967 and 1972 15. Industrial Establishments in Rural Areas, 1970 16. Volume of Imports, Exports and Net Trade of Selected Agricultural Cormodities, 1969-1973 17. Agricultural Imports, Exports and Net Trade, 1969-1972 18.. Food Balance Sheet, 1972 19. Assumptions Underlying the Food Balance Sheet 20. Domestic per Capita Food Demand 1972 Estimated, 1975 and 1980 Projected 21. Projected Nutrient Consumption, Recommended Consumption ancl 1"utrient Deficit 1972, 1975 and 1980 - iv - 22. Dorestic Food Cor'modity Utilization, 1972 Estimated, 1975 and 1980 Projected 23. Llnd Use by Region 24. Estimated Area UJnder Irrigation, by Region 25. ifean tfainum and Minimuim -Jonthly Temperatures, Main Meteorological ct'ntions 2r3. 'Marketed production of Mlain Caslh Crons, 1962-1973 27. tMarketed Production of Main Foodl Crops, 1964-1972 28. Harvested Production of Food Crops by Region, 1972 29. IJse of Fertilizers, by Crop, 1972/73 30. Researclh Institutes and Crop Research Program 31. Livestock Ponulation 32. Cattle Population by Region, 1972 33. Production and Import of Day-old Chickens 34. Producers' Purchiase of Day-old Chickens by Region, 1972 35. Offtake from the National Hlerd, 1968-1972 36. Agricultural M4arketin- Parastatals 37. Parastatal Organizations Related to the Agriculture Sector 3P. Producer Prices of Selected Agricultural CoTrnodities, 1968-1974 39. Export Prices of Selecte(d Cormodities, 1960 and 1966-1973 40. Index of Retail Prices and Cost of Living, Dar-es-Salaam, 196A-1972 41. Estimated Vehicle Operating Costs and Rates for Road Transport, Selected Routes, 1969 42. Estimated Vehicle Operating Costs for Different Road Surfaces and terrain, 1971 and 1973 43. Growth in Government establishment, 1963-1972 44. EmDloyment in Cooperative Unions, 1972 45. Localization of Senior Positions in Parastatal] Organizations in the Agriculture Sector, 1972 46. Non Citizens Employed by Parastatal Organizations in the Agricultural Sector by Occupation, 1972 47. Planned Enrollment and Outputs fron Agricultural and Veterinary Degree, Diploma and Certificate Courses, by Institution 1972-1980 48. Ministerial and Regional Development and Recurrent Budget 1972/73 - 1973/1974 49. Regional Development and Recurrent Expenditure on Agriculture, Education, Health and W4ater, 1972-1973 50. Regional Development and Recurrent Expenditure on Agriculture, Education, Health and Water, 1973-1974 51. Regional Development Expenditure on Agriculture, Health and WIater 1974-1975 52. Number of Holdings and Farm Size Distribution by Region 53. Crop Cultivation by Region BIB ,T,lTnRAPTY IPT?D 1079,4 Relief ard Physica] Features TBTD 2802R2 Regions arvl Districts T!;RD 2803R fean Annual Rainfall IBPD 2B04R Potential Land lUse I JaD 2915P1 Main Livestock and Cro-nin- Regions TBRD 10799 Aaricu1.tural Research and Training Institutions TBRD 10793 Agricultural Project Locations TBRTD 10855 First and Second Livestock Development Project CHARTS 8182 (X) Rainfall at Seelected Sites 8524 Rea-ional and District Administration 8525 The Planning Process 8522 Ministry of Agriculture 8523 Prime Mfinister's Office - vi - BACKGROUJND DATA Rate at Bxchanye US$1 = 7.14 Shillings (Tsh Shilling (Tsh 1 = 0.14 US$) Population (1973) Total Population 14.12 million Annual Rate of Growth 2.7% Rural Population 13.05 million Wagd Emplovment (1972) 0.41 million Density of Population 16.0 per sq. km. Rural Population per Cultivated Area 1 per 0.3h ha. Land Usc (Sq. km.) (Per cent) Total Land Area 883,600 100.0 Rough Grazing 442,450 50.1 Smallholder Cultivation 38,800 4.4 Large Scale Cultivation 5,850 0.7 Total Agricultural Use 487,100 55.2 Connon Woods, Forests 376,600 42.6 High Altitude Forest 3,900 0.4 Other (Urban, Rocky, Swamps) 16,000 1.8 Total Non-Agricultural Use 396,500 44.8 National Income (at Factor Cost, 1973) Average Annual Growth GDP Per cent Rate (Real Terms) Current Prices of Total 1964-68 1968-73 'Tsh Million) GDP (%) (%) Ac;riculture, Livestock, Forestry, Hunting, Fishing 4,443 39.5 3.9 2.4 Subsistence (2,389) (21.2) (4.8) (2.4) Monetarv (2,054) (18.3) (3.0) (2.4) Mining and Quarrying 134 1.2 -0.7 -6.6 Manufacturing and Handicrafts 1,227 10.9 12.3 7.8 Electricity and Water Supply 122 1.1 9.0 10.8 Construction 635 5.6 13.5 7.1 Wholesalu and Retail Trade 1,425 12.7 9.1 3.5 Transport, Storage, Communications 962 8.5 12.4 7.6 Finance, Insurance, Real Estate, Businiess Services 1,169 10.4 5.4 4.0 Public Administration, Other Services 1,017 11.7 5.4 8.6 Less: Imiputed Bank Service Charges -177 -1.6 25.7 10.2 j'otal Gross Domestic Product 11,257 100.0 6.3 4.4 Per Caiyita GDP kTsh ) 797 3.9 1.9 - vii - r, -lic Expenditures (Million Tsh) 1969/70 1970/71 1971/72 1972/73 (Actual) (Actual) (Actual) (Estimated) Recurrent Expenditure 1,526.7 1,631.4 1,780.6 2,189.7 Development Expenditure 1/ 610.5 829.2 884.4 1,276.3 Total 2,137.2 2,460.6 2,665.0 3,466.0 Agriculture, Forestry, Fishing and Hunting as Per cent of Total Expenditure 1/ 10.2 11.3 9.5 9.9 Foreign Trade (Mainland only) 1969 1972 1973 ('sh Million) (Tsh Million) (Tsh Million) Total Exports 1,568 1,840 2,098 Total Imports 1,508 2,787 3,096 Balance of Trade 60 (947) (998) Agricultural Exports 1,193 1,483 1,743 Non-Agricultural Exports 375 357 355 Agricultural as Per cent of Total Exports 76 81 83 Agricultural Imports 2/ 159 349 292 Non-Agricultural Imports 1,349 2,438 2,804 Agricultural as Per cent of Total Imports 11 13 9 Net Exports Annual Growth 1972 1973 Rate 1964/65-1972/73 (1000 Tons) (Per cent) 3/ Coffee 54.7 60.2 8.3 Cotton 64.5 60.0 2.8 Sisal Fibre and Tow 153.1 113.4 -5.5 Cashew Nuts 112.9 109.9 8.1 Tea 9.0 9.5 10.1 Tobacco 7.1 7.2 27.4 Vegetable Oils (2.2) 0.7 -20.5 1/ Self-financed parastatal investment not included. 2/ Excluding agricultural inputs. 3/ Two-year averages 1964-65 add 1972-73. Net Imports Annual Growth 1972 1973 Rate 1964/65-1972/73 (1000 Tons) ( Per cent) Milk, Condensed and Powdered 12.3 10.0 6.2 Milk, Fresh 4.0 4.4 22.8 Wheat, Unmilled 21.1 (4.0) -15.4 lWheat, Flour 15.5 9.2 15.7 Maize, Unmilled 134.0 18.4 1/ Sugar 50.3 47.2 greater than 100% Animal Fats and Oils 9.8 6.4 1/ Agricultural Production Marketed Production Harvested Annual Producer Production Volume Growth Rate Price (1972) (1972) 1965/68-1969/72 2/ 1974/75 (1000 Tons) (1000 Tons) (Per cent) (TrSh/Ton) Major Food Crops Maize 880.9 227.4 5.7 500 Millets 128.2 55.8 20.0 550 Sorghum 190.8 38.1 5.5 550 Wheat 98.3 62.1 6.8 777 Paddy 170.9 72.1 19.3 650 Mixed Beans 152.8 46.5 2.8 661 7/ Cassava 792.9 181.3 8.4 360 Irish Potatoes 113.1 52.0 32.0 337 7/ Sweet Potatoes 234.2 92.4 0 n.a. Groundnuts 29.3 5.4 -7.4 1,500 Sesame Seed 8.0 5.8 -4.5 1,600 Castor Seed 16.6 12.6 -1.5 n.a. Bananas 1,205.7 228.7 0.3 n.a. Major Cash Crops 6/ Sisal n.a. 155.4 -3.2 896 Coffee (Clean) n.a. 54.6 3.2 5,345 Tea n.a. 12.7 10.4 3,280 3/ 7/ Tobacco Flue-Cured n.a. 10.8 20.0 5,850 Fire-Cured n.a. 1.9 11.6 2,550 Lint Cotton n.a. 68.6 2.1 1,415 4/ Sugar n.a. 107.1 5.9 4,250 5/ 7/ Pyrethrum (Flowers) n.a. 3.5 -3.8 4,210 Cashew Nuts n.a. 139.3 7.1 950 1/ Tanzania was a net exporter in 1964 and 1965. 2/ Growth between four-year averages. 3/ Smallholder producers only; "made tea" equivalent of green leaf price of 73¢/kg. 4/ Price of seed cotton, average for all grades. 5/ Per 100 tons of cane; 10% sucrose content. 6/ Marketed production 1973. Annual growth 1967/68 - 1969/73. 7/ 1972. Li,restock Population (1972) (1000 Head) Catt te i4,)472 Goats 4,,5514 Sheep 2,820 Pif s 23 Agricultural Inputs (1973) Tractors in Use Approximately 2,000, or 1 tractor per 2,230 hectares. IFeitilizer2 66,000 MT, or 14.8 kg per hectere.cultivated area. Pecticides (net Imports) 4,896 tons, or 1.10 kg per hectare.cultivated area. Uijamaa I^evelopment 2>70 1971 1972 1973 1974 Number of Ujenaa Villages 1,'?56 4,484 5,556 5,631 5,008 Ujinaa Population ('000) 531 1,54 5 1,981 2,028 2,560 NlumAn Nt'trition (1972) Daily Per Cepita Plant AnimEl Consumption Origin Origin (Percent) (Percent) Cj ories (Numaber) 2,009 90.2 8.8 Protein (Grams) '2.0 72.7 27.3 Faet (Grams) 33.2 65.1 34.9 Herlt,h (1972) Population per Hospital Bed 754 Populetion per Dispensary 9,025 Population per -Rural Health Cenber 13(,836 Polulation per Physician (1971) 22,358 / Preliminary results from the 1972 Agricultural Census PUts the size of the national herd at 9,424,000 head. -x- Average I'icome (1969) Rural Rural Urban farm non-farm non-farm household household holsehold 1/ Average cash income per household (Tsh) 851 1,856 6,299 Average cash income per person (Tsh) 1/ 151 342 1,241 Estimated value of subsistance agr. production per person (Tsh) / 157 - - Total income per person (Tsh) 308 342 1,241 Income Distribution (1969) / Rural Households Urban Households All Households Cash Income (Mainland) per Household Percent Cumu- Percent Cumu- Percent Cumu- (TslVTear) of lative of lative of lative Rural Percent- Urban Percent- Total Percent- age of age of age of Rural Urban Total 0-249 17 17 - - 16 16 250-499 26 43 1 1 25 41 500-749 17 60 3 4 17 58 750-999 9 69 3 7 8 66 1,000-1,499 12 81 6 13 12 78 1,500-1,999 6 87 7 20 7 85 2,000-3,999 9 96 37 57 10 95 4,000-5,999 2 98 15 72 3 98 6,000-7,999 1 99 9 81 1 99 8,000 and above 1 100 19 100 1 100 Average Cash Income (Tsh) 982 6036 1271 Income in IDA supported projects (Tsh) Existing &Etimated Remarks Income Income With Project Tobacco (1970) 2,200 Cash income; 5th year Tea (1971) - 1,782 - 2,272 Cash income; 16th year Geita (1973) 930 1,520 Cash income; 8th year Cashew (1974) 293 364 Cash income, 10th year Kigoma (1974) 700 1,440 Total income; 8th year Farm Size Distribution (excl. estates) 3/ 0.0 - 0.5 Ha 31.5% 0.5 - 1.0 " 26.6% 1.0 - 2.0 " 24.7% 2.0 - 3.0 " 8.9% 3.0 - 4.0 3.6% 4.0 - 5.0 n 2.0% 5.0 - 10.0 " 2.2% 10.0 - 20.0 " 0.4% 20.0 - 30.0 " 0.0% Over 30.0 "0.0% 100.0% Total number of holdings: 2,450,000 Average farm size: 1.20 Ha. / Results of 1969 Household Sample Survey / Agricultural subsistance GDP per person dependent on agriculture / Agricultural Census, Preliminary Results. - xi - SUMMARY AND CONCLUSIONS The Rural Sector and Incomes i. Tanzania is essentially a country of small peasant farmers and a little over 11 million people, or some 80% of its total population (14.1 million in 1973) are dependent on agriculture for their living. With the exception of a small area of private estates and parastatal operations, the country is characterized by a relatively small range in farm size and incomes and those disparities which exist mainly reflect different agro-economic zones, farming systems and managerial ability. Thus some 2.2 million farms have an average holding of 1.2 hectares, and 97% of all holdings are less than 5 hectares. ii. There is little recent reliable data on rural incomes. A household survey conducted in 1969 estimated the average per capita rural household in- come to be Tsh 308 of which that derived from agriculture was probably Tsh 240 and the cash component Tsh 175. Statistics for 1973 show a per capita GDP from agriculture of Tsh 387, this higher figure reflecting income from estates which also largely accounts for differences among regions: in 1970 per capita GDP of the nine poorest regions (with 43% of total popullation) was 20% below the national average while the nine richest were 15% above. Since then the range between the group of poorer regions and the group of richer regions may somewhat have narrowed but differences between individual regions are still probably substantial. Although urban incomes are abou; four times those in rural areas, the urban population is only 1 million ant with pegged salaries and wages there is no significant rural/urban problem, nor is there a serious disparity between the modern and traditional sectors. The former, however, cannot be ignored as private estates still supply a large proportion of export crops as well as important domestic food supplies. iii. Per capita farm incomes have probably reached Tsh 400 (US$56) in 1974 of which that from agriculture some Tsh 300 (US$42) and the cash component Tsh 200 (US$28). The small increase over 1969 however mainly reflects increas- es in commodity prices rather than in production levels. During the period 1968/73 agriculture production growth at 2.4% annually failed to keep pace with population growth (2.7%) and was considerably less than in the previous five year period (3.9%). This stagnation has resulted in Tanzania having to import increasing quantities of grains and other food over recent years, and in 1974 this trend has been exacerbated by failed or late rains which is likely to result in food imports to the value of some US$150 million - compared with an average of US$20 million annually in the late sixties and US$50 million in 1972. When combined with the effects of the oil crisis, this has had a serious impact on the country's economy and Tanzania now faces critical produc- tion problems as well as the need to attack widespread rural poverty. -- xii - Government's Development Objectives iv. With its focus on small farmer agriculture, Government has pro- ciaPi'2d the development of the rural sector the cornerstone of the country's development strategy, the basic policy document being the widely acclaimed 'Xrusha Declaration of 1967. An important aspect of its social equality aims has been the establishment of ujamaa villages. This has the advantages of facilitating grass root participation in the planning process and in the provision of farm supplies and social services, but empirical evidence indi- cates that the implementation of this policy has also had a disruptive effect on production. This has been inevitable where villagization has coincided with planting or harvest seasons and where farmers have had to divert their energies to building new houses and to assimilate a new farming environment. Although collective farming is no longer a policy objective, this change in policy is not widely known and the prospect of collectivization thus remains a disincentive as does the general uncertainty surrounding the timing and manner of villagization. As the prospect of social services has been important to promote new village establishment, the aggregate effect has been for Govern- ment to allocate a high proportion of its resources and administrative capabil- ity to social and other infras *..cture while some investments in less produc- tive regions have yielded low economic returns. There are thus now clear in- dications that unless the overall d' elopment strategy is adjusted to correct these problems, improvements in rural incomes and standards of living are likely to be slow. Rural Sector Problems and Opportunities v. Like many developing countries, Tanzania has its share of the prob- lems associated with high population growth, land pressures and increasing food demands but it also enjoys particular advantages and potentials for the development of its small farming. At the present time there is about one- third of a hectare of cultivated land per capita of rural population and to maintain this ratio by 1992, when the rural population is expected to have increased to some 21 million, will require an expansion of cultivated area of 64% - probably more if soil erosion and fertility problems are taken into consideration. However, Tanzania has the advantage of considerably unused land of good potential and although precise data are lacking about half of the country's administrative districts are capable of sustaining a much larger population than they do at present. Resettlement therefore has to be an im- portant part of any long term agricultural program. vi. Increasing food consumption demands offer good development oppor- tunities for the small farmer. In the case of maize, the major food staple, yields (without cultivated area expansion) would need to increase from the present low average of 7.5 quintals per hectare to some 13.5 quintals to sus- tain the 1992 population and provide a small strategic reserve. However, already known and relatively simple innovations and techniques could very quickly result in a doubling of yields of a wide range of crops - maize, cotton, pyrethrum, irrigated rice, sorghum, beans - while the potential yield increases for coffee, tea, tobacco, rainfed rice and wheat, though somewhat less favorable, are also substantial. Similar growth prospects - xiii - exist in the livestock sub-sector where the offtake from the national herd has been low and stagnant in recent years. On the demand side, apart from the pressing demand for domestic grain and other food, notably sugar, there are good market prospects for most of Tanzania's traditional export crops. Providing that existing constraints can be overcome and the necessary re- sources made available, it is therefore not unrealistic to assume that Tanzania could both expand cultivated area to match population growth and, by 1992, double yields overall. Taken together, this would result in an average annual growth rate in agriculture of 6% and by 1992, a threefold in- crease in production and a doubling (but only a doubling) of agricultural incomes in real terms. Constraints to Development vii. Critical among present constraints is the dearth of reliable de- tailed data on the production potential of the different agro-economic zones, 46 of which have been identified. Information is particularly needed for each zone on such matters as soil conditions, present yields, farming systems and erosion problems. With this information in hand, it will be possible to identify area expansion possibilities and establish optimal farming systems. A real improvement in land use planning and applied research is thus not only a high priority, t.r must necessarily precede the more intensive agri- culture programs which Tanzania needs to develop over the next 20 years. viii. Also important is the need to improve farmers' incentives, and commodity pricing needs particular attention. In many cases, notably beef, producer prices need to be further increased and brought closer to import/ export parity; other prices, such as oil crops (for which Tanzania has con- siderable potential but is nonetheless a significant importer), could justi- fiably be increased above export parity to promote production. A uniform pricing system applies for a number of crops. Although distance to the mar- ket is not perfectly correlated with poverty, this system has brought benefits to some poorer regions but it has also brought a misallocation of resources and high transport costs. This report recommends a gradual introduction of variable pricing arrangements and more direct assistance to poorer regions. ix. The most far-reaching constraint to agricultural development however arises out of the serious defects of the supply and marketing systems and the ineffectiveness of the extension services. The cooperative movement plays a central role in Tanzania and is responsible not only for most of the marketing of the principal crops and much of the input supply, but also in recent years for a number of- other activities such as local transportation. Widespread mismanagement, overstretched responsibilities, frequent excessive Government interference (as distinct from control) and the establishment of many non-viable societies have resulted in high costs, bad service, delayed payments to farmers and a high proportion of society insolvencies. The report recommends that where cooperatives are successful, they should be given more freedom from Government interference; where they have failed, they should be taken over and administered by the regional government authorities - as has already occurred in some instances. Although - xiv - improved of late, agricultural credit institutions have historically been plagued by high overdues and the system generally is incapable of providing a widespread coverage for seasonal inputs. Instead the report proposes that consideration be given to a seasonal input subsidy scheme, particularly for fertilizers, which might amount to as much as 75% of their cost. For the most part the cost of such a subsidy should be recovered through adjustments to commodity prices and taxes. x. With vacancies at the degree and diploma levels running at 47% and 37% respectively, the need of the extension services is essentially to both increase and improve standards of training. The latter can partly be met by a closer linkage between the training institutions, area extension staff and the zonal cooperative colleges but more emphasis should also be given to field demonstrations. The number of non-citizens employed in agriculture has decreased rapidly in the last few years and the immediate requirement is for more management, planning and research personnel. Despite its attendant drawbacks, Tanzania will need to supplement its own skilled manpower resources with additional technical assistance if the planned growth is to be achieved. It is expected that the proposed agri- cultural development program will require an additional 100 such appointments over the next five years. Resource Allocation and Proposed Strategy xi. The Second Five-Year Plan (1969-74) set the target share of agri- cultural investment at 13% and although subsequent allocation changes make a precise comparison difficult, it seems probable that actual investments have fallen short of this target, particularly in the first three years. In contrast, investments in water, power and education have either reached or exceeded targets and the regional budgets, established after the 1972 Government decentralization, have weighed heavily in favor of social invest- ments. xii. It is now of the utmost importance that for the Third Plan period (1975-80) the allocation of resources to the agricultural sector should be significantly expanded even though this may mean the temporary postponement or slowing down of other less productive projects. The report recommends that production priorities should also govern the next stages of the devel- opment of the rural economy and suggests a sequential approach whereby investments with an immediate production impact are given the highest priority, to be followed by the development of more intensive farming systems and only finally by an accelerated provision of social and other infrastructure not essentially required for the production objectives. In densely populated farming areas significant agricultural progress can be made within the exist- ing rural structure and levels of social services. The establishment of ujamaa villages (involving considerable investments in education, health and water facilities) could therefore take lower priority for the time being. The proposed strategy therefore focuses on maximizing agricultural production initially through the exploitation of quick yield increase opportunities and later through a longer-term program aimed at a wider range of production increases and area expansion. - xv - xiii. Since the decentralization of Government, the regional and district administrations are now responsible for most aspects of rural development, and their increased autonomy has encouraged the introduction of regionally based muIti-sectoral projects. Such integrated projects have many advantages and attractions and will no doubt continue to play some part in Tanzania's development process, but they have the disadvantages of supporting areas of low as well as of high productivity, of over-emphasizing social investments and thus of failing to adequately address the production problem - which has become an urgent concern in the country's development strategy. Instead, the report recommends that Tanzania should now concentrate its efforts on the most rapid exploitation possible of agricultural opportunities on a multi-regional basis and starting with areas of high production potential. Through this approach growth centers would be rapidly established in most of the districts. These centers would have the added advantage of illustrating the scope and methods of agricultural development and gradually increasing the capacity of the regional and district administrations to plan and imple- ment such efforts. In this process it will be essential to strengthen the now very much run-down Ministry of Agriculture so it can guide and support the production efforts of the regions. Proposed Investment Program xiv. To implement this strategy two new (for Tanzania) types of project are proposed, the first of which would concentrate on maximizing quick yield increases from existing cultivated areas and the second while aiming at further yield increases would also focus on expanding cultivated areas. The first would be a National Maize Project directed at the major maize pro- ducing areas and would include investments in seasonal inputs (appropriately subsidized), storage, marketing, extension and technical support for the re- gions and the Ministry of Agriculture. Although favorable policy actions, such as commodity price increases can be expected to assist in increasing production, these alone are unlikely to achieve the substantial increaise in maize production needed if Tanzania is to become self-sufficient by 1980 (involving a production increase from 880,000 MT in 1972 to 1,300,000 MT). To obtain the required impact and sustained effort, a project bringing together a package of investments and administrative measures (particularly the essential strengthening of input supply and marketing) merits the highest preparation priority and should be ready for implementation in 1976. To facilitate this it is proposed that the project focus on maize only (which would limit the number of regions and institutions involved) but there would be some spill- over benefits to other food crops and these could specifically be included in a later phase. xv. The second project, the National Agricultural Development Project (NADP) is a longer-term and more thorough effort to transform traditional farming practices. It would aim to develop more intensive farming systems through the introduction of new techniques, rotational practices, soil con- servation measures, settlement and the integration of crop and animal pro- duction, the activities varying according to the circumstances and potential- ities of the different agro-economic zones. The method of development proposed visualizes the progressive introduction of a number of sub-projects, each com- prising perhaps 10,000 farm families and as it would be the aim to effectively - xvi - co'.-r the whole country over 20 years, some 10 such sub-projects would be in- troduced annually. Apart from inputs and increased technical support, project financing would extend to medium- and long-term investments for such items as .raught oxen, livestock, probably some cash crop needs and improved research, la .d use planning and training facilities. h' 'or the National Maize Project, the ,uccessful implementation would depend heaviiy on greatly strengthened support services, policy changes (such as pri-ing) and additionally on a start being made on land use planning and an intensified zonal research. NADP imple- mentation cannot therefore be expected before 1977/78, but it needs an early start for the necessary preparatory work and planning. Its financing is visualized on a time-slice basis. xvi. In addition to these two innovative projects, which seek to inject a nation-wide production impact into the smallholder sector, the agriculture development program over the next five years can be expected to include the continuation and/or follow-up of a number of on-going projects, for many of which the World Bank Group has in recent years provided considerable support. A second regional project also reflecting increased production emphasis can be expected for Tabora as a follow-up to that approved for Kigoma and further expansion would be justified for cash crops projects such as tobacco, cashew nuts and sugar - though in pa - these activities may be merged into the devel- -opment to be promoted by NADP. Livestock production also offers the opportun- ity for expansion through the deveiopment of further parastatal ranches, tse- tse eradication, the integration of crop and livestock production (through NADP) and possibly a dairy project. Although outside the scope of this report, investments in forestry, some small scale irrigation and irrigation improve- ment (but not large scale irrigation, which would be costly and would give low returns) and possibly fisheries can also be expected by 1980. xvii. The above investments are expected to require some Tsh 2,300 mil- lion (US$320 million) or about 20-25% of expected total available resources during the Third Plan period. Recent information indicates that during the last two years the agricultural share of public investment has substantially increased. This change now needs to be consolidated in the face of a con- tinuing high level of demand for social and other infrastructure investments, in part stemming from the accelerated villagization program. Significant improvements in production and rural incomes will only be achieved if Govern- ment is committed to give the highest priority to investments in productive agriculture. Estimated Benefits xviii. With the many uncertainties involved a precise quantification of benefits is not possible but it seems probable that the implementation of the recommendations of this report could result in a real growth of the net value of smallholder production of 5% annually through 1980, that they would prepare the ground for a 6% annual growth through the 1980's and result in a doubling of real incomes by 1992. While initially to stimulate rapid pro- duction increases, beneficiaries would be mainly the more progressive - but still small - farmers in higher potential areas, the longer term strategy is - xvii - designed to reach out to all types of smallholders throughout the country, at the same time providing a stronger economic base which would enable Tan.zania to further assist the least privileged members of its rural areas. In terms of foreign exchange the agricultural sector contribution by 1980 could reach, at current prices, some Tsh 2,800 million (US$400 million) compared with Tsh 960 million (US$137 million) in 1972. While these increases are not dramatic in absolute terms they would represent a considerable improvement over the achievements of the last five years. In its present situation, Tanzania can hardly afford to aim for less. Recommended Measures for Immediate Action xix. In a postcript, the report considers such urgent measures that Tanzania might now be taking to alleviate its immediate problems as a result of the 1974 food grain crisis and consequent balance of payments difficulties. Three sets of measures are identified. First, while Tanzania in October 1974 again substantially increased producer prices for a number of agricultural commodities including food grains thus enhancing farmers' incentives, the villagization program has been allowed to accelerate to such an extent that, in the absence of any real planning, it now threatens to cause a very serious disruption to production. In these circumstances we can orly recommend that a temporary halt be brought to the resettlement process so t:hat a major effort can be directed at minimizing the negative impact on planted acreage and yields. Second, it should immediately begin to implement a range of policy changes and reforms such as recommended in this report, particularly those concerning marketing, input supply, extension services and the proposed strengthening of the Ministry of Agriculture. Third, it should give serious attention to improving the implementation of exi;ting projects, many of which have showed disappointing performance, and to ensuring a prompt and effective start to those projects recently approved. Such measures are likely to have an immediate and beneficial effect on the Tanzanian economy and would lay the foundation for the more effective implementation of the development stracegy over the decade ahead. TANZANIA AGRICULTURAL AND RURAL DEVELOP?ENT SECTOR STUDY I. INTRODUCTION 1.01 This report represents the findings of a mission consisting of Messrs. B. Nekby (Chief of Mission), G. Ablasser, P. Bottelier, S. Hayden, F. Stubenitsky, Mrs. B. Mitchell, and Mrs. L. Blank (IBRD) and Messrs. P. Abraham, C. Colclough, J. Fabre, K. A. Hansson, J. Kingsley-Pallant and S. Person (Consultants). The Mission visited Tanzania in October 1973 to review the opportunities, constraints and strategy for agricultural and rural develonment and to outline a long-term lending program. The report has been timed to allo4 a contribution to the preparation of Tanzania's Third National Development Plan (1975-80) and is intended to provide a basis for discussions between the Tanzanian Government and IDA on assistance to the agricultural sector. The report also forms part of an IBRD/IDA study for African rural development. It is selective in coverage and no consideration has been given to the forestrv and fisheries subsectors, to fruit and vegetable production, or to irrigation opportunities. Its emphasis is on t,le development of small- holder agricultural production and income, and other sectors are considered only xwhen they have an integral relationship to this development or when exist- ing sectoral programs are inadequate to meet the needs of agricultural develop- ment. 1.02 hle report thus does not aim to provide a comprehensive description of acriculture and rural development in Tanzania. Rather it attempts to focus on the onportunities for inproving rural incomes through increased production and to identify a lona term strategy, policies and investment program Thich would achieve this ob-jective. Further information on the major subjects con- sidered in the main renort is given in Volume 2 and detailed statistical data, a bibliography and maps in Volume 3. While the mission believes its conclusions to be well based, it would stress that data available has been limited with only scattered and tentative information from the 1972 agricultural census. This has particularly applied in respect of production and yields, livestock numbers and farm size and income distribution. 1.03 The report has been developed in close collaboration with Tanzanian officials in the Prime Minister's Office, the Ministry of Agriculture, and the Ministry of Development Planning andl Economic Affairs. A series of seminars with senior Tanzanian officials were held during the course of the mission. Throughout the stay in Tanzania five officials from the Ministry of Development Planninn and Economic Affairs (Messrs. J.P. Maddulu, Maliti, I.M. Mukaruka, W.L. Nyachia and J.L. Zayumba) and two from the Ministry of Agriculture (>essrs. P. Mackay and L.O. Samizi) accompanied the Mission. Arrangements for all fieldl visits were made by the Assistant Principal Secretary of the Ministry of Develop- ment Planning and Economic Affairs, Mr. P.S. Kalanje. A draft renort was dis- cussed in July 1974 with officials from the Ministries of Development Planning and Economic Affairs, Agriculture and the Prime Minister's Office. - 2 - LI. DEVELOPMENT OBJECTIVES Government Objectives 2.01 Government has made the development of the rural sector the corner- stone of its overall development strategy. The hasic policy document of the angany ', African National Union (TANU) party, Zhe Arusha Declaration of 1967, i-'nts to the face that Tanzania's main resources are its land and its people and the ccuntry is now committed to an effort designed to: "build a society in which all members have equal opportunities; in which all can live at peace without suffering or imposing injustices, being exploited or exploiting; and in which all have a gradually increasing basic level of material welfare before any individual lives in luxury." 1/ This egalitarian objective is being implemented through reliance on four major principles: social equality, cooperative activities within a village structure (ujamaa), self-reliance and the economic and social transformation of the society. 2.02 Social Equality. Governiment is strongly committed to the idea that the benefits of development should bc spread as widely as possible throughout society. The implement.ation of this goal has two important aspects. The first is that there should be a more equitable balance of incomes and social services between urban and rural areas, and the second is that the development effort should be evenly balanced between the various regions of the country. Urban areas have been particularly attractive as they offer higher wages, better social services and greater economic opportunities. In an effort to minimize this differential, Government has embarked on a concerted effort to control further increases in urban wages and to concentrate new social services in rural areas. Disparities between regions, particularly where they arise out of differences in natural resources, present a more difficult problem. In the effort to achieve a regional balance, choices must be made between the concen- tration of investments in the least favored regions and the selection of the best economic investment a:ternatives. A balanced regional development may involve some sacrifice in overall economic growth: where these two goals con- flict, however, no specific guidelines have as yet been presented. 2.03 Ujamaa. The social and economic equality that characterized the traditional village no longer exists. Within the farming community the dis- parities between larger and smaller units and richer and poorer families have increased. The differences are most pronounced in cases of land shortage and where there is a high degree of market orientation. 2/ The Government wishes 1/ Nyerere, J. K. Socialism and Rural Development. 2/ See e.g., Ruthenberg H. (edit.) Smallholder Farming and Smallholder Development in Tanzania. Ten Case Studies, 1968. -3- ,, reverse this development, reduce the differences in wealth and income and vrrect the inequalities between men and women. The instrument of thlis change waw initially the promotion of collective production but recently Government .ha moved away from this objective and is now concentrating its efforts on the es':ablishment of villages with individual holdings, where feasible, arranged in l' cks. In a country where most farmers have traditionally lived on their scattered holdings, the grouping of farmers in ujamaa 1/ villages is seen to have two main advantages. First, it would facilitate participation in rural development planning, considered to be of great importance since "any action that gives (the people) more control over their own affairs is an action of development even if it does not offer them better health or more bread." 2/ Second, it is hoped that the transformation of the existing rural structure will facilitate the provision of education, water and health facilities and other public services. 2.04 Self-reliance. The Arusha Declaration emphasized the idea that development should be carried out through the active mobilization of domestic resources, particularly the mobilization of the people. The first step in this process is to convince the people of the appropriateness of the specific objectives. This is to be achieved through education, encouragement and good example rather than by force. "It would be absurd to persuade people to start or to join an ujamaa village .hrough promises of outside help ... (but once started) all Government activtties in rural areas will be directed towards helping the sound economic develr ment of socialist rural production and socialist living." 3/ The establishment of successful villages as a demonstra- tion is a vital par' of the strategy. In order to increase the capacity for hard and intelligent work, great importance is attached to nutritional improve- ments, water developpient, better health and educational services. 2.05 Economic and social transformation. In a declaration entitled "Politics in Agriculture" from the TANU National Executive Meeting in Iringa 1972 the role of agriculture is outlined as follows: Through agriculture our farmers have to provide food for: (a) more than 44% of our total population which is 14 years old and below. (b) most of the 9% of our total population who are 50 years old and over (these two groups together made up a total of 6,600,000 people in 1967 out of a total of 12,300,000). 1/ Ujamaa, a Swahili word meaning familyhood. 2/ Tanganyika African National Union (TANU) Guidelines 1971. 3/ Nyerere, J.K. Foreword to Second Plan. - 4 - (c) 450,000 adults and their wives who work outside agriculture (in Government, factories, commerce, the Army, etc.); and (d) i!tween -1967 and 1980, an extra 5,300,000 people at present rates of population growth. Through agriculture the farmers have to improve the quality of food available. Our present low expectation of life (on average, Tanzanians live to about 40) is largely the result of poor diet - that is, our food lacks proteins, vitamins and other essential elements. We could easily grow more of the foods like beans, groundnuts, vegetable and fruit, which have a high health value. Through agriculture we have to provide exports to earn the foreign exchange we need. Only by doing this can we buy anything from foreign countries, either for development, for our national de- fence, or even for the maintenance of our present economy. At present, between 85% and 90% of our total exports consist of raw or processed agricultural products. Even to maintain the exist- ing level of imports, we have to continually expand our exports because prices on the world market are increasing for the things we buy and decreasing for the things we sell ... Through agri- culture we have to provide the raw materialTh like cotton, kenaf and copra, which we need for our owr. industi es." Goal Conflicts 2.06 Although fullfillment of these far reaching .,galitarian objectives nay create a more desirable society, a number of real cr potential goal con- flicts arise for which development theory offers no objective solutions. Balanced regional development may be attained only with some sacrifice in overall economi.c growtlh. The establislhment of villages without proper planning has disrupted production. Accelerated villagization will require investment in land clearing, housing, water, health and educational facilities. The -ja1maa program thus competes with directly productive investment for scarce resources and administrative attention. A balanced urban--rural development l:as among other things mneant that the rewards for education ntust be restricted sad that Government salary scales aid aciployment benefits must continue to b2 kept relatively low. Can this be accomplished simultaneously with an improvement in staff performance? The Government needs to give more attention to these conflicts, which may account for some of the difficulties which are now being experienced in the implementation of its rural development program. 2.07 Tanzania has been widely acclaimed for its determined efforts to reduce social inequalities and promote rural development, but some reassessment of its development strategy is now appropriate in view of these inherent conflicts. Such-conflicts between egalitarian and growth objectives are not unique; other developing countries have faced many of the same questions, and have endeavored to find a balance in light of their available resources and prevailing social philosophy. In the five-year period from 1968-1973, the growth of agricultural production in Tanzania has been much slower tfhan in t.^._ previous 5-year period and has failed to keep pace with the rate of /^o - e, ia-ze, C']s.,. '- (.9) ,.0 1,<10 11, 1,495 249 Pukohsa ;nn-n-/C,o Xee 0.97 D.3 1,504 91 1,588 300 TPt. Wil 7nnn; ro c/ mn-/'o ee 1.3(u 7.5 1,630 782 1,098 1h6 Tr-nl < I_Cs:-vc, cocormu,, lii ?eS; eock 2. 7 , ; 1,421 107 1,314 235 LTr , d/ 'Ioancco , J Pz-, Facid;r 3.L1l n.?P. 7,"OG 1,280 3,320 n.a. 0 lTumbi d/ Tor-h cco, ';?ize, Padd, 1.9 n..-. 2,340 1,120 1,220 n. a. 0 o/ Irieu10in, lhirea 1, on. c/ An unfavorable year. 2/ Established settlers. Source: 3,u'herdaerg H. (edit.) .r;1llhol+'-r §r ,in 'nd s, llh 'r developmnent in T,'nzn n;. (Su-re:-s un7 1r,~>'en 'f / Table 2: CROP PRODUCTIOI, a/ Harvested Estimated Marketed Marketed Annual Growth Annual C'rop Production Smallholder Production Proportion Harvested Growth 1972 Proportion ('000 MT) (%) Production Marketed ('000 MT) 1972 1972 1973 1965-1968 Production (%) (est) to 1969-19j2 1965-1968 (%) to 1969-72 Maize 881 75 227 26 3.1 5.7 Millet 128 100 56 44 0.5 20.0 Sorghum 191 100 38 20 2.7 5.5 'Wheat 98 25 62 63 17.3 6.8 Paddy 171 95 72 42 11.6 19.3 Beans 153 95 46 30 4.1 2.8 Cassava 793 100 181 23 I1.8 8.4 Irish Potato 113 100 52 46 30.0 32.0 Sweet. Potato 234 98 92 39 0.1 0 Groundnuts 29 98 5 17 -8.1 -7.4 Sesame 8 98 6 75 -1.0 -4.5 Castor seed 17 n.a. 13 76 -2.8 -1.5 Bananas 1,206 95 229 19 3.3 0.3 Sisal (fibre & tow) - 2 157 155 - - -3.2 Coffee (clean) - 72 52 55 - - 2.1 Tea - 10 13 13 - - 10.0 Flue-cured tobacco - 60 11 11 - - 20.5 Fire-cured tobacco - 100 4 2 - - 11.8 Cotton lint - 98 78 69 - - 2.1 Sugar - 1 88 107 - - 5.5 Pyrethrum (dried flowers) - 100 4 4 - - -(.5 Cashew nuts - 98 128 139 - - 7.6 a/ Considerable uncertainty surrounds the food crop estimates, particularly harvested production. Source: Ministry of Agriculture, Markat Statistical Report. - 1? - Table 3: P&R CAPITA AGRICULTURAL GDP, 1967-73 1968 1969 1970 19 71 1972 1973 Agricultu. al GDP in 1966 prices (Tsh mil icn) 3,062 3,080 3,189 3,162 3,366 3,472 Rural population ('0OO) 11,521 11,811 12,109 12,415 12,855 13,176 Agrirultural GDP pe- capita (Tsh) 26; 260 263 25r 262 264 Source: TMe Pconoindc Su.rvey. Table 4: OFFTAKE TRCM TH4 NATIONAL CATTLh HERD ('000 Head) 1969 1970 1971 1272 Total herd size P/ 12,323 13,003 13,718 14,472 Offi cia] sales 3"4 318 268 275 Official sales ss I of total herd 3.0 2.4 2.0 2.6 Total co.ftake 1,15O 1,192 1,084 1,105 Total offtake as % of total herd 9.3 9.2 7.9 7.6 a/ Both total size and growth rate likely to be overestimated. Tentative results from the Agricultural Censue indicate a 1972 herd size of 9,424,000. - 13 - IV. PRODUCTION OPPORTUNITIES A. Production Potential Introduction 4.01 Tanzania is situ'a d just south of the equator, and most of the country with the exceptiod of a c6astal belt is located on the central African plateau with altitudes ranging between 1,000 and i,500 meters. (Map, IBRD '10794). The topography to a large extent determines the rainfall pattern; higher altitude areas in the south and north have relatively high rainfall, while other areas in the interior and the north receive less than 800 mm amnually (Map, IBRD 2803 R and Chart 8182 (r)). The rainy season generally extends from November through May. The drier areas have on the whole a relatively low soil fertilityj ilthough fertility and cropping potential may vary widely within a given area; the southeast, the interior and large parts of northern Tanzania are at a particular disadvantage. (Map, IBRD 2804R). A regional breakdown of soil and rainfall conditions (Table 5) shows that Iringa, Morogoro, Mbeya and Ruvuma in particular have considerable production potential. The regions in whicia each of the major cash crops are grown are illustrated i MHap IBRD 2915k. 4.02 Only 5.1% of Tanzania's total land area is used for crop production. The ramiAnder consists mostly of rough grazing areas (52%) and of woods and forest (43%). Smallholders cultivate about 87% of the area under crop production. About 1.4 million hectares or 31% of the cultivated area is devoted to major export crops, with the remaining 3.1 million ha (69%) reserved for basic food crops 1/. The area under irrigation is estimated at 127,000 ha (less than 3% of the cultivated area), the bulk of which is utilized by smallholders; the major commerciai use of irrigation is in the sugar industry. Studies have been made of the potential for major irrigation, particularly in the Rufiji, Kilomibero, Wami, and Pangani river basins. Such projects would be extremely expensive and would require sophisticated farming practices -- skills which are presently in short supply in Tanzania. The last two years have witnessed a shortfail or late occurence of rains in some seasons in certain parts of the cbuntry and although there is no clear eyi- dence to indicate a long-term deterioration in the rainfall pattern, such events and consequent poor harvests have uindeistandably brought renewed attention to irrigation possibilities. N6nethelesg; we consider that the development of rainfed farming which offers the best immediate opportunities of yield increases sho'uld continue tb rieceiie the maiin emphasis, and invest- ments in irrigation shbuld be limited to the rehabilitation of existing schemes, exploitation bf some remaining small-scale opportunities, and to sugar development. 1/ Tentative data releaied from the Agricultural CenSus indicate a lower cultivated area (See Statistical Annex, Table 53). - 14 - 4.03 No systematic survey of soil erosion and fertility problems has yet been undertaken but there is sufficient empirical evidence to show that such problems should be of serious concern. The traditional means of culti- vation employed by smallholders have certain built-in deficiencies. Unless manure or fertilizer are applied, the burning associated with shifting cul- tivation leads to a slowly deteriorating soil fertility; individual ownership of cattle, where it is combined with communal ownership of the land, tends to lead to overgrazing. The total cultivated area has increased with the expansion of cash crops and the sustained growth of the population, fallow periods have been reduced, and grazing areas restricted. Unless these trends are counteracted by improved rotational practices and other conservation methods, fertility and soil erosion problems are bound to become greater. The effects of mechanized cultivation on the soil structure may also pose problems. 4.04 All land in Tanzania is held by Government, and there are three types of occupancy: leaseholds (mainly estates), rights of occupancy arising out of African customary law, and right of occupancy by grant (e.g. Ujamaa villages). Most leaseholds have now been converted into rights of occupancy. In densely populated areas land is often cultivated on a permanent basis; on this land "rights to farm" are reported being sold, and various types of tenancy arrangements have evolved. In other areas shifting cultivation is practiced, possibly along with permanent cultivation of a small plot near the smallholder's house. The average holding is 1.2 ha but ranges between 0.8 ha in West Lake and 2.4 in Ruvuma. 4.05 Livestock represents one of Tanzania's major national resources; in total there are an officially estimated 14.5 million cattle, 1/ 4.5 million goats, 2.8 million sheep, 22,000 pigs and some 15-20 m!llion poultry. As the regional distribution of the cattle herd is basically determined by the areas of tsetse fly infestation, the southeast and large areas of the west are precluded from any extensive livestock production. (Map, IBRD 2915R). About 50% of the cattle are owned by smallholders and about 15% by nomadic pastoralists; the ownership pattern of the remainder of the herd (which is located in sparsely settled areas) is unknown. Tanzania has 15,000 grade cattle and about 50 large scale milk farms 20 of which are publicly owned. There are about 750 commercial egg producers. Area Expansion 4.Ob Tanzania's total population was estimated at 14.12 million in 1973, 13.05 million of which were classified as rural and 1.07 million as urban. On past trends the rural population is expected to grow by 2.5% annually while the small urban population will probably expand over twice as fast (5.2% an- nually). If these growth rates are maintained, the rural population will total about 21 million in 1992. Presently there is 0.34 ha of cultivated 1/ Probably over-estimated. Tentative figures from the 1972 cengus suggest that the cattle population is below 9.4 million. - 15 - land -r capita of rural population but if no new land is brought into pro- duction, this average will fall to 0.21 ha by 1992. To maintain the present tatio kt would be necessary to increase the total cultivated area of 4.5 tnillior. ha by an estimated 2.8 million ha -- an increase of 64%. In view of soil erosion and fertility problems, and since nei. land on average can be expected to have lower productivity, the area expansion requirements would irobably have to be even larger to maintain the same production base. Where Land availability is not a particular constraint the introduction of ox cultivation and more efficient farming practices would enable farm families to cultivate areas twice the size of their present farms. 4.07 A study of population pressures by BRALUP 1/ provides some indication of the scope for expanding cultivated area in each of the administrative districts. Given the stated objectives of assuring each family an annual cash income of Tsh 2,500, 2/ and each family member 2,000 calories per day and, given certain assumptions about yields, prices, cultivable area, grazing area etc., BRALUP HAS attempted to caiculate the "carrying capacity" of each district. (Table 6) Where the ratio of carrying capacity to actual population is significantly below one, there is clearly an urgent need to raise agricultural productivity and/or to find employment opportunities Eor an increasing population either in other sectors or outside the district. Where on the other hand the ratio is substantially above one, the potential ex:Lsts for opening up additional farming ai_as. While these estimates should be treated with caution until the underlying assumptions have been carefully eval- uated, (particularly those concerning available cultivable area) it is, never- theless interesting to note that 14 districts including Dodoma are characterized as overpopulated, while 30 districts would be able to support a considerably larger population. In view of rapid population growth eleven other districts are expected in the next few years to transfer from a balanced to an over- populated status. In general terms however, the opportunity exists for the opening up of new areas for resettlement and there can be no question that this must be an important part of any future agricultural policy. The need for active efforts to control the population expansion will largely depend on the availability and quality of unused cultivable land, and on the cost of preparing new areas for settlement -- neither of which can be determined at this stage. The expansion of beef production will iargely require that potential grazing land be freed from tsetse infestation. Yield Improvement 4.08 In present growing areas, improved cultivation techniques, where tried, have resulted in significant yield increases on smallholder farms (Table 7). No systematic survey of present yields has been undertaken, mnd since the improved yield estimates are mainly derived from experimental dlata 1/ Bureau of Resource Assessment and Land Use Pisnning (BRALUP), Rural Population Carrying Capacities for the Districts of Tanzania. 2/ Almost three times the level achieved in 1969 according to the Household Budget Survey. - 16 - (suitably reduced from general experience to reflect actual yields), the figures can only give a broad indication of the opportunities for further improvement. The estimates cannot be used, however to determine the comparative advantage of different crops, as this will vary from one agro-economic zone to another. In spite of these qualifications however it is clearly evident that yields of pyrethrum, cotton, maize, irrigated rice, sorghum, beans and cassava can be more than doubled with presently available innovations, while the prospects for coffee, tea, tobacco, rainfed rice and wheat, although somewhat less favorable, are also substantial. In addition, production of milk and poultry could be considerably expanded through the introduction of new breeds and improved management techniques. The prospects for various commodities are discussed in detail in Annex 2. Improved Farming Systems 4.09 On the basis of ecological as well as socio-economic criteria, BRALUP has identified 46 relatively homogeneous agro-economic zones 1/ but so far little effort has been devoted to finding optimal farming systems for them. Areas which require particular and urgent investigation include the relative potential for high value cash crops, the feasibility of introducing rotational improvements, soil conservation requirements, and the scope for integrating crop and livestock production. The opportunities for enhancing productivity by increased regional specialization in production have attracted much attention in Tanzania, as indeed the production of export crops is al- ready heavily concentrated in a few regions (Table 8). The scope for food crop specialization is limited in view of the high cost of marketing and transport and irregular market supplies, but gradual c6anges in this direction will of course take place in any event and will mean an increased reliance on the market. Land Use Planning 4.10 Thus the opportunities for increased agricultural production in a given zone are not easily identifiable and the situation in the Mpwapwa dis- trict (where a major Government effort is in progress) is typical of the difficulties involved. Maize is the predominant crop in this area, but recommendations aimed at increasing yields have been given only limited testing; the returns in these instances were extremely variable, and no information is available as to yield responses in exceptionally dry seasons. Trials with alternative crops such as groundnuts, confectionary groundnuts, sunflower, castor-beans, sorghum are almost non-existent. The scope for increasing farm size is unknown since there is almost no available information on cultivated area, present fallow requirements, cultivable area, nor on the possibilities for rotational improvements or the effect of mechanization on soil structure. Over-grazing has made a decrease in herd size imperative before any increase in productivity can be realized. 1/ Bureau of Resource Assessment and Land Use Planning, Agro-Economic Zones of Tanzania, 1973. - 17 - 4.11 For the present, therefore, each district must organize its program on the basis of whatever experience is available. In the future, however, it is cri ical that a comprehensive effort be made to compile more detailed iLnfonrAtion on the production potential of the different zones. Thus, increased efforts in land use planning and research should be designed to: (a) Provide an expanded data base for the various agro-economic zones with particular emphasis on soil conditions, climate pre- sent yields and farming systems, erosion and fertility problems, (b) Identify possibilities for the expansion of cultivated areas and grazing land as well as priorities for required invest- ments in roads, water, social facilities, and tsetse control, (c) Establish optimal farming systems (crops, rotations, soil conservation measures, integrated farming), (d) Identify yield improvement opportunities for different crops. Such planning will require a jo Lit effort by the BRALUP, the Ministry of Communications and Works, regional and district administrations, and the Min- istry of Agriculture (Research Divil ion, National Soil Service). The Ministry of Agriculture should assume overall responsibility for the coordination of these efforts, and a special land use planning unit needs to be established for this purpose. B. Demand Prospects Domestic Demand 4.12 We have attempted to estimate future domestic food requirements on the basis of expected increases in population and GDP and by using rough estimates of the income elasticities of demand and on the assumption that relative prices and consumption habits would be unchanged (Table 9). Our forecast shows in 1980 domestic food requirements will be 25 to 48 percent hiLgher than 1972 levels. Demand for meat, sugar and wheat is expected to increase most rapidly (4.75% annually), hile demand for cassava, millet, sorghum,. maize, and fruits would increase at a somewhat lower rate (about 3% annually). With production levels of many of the important domestic crops st:agnant and with increased consumer demand, Tanzania has had to import increasing quantities of agricultural products. In 1972 these reached a value of Tsh 350 million (US$50 million) or 14% of total imports and included 137,000 tons of maize and 47,000 tons wheat: imports in that year represented a 70% increase over the level that had generally prevailed during 1966-71. In 1973, the value of imports declined to Tsh 292 million but it is already clear that in 1974 the underlying unfavorable trends exacerbated by a poor har- vest resulting from failed or late rains will result in a level of food imports of the most serious proportions. During 1974, Tanzania will import not less than 315,000 tons of maize, 90,000 tons of rice, 60,000 tons of wheat and - 18 22,000 tons of wheat flour. As a result, imports of agricultural produce in 1974 are unlikely to amount to less than Tsh 1 billion (US$150 million). The major agricultural imports in 1972 and 1973 were: 1972 1973 (Tsh million) (Tsh million) Cereals 110.8 41.3 Sugar 74.8 92.2 Dairy products 73.5 62.0 Oilseeds and animal and vegetable oils and fats 43.0 28.8 Fruits and vegetables 21.7 15.0 Other 26.2 53.1 Total 350.0 292.4 Export Prospects 4.13 A little less than half of total agricultural production is marketed either domestically or exported and the domestic market for food is very lim- ited (28% of total food production). Consequently agricultural cash incomes are determined to a large extent by the export prospects for the major cash commodities with the eight most important export commodities (Table 10) providing about 60% of total monetary production (including hunting, fishing and forestry). Total agricultural exports were valued at Tsh 1,743 million (US$244 million), or 81% of total exports in 1973. While exports of major commodities have grown by about 3.6% annually in current prices over the period 1966-1972, using constant 1966 prices, the volume has actually decreased. While exports of tobacco, tea and cashew Lstirs expanded quite rapidly, coffee exports stagnated and those of cotton, sisal, meat, groundnuts and pyrethrum actually decreased substantially. Future world market price developments are expected to favor prospects for cotton and beef, while the value in constant terms of exports of other commodities is expected to decline -- this is particularly expected to be the case with tea and groundnuts. Overall, the world market situation for Tanzania's export commodities is in aggregate expected to deteriorate between 1972 and 1980. However, in view of the assumed continuation of world inflation, in current terms all commodities are likely to show substantial price gains over the 1972 level. - 19 - Nut- c tional Improvements 4.1 t information about nutritional conditions in Tanzania is very scarce. A ..ional food balarice shieet for 1972 estimated that the average calorie in- take w*fas about 2,000 cals. as opposed to the recoimended standard of 2,300 cals., and that protein intake was about 50 grams coT.pared with the recomnended ,evel 6- 0 grams. Symptoms of vitamin shortage are also frequently observed. Iavinp regard to regional and seasonal variations in both production an(i income, it is evident that a significant proportion of the population has an inadecuate diet. 4.15 As a general observation, nutritional deficiencies may have their origin in such factors as poor understanding of nutritional requirements, low productivity in subsistence farming, and insufficient purchasing power on the part of turban consumers. But problems in different agro-economic zones and for different income groups need to be identified, remedies devised and in- formation disseminated. This requires that research on nutritional problems Le intensified and a joint educational effort on the part of teachers, exten- sion agents and party leaders undertaken; training programs for the staff con- zerneA shiould thus be expanded. Fundamentally, however, improved nutritional standards of farm families mus (cepend on increased agricultural productivity and the development effort should em-phasize both cash and food commodities. Certain crops deserve particular at .ention as, for example, pulses, where the sccne for improving yields are good (Table 7) while research on high lysine -'aize varieties and drought resistent maize, sorghum and millet varieties would justify further attention. In the urban areas, demand is determined by effective purchasing power, which in turn may depend on employment creation efforts and wage and price policy. Institutional feeding and food fortifica- tion programs (for example, flour and lysine, sugar and vitamin A) should be considered. In view of recent poor food grain harvests, there is also a need lo review the famine relief capability within the country and to consider possibilities of establishing a strategic food reserve. C. Production Priorities W e have attempted to identify certain commodities which can be -xnecr ed to give the highest reward to public development efforts and in t-his orocess have applied the following criteria: (a) the scope for yield imnrovement anid area expansion; (b) marlcet prospects, i.e. expected prices *or export cormodities and domestic demand development and import substitution onnortunities for food crops; and (c) comparative returns to farmers' efforts. Table 11 summarizes the available information with regard to these factors but since worlcd market prices. domestic demand patterns and produiction tech- niques are subject to change, the situation should be reviewed periodically. High Priority Commodities 4.17 Maize. With world stocks of grain depleted, substantial price increases and supply difficulties can be expected if any of the major producers are hit by bad weather. Domestic supply variations and simultaneous diffi- culties in neighboring countries have underlined the vuinerability of Tanzania's position, and a decreased reliance on the world market must be given real priority. World market prices of cereals are expected to remain on a high level, and continued or increased imports would, if available, impose a real strain on foreign exchange resources. If self-sufficiency in maize is to be achieved by 1980, the present production level (1972 880,000 MT) will have to be increased by some 450,000 .MT. This increase can be accomplished by expanding the total cultivated maize area by 600,000 ha (a 50% increase) at present yields or by raising average yields from 7.5 to 11.5 quintals per ha. Some expansion of cultivated area will undoubtedly take place with population growth, but the major emphasis should be on the exploitation of the excellent opportunities for yield improvements. Domestic prices have recently been increased by some 40% but are still below the expected import parity level. As self-sufficiency is approached the possibility of substituting maize for some of the wheat imports can be explored and with fluctuations in domestic production an emergency storage program may also be contemplated at that stage. If a buffer stock of say 10% of total cereal requirements was thought appropri- ate to avoid costly imports and protect consumers, a production increase of a further 220,000 MT (making a total increase of 670,000 MT) would be required and such stocks should be held for one vear (until the outcome of the next narvest has been determined) and then either sold dcmestically or exported as the situation dictated. If such a program were to be established, yields would have to be raised by a further 2 quintals per ha. 4.18 Cotton. The relative position of all natural fibers on the world market has been strengthened, and cotton should continue to receive priority attention. Yield improvement opportunities are substantial and cultivation can be expanded, particularly in the Eastern Cotton growing area. Although both maize and cotton face favorable world market prospects, cotton produc- tion will generally give a better return to land and labor. To some extent the expansion of cotton production will thus be at the expense of maize cul- tivation, and will necessitate further improvements in maize yields. 4.19 Beef and Poultry. Expanded domestic requirements and favorable export prospects constitute a sound basis for further efforts to enhance beef production. Improved disease control and marketing facilities are expected to increase total offtake. Vast areas of grazing land presently infested with the tsetse fly represent a large unutilized resource. The demand for poultry products should increase rapidly and could be further accelerated if the beef price is raised to export parity and if promotion of efficient broiler production allows the price of poultry to drop below that for beef. Tile technical possibilities for expanding poultry production while decreasing the costs of production are excellent. Such an expansion will partly be based on a better utilization of crop residues, but it will also require a further increase in maize production. The development of poultry production would have the valuable effect of releasing more beef for export. - 21 - 4.20 Sugar. Per capita domestic consumption of sugar has expanded rapli.d during the last few years. The scope for increased production is good, a.d plans to expand existing estates and to establish an additional estate a-nnd factory in the Kilombero valley are well advanced. The implemen- t.ation of these plans should gradually eliminate import requirements and assure ,lf-sufficiency by 1977. 4.21 Tobacco, Pyrethrum and Oilcrops. The export prospects for tobacco and pyrethrum appear reasonably good; there is considerable scope for area expansion and yield improvement, and producers will be able to derive very satisfactory returns. Oilcrops (groundnuts, coconuts, sesame, sunflower) have been neglected and deserve increased attention initially with a view to attaining self-sufficiency and take advantage of a large unexploited growing potential. Confectionary groundnuts and soya beans also merit some exparLsion. Other Commodities 4.22 Coffee and Tea. Although the commodities mentioned above should be given priority, others cannot be neglected. Coffee now seems to offer reasonable market prospects ane ,ood returns from improved husbandry methods, but prevalent coffee berry disease needs increased attention in the northern growing areas. The smallholder tea program (which is considerably behind schedule) should be completed, but the prospects for further expansion on a large scale are doubtful in view of the unfavorable market outlook. The situation should, however, be kept under close observation as prices have recently improved considerably. 4.23 Sisal and Cashew. Sisal prices are subject to a seven year cyclical variation and have been rising over the last two years. This upturn has also been supported by the strengthening of the competitive situation against synethetics as a result of price increases on petroleum products. Although the future outlook is only moderately favorable, the rehabilitation of some existing estates, now underway, seems justified. Tanzania's cashew produc- tion faces increasing competition but prices are expected to remain fairLy sitable in constant terms. There are some opportunities for yield improvement, but the feasibility of new plantings on a significant scale is doubtful. A recent project to increase domestic processing could in time be further expanded. 4.24 Wheat, Rice and Pulses. Wheat consumption is expected to continue to expand rapidly but for the time being production will continue to be con- centrated on the Arusha and Kilimanjaro regions, since technical difficulties have yet to be overcome in the Southern Highlands and West Lake area. However, as Tanzania appears generally to have a comparative advantage in maize culti- vation it is doubtful whether a major effort for the development of wheat would be justified. Despite the 1973 decline, rice production is approaching a level which wOuld assure domestic self-sufficiency; however, export oppor- tunities are limited and planned production increases should attempt to do no more than keep pace with the expansion of domestic demand. Except for some - 22 - specialized cultivation (e.g. navy beans) pulses appear generally unattractive for market production. A shift in consumer preferences would be required to make increased cultivation for the domestic market and for subsistance con- sumption attractive. 4.25 Milk. Tanzania now imports considerable quantities of dairy pro- ducts, and domestic consumption can be expected to increase rapidly. Despite this and its high nutritional value, milk production has not been given a high priority. This is partly due to the low producer price paid for milk in recent years, but also to the fact that a rapid increase in production is unlikely to be feasible, since the cost of importing high yielding stock would probably be prohibitive, and since large scale parastatal production has been unsuccess- ful in the past and would result in prices above import parity. The founda- tion for future expansion should be laid during the Third Development Plan by increasing the cross-breeding capacity and through pilot programs to accumulate further experience on the proper approach to smallholder production. Table 5: SOIL AND Y-AINFALL CONDITIONS BY PEGICN Number of Total Total Area in Area with Average consecutive land area Cultivated land use adequate annuEl months with Region (1000 ha) Land Cless 6 a/Clt..ss5 b/ rainfall c/ rainfall over 100 mm (8) (%) ( %) (t) (mm) rairnfall Arusha 8,210 2.1 7 10 3 941 2-3 Coast 3,380 7.5 - 27 10 1,178 2-3 Dodoma 4,130 6.4 10 15 2 556 4 Iringa 5,685 4.2 29 21 54 1,205 5 Kigoma- 3,705 7.6 5 27 41 957 6 Kilimanjaro 1,320 13.3 13 18 24 958 3 Mara 2,175 9.4 4 - 19 1,209 2-4 Mbeya 8,315 3.1 16 36 24 1,44L 5-6 Morog'iro 7,310 5.2 20 33 61 1,217 5 Mtwara 8,275 4-4t 3 34 5 1,059 5 Mwanza 1,965 20.9 4 19 16 926 6 Ruvuma 6,125 2.0 17 14 66 1,214. 5 Shinyanga 5,075 6.7 - 9 - 862 6 Singida 4,935 3.2 8 11 - 648 4 Tabora 12,200 1.8 - 21 3 940 6 Tanga7 2,680 12.7 11 34 30 1,112 2-3 West Lake 2,.875 10.1 - 56 44 1,088 2-4 Total: 88,360 5.1 9 23 22 a/ Class 6: Soils of medium to high fertility with high potential (Map IBRD 28h ') b/ Caess 5: Soils of low to medium fertility with moderate potential (Map IB'U 280o4 c/ Adequate rainfall, as computed, consists of more than 750 mm of rainfall 9 years out of 10. Source: University of Yissouri; An analysis of the Tanzanian Food Crop Subsector (Draft, 1974). Table 6: POPULATION CAIRYING CAPACITY BY DISTRICT. OVERPOPULATED DSNSITY UWER25.01 cmZ DENSITY UNDER 25-0AWm Rapid Growth Average Slow Growth Rapid Growth Average Slow Growth Growth Growth Kilimanjaro Arusha Malya-Kwimba Kondoa Do,doma Newala Korongwe Mwanza Mpwapwa Iramba Lushoto Ukerewe Pemba I Shixnanga BALANCED DENSITY-OVER 25.(Vij2 - DENSITY UNDER 25.0/kA Rapid Growth Average Slow Growth Rapid Growth Average Slow Growth Growth Growth Geita Bukoba Ngara Handeni Kilosa Kasulu Mzizima N. Mara Tanga Maswa Nzega Lindi -ngwe Zanzibar I Mbulu Singida Musoma Same-Pare UNDERPOPULAT ED DENSITY OVER lO.CYlan2 DENSITY UNDER lO.0'km2 Rapid Growth Average Slow Growth Ra,,Id Growth Average Slow Growth Growth Growth Karagwe Bagamoyo Kisarawe Iringa Biharamulo Chunya Mbinga Masasi Mafia Nachingwea Manyoni Kahama Mbozi Njombse 4orogoro Sumbawanga Masai Kibondo M4ufindi Pangani Mtwara Mbeya Kigoma Mpanda Kilwa Songea Rufiji Tunduru Tabora Ulanga Note: Cless limits for the ratio between carrying capacity and actual population are: Overpopulated Under 0.8 Balanced 0.8 - 1.b9 Underpopulated 1.5 and over Class limits for rates of population growth are :- Rapid - over 2.8 percent per annum 1948 - 1967 Average - 2.0 - 2.8 percent Slow - under 2.0 percent Source: BRALUP, Rural Populetion Carrying Capacities for the districts of Tanzania. a/ Table 7: R7iTUT?NS TO LANlD AND LA?POR IN SMATLHOLD3R PRODUCTITN OF SSL1TCT'3D COPJIODITIP,S Price Present Techniques Improved Techniques 1973/74 Yield Gross Cost Gross Yield Gross Cost Gross return Margin Return Margin (Tshh OO kg) (Kg/ha) (Tsh/ha) (Tsh/ha) (Tsh/ha) (KRAh.) (TshbAi) (Tsh/ha) (Tah/ha) Coffee (cleaned) 450 600 2700 15 2685 1000 4500 260 4240 Taa (dried) 385 500 1925 - 1925 800 3080 330 2750 Tobacco (flue) 561 500 2805 445 2360 900 5049 780 4269 Pyrethrum 421 / 130 547 30 517 400 1684 274 laO Cotton ECGA la 1.,5 - 350 495 - 454 2000 1415 230 1185 WCGA 141.5 350 495 - 454 750 1061 194 867 Cashew 87 325 283 _ 283 450 392 - 392 Naize 35 750 263 8 255 2500 875 285 590 Paddy Rainfed: 61 900 549 46 503 1500 915 190 725 Irrigated 61 1500 915 46 869 3300 2013 239 1774 Sorghum 50 500 250 8 242 1500 750 175 575 Groundnuts 120 400 480 80 360 800 960 181 779 Beans (mixed) 60 300 180 45 135 700 420 85 335 Cassava 24 1100 264 - 264 3300 792 100 692 Wheat 44 700 30 0 15 293 1200 528 157 371 Milk (per cow) 75 300 175 115 60 1500 1185 907 288 8 n Eggs (per hen) 25 15 7 - 7 150 48 28 20 a! The table canno' be used to determ=ine the comparative Pdvatr.age of di.ferent crops, since the ir.provemant opportunities refer to zones where a particular crop is grown successfully end these zones will vary from one crop to another. Labor requirements will vary between crops and with improvement in technique. Investment in crop establishment is not included among costs. b/ Weighted average of AR and BR3. c/ Price: Tsh 30 per 100 eggs. d/ ECGA: Eastern Cottor Growqing Area WCGA: Western Cotton Growing Area Sou-ce: I4ission Estiyn2tes TAOLE 8s PERCENTAGE CCNTRIBUTICN BY -?EGION TO MARKETED PRODUCTION aj Y L / # a/ a/ b/ b/ § D Sisal Cotton Coffee Coffee Tobacco Pyre- Sugar Cashew Tea Cereals Beans Cassava Oil Bananas Lint Mild Hard Flue thrum Pot,atoer, Cropo Ar%Mm 4 0 22 10 51 26 10 3 4 15 Cat 3 1 27 1 - 3 3 0 Dsdma 18 I 0 45 Iringa 0 44 48 , 35 8 2 2 1 6 Kigoa 0 0 4 10 5 3 10 KilimanJaro 4 1 58 4 4 2 2 1 34 M.ars 8 5 8 3 7 3 5 lbmya 0 13 6 38 0 23 7 2 4 1 11 Norogoro 20 3 4 42 0 4 6 1 3 3 1tvare/l"& 1 63 1 - 2 24 0 l4ana 38 0 2 17 41 0 2 Favwaa 6 8 2 0 1 13L Six-ana 37 3 - 2 _ Singida 1 5 0 0 4 Tabora 8 50 3 1 6 4 1 TaWaga 68 1 0 2 39 4 33 20 3 3 West Lake 3 91 7 3 0 13 1 - 16' Total 100 100 100 100 100 100 100 100 100 100 100 100 100 100 Total marketed quantity ('000 202 76 47 9 2 88 111 8 455 46 326 24 229 tons) s/ 1970. 1 l972. DisiitrY of Agriculture, AmusL Report 1970 and wnmblished data. Table 9: DOM!-STIC FOOD CCMMODMTY REQUIREMNTS a/ Annuol Growth 1972 1975 1980 1972 to b/ b/ 1980 '000 MT '000 MT Index '000 MIT Index % Cerp-ls Wheat 140 159 114 199 14,' 4.5 Paddy 172 190 110 231 134 3.7 Maize 1019 1114 109 1338 131 3.5 Millet/Sorgham 346 375 108 429 124 2.8 Starchy foods Potatoes 113 124 110 146 129 2.9 Sweetpotatoes 234 259 111 305 130 3.0 Cassava 2000 2165 108 2469 123 2.7 Plantains, Banana 1206 1316 109 1517 12', 3.0 Sugarcane 1549 1762 114 22142 145 4.8 Pul es, nuts & seeds Pulses 16 181 111 218 134 3.8 Groun,lnuts 31 35 113 44 142 1-5 Coconuts 297 331 111 398 13L 3.8 Cashewnuts 21 24 114 30 143, 4.6 Cottonseed 149 1-.8 113 208 139 4.2 Other 33 37 112 46 139 4.2 Vegetablas Onions 43 48 112 59 137 4.1 Other 670 ;45 111 903 136 4.0 Fruit Citrus 28 31 111 36 129 2.9 Pineapple 34 37 109 45 132 3.6 Other 298 328 110 391 131 3.5 Meat Cattle ('000 head) 1038 1189 115 1519 146 4.9 Sheep ( ) 508 583 115 733 14)4 4.7 Goat ( " ) 1002 1133 113 1427 142 1.5 Chicken( " ) 10,60 12750 116 16250 148 5.1 Pig ( " ) 20 22 110 28 140 4.3 ELgIs- 25 28 112 35 140 4.3 I'ilk Cow 812 910 112 1108 136 4.0 Goat 7 8 114 10 143 1.6 a/ Assumptions: See Statistical Annex, Tables 19-20. b/ 1972 = 100 L,ource: Mission estimates. See Statistical Annex tables 18-22. - 28 - Table 10: EXPORT PRICE FORECASTS Index of Index of Volume Volume Realized Index Prices Exported exported Tanzania of Prices 1980 a/b/ Average ('000 MT ) Erport 1980 M (Constant 1969-72 Price (Tsh/MT) (current terms terms (1965-68=100) 1972 1973 1972 1973 1972=100) 1972=100) Cotton 89 64.5 60.4 5216 5550 218 100 Coffee 107 54.7 60.5 7000 8222 206 94 Sisal 87 153.1 107.4 946, 1996 163 74 e/ e/ Cashew (raw) 128 112.9 109.9 1331 1285 206 94 Tea 137 9.2 9.5 5852 5716 138 64 Tobacco (flue-cured) 154 5.6 n.a. 8792 9117 184 84 Beef 64 3.3 1.5 12832 12098 240 110 Groundnuts 56 c/ 3.4 c/ n.a. 2123 n.a. 163 72 e/ e Pyrethrum 84 0.162 0.137133853 n.a. 206 94 (extract) d/ d/ Total - - - - - 201 92 a/ The relation 1980 to 1972 in IBRD price projections. (April 8, 1974). b/ Corrected for world inflation. c/ Exports and local sales; Index 1970-72 in relation 1967-69. d/ On the basis of 1972 export volumes. e/ Mission estimptes. Source: Economic Survey 1972/73 IBRD Commodity Papers (unpublished) April 8, 1974. MoA Market Statistical Report. Table 11: C4MN0DITY PRIORITI5S Index of 1980 Degree of Opportunities Relation Market Prospects National to to Price Dom-_stic Self- Increase i Competing Forecasts Demand i su-fficiency Product- Commodi- Remarks Priority (1972=100) (1972= 1972 ivity c/ ties d/ l00) (d)-_ Coffee 206 - 1.58 _ Scope for modest expansion; particularly yield improvement. Tea 138 1 _ l.L3 - Tobacco 184 _ _ 1.81 Superior High Pyrethrum 206 _ - 2.73 Superior High Cotton 218 - 2.00 Superior to E& tern cotton growing area High cereals merits consideration Cashew 206 143 - 1.39 (Considerable opportunities Sisal 163 - -- to increaee productivity Maize 255 131 86 2.31 Sup. to sorghum High Paddy Rainfed 286 13)4 100 1.67 - Approaching self-sufficiency Irrigated 286 134 100 2.20 Capital intensive Sorghum 227 124 92 2.38 Inf. to maize May merit consid. in dry areas. Groundnuts 163 142 94 2.16 Sup. to cereals Also other oilcrops merit High consideration Beans - 134 109 2.48 Inf, to cereals Important for subsitance diet. Cassava - 123 2.62 Good on marginal Some exnort oDuortunities l and Wheat 268 1142 70 1.40 Low comparative advantage. Suitable expansion areas not confirmed Sugar 185 145 69 n.a. _ High Beef 240 146 106 Some Opening up new areas HIgh Milk - 136 89 4.80 Difficult to expend rapidly i,oultry prod. - 145 91 2.86 High a! Ratio projected expor-,, price 1980 to realized export price 1972 in IPRD price Tr6jection Aprl b/ Index estimated food requirements 1980 (1972=100) See table 10. c/ Ratio 3ross margin with improved technique to gross mergin present technique in smallholder production (See table7) d/ Competition for land and labor. Conditions will vary between zones. -30 - V. FARMERS' INCENTIVES 5.01 Having reviewed production potentials and priorities, we now come to consider how, in the context of Government egalitarian and economic objectives the development of small farming can best be promoted. In doing so, it is relevant to review past efforts, the constraints which have been experienced and the remedial measures which we believe it is now important to introduce if there is to be a better prospect of success in the future. These matters are discussed under the headings of Farmers' Incentives, Public Services, Manpower Development and the Investment Program and in the first of these chapters we consider price policy and the current efforts to trans- form the rural structure. A. Price Policy 5.02 Relation to World Market Prices. The comparative advantage of a particular country can only be measured in relation to the world market. A commodity will be exported if farmers find its production attractive in comparison with other opportuni_ies at or below the export parity price, that is the price received abroad less all marketing taxes, processing and trans- port costs. Similarly, a country w ll find it feasible to substitute for imports of a commodity if farmers find it attractive to produce at or below import parity price. Where self-sufficiency in a commodity is not achieved, there will be an advantage in raising its price (provided it is still below import parity) until domestic supply and demand is in balance. Conversely, where domestic surplus occurs at a price above export parity, the producer price should be adjusted downward to maximize GDP. If domestic prices are below export parity, opportunities are foregone and a lower rate of growth results and if resulting total exports are inadequate compared with overall import requirements, this may be an indication that the country's exchange rate is over-valued. This reasoning is obviously somewhat abstract, since parity prices fluctuate and are difficult to determine, but they are, nevertheless, the best available benchmarks. 5.03 Producer prices have generally been closely related to world market prices for export commodities while there appears to be a weaker rela- tionship for commodities mainly consumed within Tanzania. The domestic price of maize was close to but below import parity in the period 1968-72, while at the same time the wheat price was considerably above. World market prices rose sharply in 1973 and the domestic maize price was significantly increased but it is still substantially below the world market level expected to pre- vail during the remaining part of the decade. 1/ The domestic price was fixed having regard to the price level in neighbouring countries, in the hope of keeping down consumer prices, to a subjective assessment of farmers' expec- tations and supply response, and with a desire to avoid downward price adjust- ments in future. In view of the large imports of maize, and since most other commodity prices were increased at the same time, it is essential that Govern- ment analyze the supply response with much more precision in future and that 1/ The maize producer price has again been increased in October 1974 and is now close to import parity. - 31 - it should be prepared to make further price adjustments promptly if and when necessary. It is unlikely that Tanzania will be in a position to export sub- stantial quantities of maize 1/ because, given the high transport costs to Europe, yields would have to be about twice the present level. Neighbouring countries have favorable prospects for reaching self-sufficiency in maize production and it is thus not realistic to aim at these markets. In contrast, the domestic rice price has been close to import parity in the past and is expected to reach close to export parity in future, but in view of quality difficulties exports are unlikely to be competitive on the world market. Since supply and demand appear to be in balance at present prices, no change is necessary. In spite of recent increases, the domestic beef price is still below export parity and the gap is expected to widen. Prices should thus be gradually increased to improve incentives. 5.04 There are, however, certain instances when there may be advantages in departing from a situation where domestic prices bear a direct relation to world market prices. The Government may wish to even out short term price fluctuations; it may wish to promote self-sufficiency to protect against world food shortages; to give producers in remote areas the same opportunities as other producers; to protect consumers against price increases. It may wish to generate development finance by taxing producers of high value crops, thus giving them a lower effective price, or it may establish price incentives in order to promote a new export crop. 5.05 Stabilization. Temporary or cyclical variations in world supply and/or demand for export commodities will result in fluctuating returns to the Tanzanian farmers; these are generally not ba3anced by changes in produc- tion, and may result in considerable hardship and temporary disruptive shifts in production. In certain respects, therefore, price stabilization has attractive features but very real difficulties are involved. Future world market prices are not easy to project as consideration must be given to both long term trends and the size of the variations around these trends which may be expected. Funds must be built up during times of rising prices and must be kept in liquid form. The temptation to use these often sizeable funds for other purposes in tight budgetary situations is substantial. Cotton is the only commodity for which a stabilization program is presently in effect and here the funds accumulated seem excessive in relation to requirements and a closer link with world market prices should be re-established to increase farmers' incentives. In retrospect it seems clear that pyrethrum production would have benefitted from a stabilization program, and provided farmers' incentives can be safeguarded, consideration might also be given to the estab- lishment of such funds for tobacco, cashew and possibly some oilcrops. In cases where Tanzania has a sizeable influence on the world market (sisal, cashew, pyrethrum) or where commodity agreements are in effect, it may be necessary to supplement the price stabilization program with producer quotas. At this time there appears to be no justification for such restrictions. 1/ Except possibly in connection with an emergency storage program (para. 4.17). - 32 - 5.0fi Domestic self-sufficiency. It will probably not be necessary to raise prices of maize above import parity to reac" domestic self-sufficiency. It se9is probable, however, that the milk price will have to be fixed above the import parity level in order to provide sufficient initial incentives for the promotion of smallholder schemes, as these are both risky and capital intensive. 5.07 Uniform Prices. In order to equalize incentives and promote development in remote areas, Government has increasingly tended to apply a uniform pricing system although the amount of regulation varies. Bananas, plantains, potatoes, sweetpotatoes, fruit, vegetables, meat, eggs and milk (outside schemes) are sold freely without intervention. On the other hand, uniform producer prices are laid down for maize, sorghum, cassava, cotton, cashew, tobacco and sugar. Producer prices of coffee, tea and sisal vary from one place to another when marketing costs are deducted from the realized export prices. Into-store prices 1/ are established at a uniform level throughout the country for oilseeds and paddy, while in the case of wheat and pyrethrum one price is fixed for the northern production region and one for the southern regior. In these circumstances, the producer price will vary when the cooperative cost of bringing the produce from the buying point to the regional store is deducted although generally, the union fixes the same producer price throughout its region. In contrast, the uniform pricing system is not applied to most farm inputs and the cost to the farmer thus varies with the cost of transportation. 5.08 Cooperative marketing costs vary substantially from one society to another due to differences in volume of trade, location and efficiency. A fixed margin between into-store and producer price therefore creates considerable difficulties. For example, in the case of maize the price is set lower than the estimated cost of even the most efficient societies (Table 12) with the result that societies accumulate debts with their union, and through it with the National Bank of Commerce, and some are unable to pay farmers in cash when produce is delivered. We doubt whether the very real problems of cooperative inefficiencies can be overcome by fixing tight margins in a situation where it is known that overdraft facilities will be easily available and where in the last analysis, societies know they will be baled out. Rather, we believe that the problems will have to be attacked more directly by the amalgamation of societies and the upgrading and strength- ening of management. A similar situation exists in the parastatals where margins are fixed, although here they appear to be more realistic. Again, a more direct way of dealing with parastatal inefficiencies seems preferable. 5.09 While a uniform average into-store price may benefit some of the poorer regions (e.g. Ruvuma, West Lake, Kigoma and Mara), others such as Dodoma and Iringa will suffer. In a large country such as Tanzania, uniform Prices will in the long run result in a serious misallocation of resources 1/ Price paid by the marketing parastazal to the regional cooperative union. - 33 - and increased transport costs. Such a system is thus not an efficient way to solve low income problems and direct investments toward low income areas, subsidies or tax exemptions would be a much more suitable means for attaining egalitarian objectives. In addition, a system of uniform producer prices imposes a heavy administrative burden. We would, therefore, propose that a system be gradually developed whereby into store prices are fixed for given locations on the basis of transport costs to the main market. 5.10 Consumer Protection. Given existing income differences between the urban and rural population, there is little reason to suggest that farmers' incomes and incentives be sacrificed in order to protect urban consumers. The problems of the urban poor and unemployed can otherwise be alleviated within the framework of a social welfare system and not through price policies. At mid-1974, the maize consumer was protected by Government's decision to drive the cost of imports down to the domestic level. It is unlikely that Government can afford to maintain the high level of subsidy on the present scale of imports over a prolonged period and some consumer price increase therefore seems inevitable. It would, therefore, be preferable that such an increase should derive from a higher domestic producer price designed to increase production and permit a declint in imports. 1/ The effects on the consumers will of course depend on the proportion imported and the remaining difference between domestic and import prices. 5.11 Revenue Generation. Although ideally as much as possible of the realized export price should be passed on to the producers, in order to raise development finance Government may wish to tax some of the profit on high value crops. If so, the deduction should be made in the form of an explicit and identifiable cess rather than by allowing parastatals to accumulate large uncontrolled profits (cotton), and its size and structure should be such that production and quality improvements are encouraged. There is a need for a review of existing taxation (particularly the coffee cess) in this light. Stabilization measures and input subsidies shoild simi- larly be carried out through explicit charges in order to allow an assessment of parastatal investments and efficiency. 5.12 Production Incentive. Where a commodity has an exp.rt potential, it may be desirable to offer an incentive price during a promotional period. As an example of this, Tanzania is presently importing vegetable oil DUL DriciS for oilseeds remain below import parity. Oil crops deserve particular em- phasis because of their considerable production potential and import substi- tution and export opportunities, but such a program must be accompanied oy substantial price increases that would initially put the level above export. parity. This in turn may have further reperLussions on the maize program, and would have to be countered by extension efforts to raise productivity. 5.13 Price Administration, Most price and marketing decisions in Tanzania tend to be made on an ad hoc basis and with a lack of information 1/ Both producer and consumer prices were increased in October 1974. - 34 - on the cost of and benefits of optional courses of action; it is not sur- prising therefore that many contradictions are apparent. The Ministry of Agriculture has a competent Marketing Development Bureau, which is not regu- larly consulted on important policy matters and there is also an Agricultural Products Price Coordinating Committee (APPCC) made up of various ministry and parastatal representatives but with the usual weakness that its members are usually fully occupied with various other duties. There is clearly a need for a fuller utilization of the Marketing Development Bureau and that it should be strengthened with specialists that can devote their full time to the complex task of defining objectives and priorities and formulating coordinated policy recommendations. B. The Rural Structure (Ujamaa Village Approach) 5.14 Government is attempting to lay the foundation for a socialist society through a change of the rural structure toward village settlements. The objective is to assure a more equitable income distribution, participation in planning and decision making, a rapid increase in production and the mobi- lization of local resources. The creation of ujamaa villages is generally preceeded by considerable persuasive efforts by TANU and the local admini- stration, and the initial development is supported by Government grants. Such villages then receive priority in the allocation of extension and other field personnel, investment in water development, health and education facil- ities and cooperative services, and when firmly established they become eli- gible for production credit. Their number has expanded rapidly, and in March 1974 about 20% of the rural population lived in ujamaa villages which vary considerably in size (from 30 to 1,800 persons) but average about 500 persons (100 families). There are also considerable regional differences in the ujamaa development. Where commercial farming is far advanced, few villages have been established. The six regions with the highest per capita GDP thus account for less than 10% of the ujamaa population, while the five "poorest" regions contain 70%. 1I1iiuaa villages have tended to be located in areas where there is extensive uncultivated land and thus under the initial concept, the collective field (ujamaa shamba) could be established without sacrifice of private cultivation. No statistics exist on the amount of collective farming but it probably represents less than 1% of total cultivated area, and with the abandonment of this objective is now unlikely to increase. Yields on the ujamaa shamba are almost consistently reported to be lower than those on private plots. 5.15 The advantages of bringing people together to facilitate develop- ment efforts and the provision of essential education, health and water supply facilities are well recognized, although as to farming, there are disadvan- tages as well as advantages. In spite of the warnings, however, there is a tendency to "go ujamaa" simply because of the priority villages receive in the allocation of Government services. Instead of an attitude of self-reliance there are indications that these villages have become more dependent on - 35 - Government than was formerly the case. The investment proposals put forward by the villages and the districts show very little emphasis on self-help proic- rs and productive investments, but ar. overwhelming interest in the impic.-,-ment of social services, probably in part encouraged by stagnant family incomes. The villagization program has thus absorbed a very large 3hare of regional (and national) resources as well as the limited admin:Lstra- tive capacity. But at least as important is the empirical evidence that the program has disrupted agricultural production, frequently through villagiza- tion at the time of planting or harvest, I/ because farmers for a while have to divert their energies to building new houses and because they have to assimilate to a new farming environment. While such production losses cannot be quantified, there seems little doubt that they are an important contribut- ing factor in the 1974 food grain crisis situation. Although collective farming is no longer an objective, this is not known in all parts of the country and thus remains a disincentive as does the general uncertainty surrounding the timing and manner of villagization. 5.16 Nor is villagization without its technical problems. Rotational practices that will enable permanent cultivation around the village have yet to be developed and a concent- Lion of the cattle population tends to cause overgrazing in the vicinity. With individual members each claiming a share of good land and'"land adjacent to Lie village, the risk of increased fragmen- tation is apparent and more distant fields tend to be given insufficient atten- tion. The traditional scattered settlement pattern emerged in many areas as a way of minimizing the risks of production losses because of natural hazards such as hail storms or insect attacks. 5.17 Where land is plentiful or ox cultivation is prevalent, collective farming or block farming as now advocated in Tanzania offers few economies of scale. Nonetheless these types of farming are widely regarded as a justi- fication for mechanization and it is thus not surprising to find that there is considerable demand for tractors in the newly created villages and t:ractors are offered as prizes to those which are the most successful. There are, however, several problems inherent in the successful introduction of tractors. Mechanized cultivation is only feasible where farmers have achieved high standards of husbandry, and where the tractors are fully utilized and yroperly maintained. Tanzanian, as well as international experience, has underlined the difficulties of bridging the gap between traditional and mechanized farm- itlg; consequently where tractorization is attempted the economic results are generally disastrous. Joint activities (such as spraying) are of course encouraged and facilitated when individual farms are arranged in a bloik pattern as part of resettlement and the joint production of new commod:Lties such as poultry, milk, fruit and vegetables will be encouraged. 5.18 Although smaller villages appear to be more efficient as production and planning units, a certain volume of marketing business is necessary to 1/ Farmers in Geita district were unexpectedly villagized in April 1974 shortly after the approval of an IDA supported cotton and maize project for that district. This will necessitate a change in the Project's structure and, initially at least, will delay implementation. - 36 - fully utilize staff and spread overhead. The optimal market society is thus much larger than the ideal ujamaa village and the break up of existing mar- keting societies into multipurpose village cooperatives is already creating problems of economic viability, while the tendency to create large villages will endanger the planning function. To resolve this difficulty we suggest that an additional level in the cooperative structure be created - the ujamaa village society - which would be affiliated with, but not replace, the primary society, and serve as a buying and distribution point for it. 5.19 In all the circumstances we can only recommend a slower rate of village development and more careful planning in its implementation. If areas for ujamaa development were to be selected and phased on the basis of a variety of criteria, but importantly including the degree of local commit- ment to the self-help concept, Government investment as an incentive to pro- mote new villages would be reduced and its support could be concentrated on areas where the new system would bring the greatest gains. The villagiza- tion of densely populated areas, for example, would seem to have low priority since the advantages of participation in planning and the provision of ser- vices can be obtained without it. :<'le 12: PRICTI AN'D N'K-TTtIG MARGINS FO2 SOME SELECTED 5c -t0DITI-S (1973/74 Tsh/MT) Commodity Price Margin Producer Into Out of Coop. Para- Est. Actual Store Store statal Coop. Parast. Cost Cost 1972/73 1970/71 Into-Store Systemr Paddy (Gr. 1) 570 750 910 180 160 141-254 134 Wheat 4W2 639 b9 197 -5 74-218 65 Groundnuts 1,040 1,' 1,&M 475 1 3 n.a. 161 Sunflower 550 -735 851 185 116 216-390 83 Castor 550 t5 983 310 123 180-464 112 Sesame 1,250 1.mu 1,766 350 166 218-558 133 Producer System Maize (priority) 350 390 461 40 71 2 98-224 61 Maize (non-priority) 300 390 X_ 90 7n ) 61 Sorghum X_ 610 n.a. 110 n.a. n.a. n.a. Cassava 2W0_ 0 120 61 114-243 n.a. Cashew (Gr. 1) 90 1j 1, -230 3 211-511 186 Note: Underlined figures fixed by Government. Not underlined producer prices recommended but not fixed by Government. Source: Ministry of Agriculture, Marketing Development Bureau. NAPB. GAPEX. Prime Minister's Office, Produce Costings 1972/73. - 38 - VI. PUBLIC SERVICES 6.0 The institutional framework for rural development has recently undergone fundamental and rapid changes. As a result of the decentralization of the Central Government administration in 1972 (Chart 8524), district admin- istrations have been made directly responsible for most aspects of development and are provided budgetary allocations for this purpose. At the regional level, the administrations have coordinating and advisory roles and are di- rectly responsible to the Prime Minister's Office while technical ministries are given the responsibility for sector planning and coordination. The para- statals (Statistical Annex Tables 36 and 37) are the other main force in the development process; their number and authority have increased rapidly in recent years and several marketing paraststals have also been given produc- tion responsibilities. 6.02 The agricultural development responsibilities of the major institu- tions are summarized in Table 13. The Party (TANU) has an elaborate organi- zation with 10 family cell units, ward, district, regional and national com- mittees and with decentraliaation, it has been put firmly in control of the planning process (Chart 8525). The district administration is in charge of the formation of ujamaa villages, crop and livestock extension, veterinary services, construction and maintenance of district roads, smaller investment projects and evaluation of progress. 6.03 The cooperative movement has three tiers. The basic unit is the network of 1,300 marketing societies which now covers the entire country and which is the legal channel for the marketing of all major agricultural com- modities. All marketing societies are in turn affiliated with a union which is organized on a regional basis and provides the link between the societies and the marketing parastatals. The unions which are also involved in retail trade and transport are affiliated with the apex organization, the Cooperatives Union of Tanganyika (CUT) which serves as the spokesman for the movement on various parastatal boards and negotiates with Government on matters such as commodity prices. The Cooperative Service Commission is responsible for recruitment and placement of cooperative employees earning a monthly salary in excess of Tsh 650. Crop buying is financed by overdrafts on the National Bank of Commerce, and to a limited extent, mainly in connection with major crop development schemes, the Tanzanian Rural Development Bank (TRDB) distributes and extends credit for agricultural inputs to cooperative societies. The tasks of the marketing parastatals vary considerably (Table 36, Statistical Annex), but normally produce is taken over from the Union and is exported or prepared for domestic consumption. The State Trading Corporation sells fertilizers, insecticides and implements on a cash basis. Public enterprises also play an increasing role in transport of agricultural produce. The link between paras- tatal planning and the regional and district planning is weak, and there is a lack of coordination between paras,taLals. - 39 - 6.C The Ministry of Agriculture (Chart 8522) is in charge of agricul- turdl. research, training of extension staff, price policy, seed multiplica- tion and supervision of the agricultural parastatals, one of its main tasks being the planning and monitoring of the agricultural sector. Although re- sponsi bility for rural development has been decentralized, the Prime Minister's Office (Chart 8523) provides overall policy direction, coordinates regional plans and budgets and will if necessary assist the Regions in preparing their development programs (Planning Division). Cooperative registration and audit is tihe responsibility of the Commissioner for Rural Development within the Prime Minister's Office while day-to-day inspections are undertaken by district staff. The Commissioner is also responsible for guiding and monitoring the ujamaa village program, and for the training of both cooperative (inspection, cooperative employees and members) and ujamaa staff. 6.05 In view of recent major changes, the next few years should be de- voted to a consolidation of the established institutional structure. Organi- zation of research, extension methods, marketing inefficiencies, the expan- sion of input distribution, the organization of transport and the definition of implementation responsibilities will be areas of major importance in this consolidation process. A. Research and Extension 6.06 The existing research effort has serious defects, and reports on findings have been inadequate. The Ministry of Agriculture presently attempts to coordinate research but a Center is now needed to make an inventory of existing research results, to ensure that all work is properly and regularly reported, that-fndings are evaluated, informational material prepared, and the mass media utilized to the fullest extent to disseminate information about new findings. The research effort should be organized with reference to the different agro-economic zones established by BRALUP and a clearly defined area of influence established for each research station, an exercise which is expected to reveal some gaps and duplications in present coverage. There is a clear need for local testing of results and more attention must be devoted to food crops and to an improved understanding of existing farming conditions (soils, climate, yields, systems, input requirements, erosion and fertility problems) within the different zones and to the development of improved farm- ing systems. In the past the link between research and extension has been extremely weak and to help overcome this an annual meeting should be held at eacn research station with representatives of the regions and districts con- cerned, the proposed Research Center, the parastatal commodity specialists and the Ninistry of Agriculture. At this meeting a program for the following year should be set up to determine which results should be disseminated to local farmers, what surveys and local testing should be carried out and what research be given emphasis. The staff and the financial resources of the stations would have to be strengthened to allow them to undertake these ex- panded responsibilities. - 40 - 6.07 The extension work has suffered from deficiencies in researca, marketing, input supply and credit. It has also had difficulty in getting new technological ideas across to farmers, probably because, as is frequently the case, there is too much emphasis on exhortation and not enough on demon- stration. In cooperation with research staff, an observation field should be established in each agroeconomic subzone of the district to verify the feasibility of new practices and crops ana the agricultural competence of tne staff. A dense network of smaller plots could then be established to demon- strate the verified techniques to farmers using the model farmer approach. Each village would thus be asked to elect a farmer who would be given regular training at the Rural Training Center (RTC) 1/ and who subsequently would establish field demonstrations reflecting the new tecnniques on his land. An attempt stiould also be made to train the wife of tne model farmer in both farming and household improvements so as to provide an additionai clhannel between tne village and the extension staff. The extension agents who would each work intensively witn 10 - 15 model farmers snould also actively partici- pate in the agricultural instruction at primary schools and in the design and Fai.iagefient of the school farms. They in turn would be supported by the re- gional agricultural establishment, whicil would be supplemented with a competent agriculturalist to establish and supervise observation fields and demonstra- tion plots. The extension staff would tnus be responsible for day-to-day managemeint while the research organization would analyze results. The new demonstration emphasis will however require retraining of staff and tthe exten- sion service will also need improved transport facilities to allow for closer supervision of agents and model farmers. B. Marketing 6.08 The present marketing system is characterized by high costs, bad service and delayed payments, and it is one of the major constraints to agri- cultural development. The primary societies are generally too small; market- ing costs and thus the viability of the society are closely related to its volume of ousiness. The unit cost at a volume of 2000 WIT is betwen 20 and 50% of thie cost at a volume of 200 MT, depending on the type of produce han- dled. 2/ In 1969 about 40% of the societies operated at a loss and 20% were insolvent. 3/ The amalgamation of these societies, perhaps to coincide with administrative boundaries should therefore be given a high priority. 1/ There are presently 35 RTC in 30 districts. The intention is to have one RTC in each of the 70 districts. 2/ Kriesel et al., Agriculturai Mlarketing in Tanzania. 3/ Economic Research Bureau; Analysis of tne Accounts of the Cooperative Societies 1967-69. - 41 - 6.u') However, the main reason for the poor performance of the marketing system is widespread managerial weaknesses. Tanzania has chosen to establish a siiigle channel marketing system, with the final stage of the marketing pro- cess handled by parastatal organizations. This system has the disadvantage of a lack of competition and prevailing high costs merit the strengthening of the Marketing Development Bureau to undertake efficiency research and give advice. The actual collection of produce from the farmers could also conceivably be publicly organized but this responsibility has been entrusted to the coop- eratives which to be effective require an active membership and competent staff. At the early stages of development, cooperation is made more difficult by members' illiteracy and their lack of understanding of business and administra- tive cooperative principles. The forced pace of cooperative development in Tanzania has resulted in limited member participation and reliance on staff while Government interference has reduced members' interest and sense of responsibility and further added to managerial strains. The Government has for example instructed the societies to buy all scheduled commodities and often to engage in wholesale distribution and transportation. It controls the hiring and placement of high level staff, regulates that members and non- members alike receive the same benefits and it controls cooperative education. The result has been high costs due to an excessive labor force, losses of produce, bags and cash and high rates for service (e.g. committee members' fees and transport). The cooperative inspection service has been of little assistance in provi'liag managerial advice or improved metnods of accounting and control and has often been reluctant to take firm action against corrupt staff and committee members. 6.10 There are two basic ways to improve the present situation. First, where cooperatives have a high level of membership and enthusiasm (generally wnere there has been a gradual evolution in response to local initiatives) they should be granted more independence - particularly with respect to employ- ment and management of staff, membership privileges and producer prices but inspection should also be strengtihened to assure proper accounting and rapid and stern actions in case of improprieties. Second, where the membership situation is unsatisfactory non-viable societies and unions should be dis- solved and the district and regional administrations should take over manag- erial responsibility. This would encourage better use of inspection staff, a review of the structure of marketing, the introduction of sound operating methods and establish a direct relationship between public decisions on market- ingu matters and their consequences. Cooperation is an essential element in thie collective effort, however, and the ultimate objective must remain the re- establislhment of viable societies. This can best be promoted by an active training program for farmers, leaders and staff, with particular emphasis on accounting and business principles (para. 7.06). 6.11 Input distribution and produce marketing are two of the most im- portant cooperative tasks and with limited managerial capacity, Government should show considerable restraint in assigning to the movement additional tasi;s. It may be possible, for example, to transfer wholesale distribution to the recently regionalized State Trading Corporation. Units should be established to carry out applied efficiency research and advise union manage- ment and so that experience gained in the course of this research is utilized in the training of staff members, these units should be attached to the coop- erative colleges (para. 7.02). - 42 - C. Input Distribution and Credit 6.12 Rapid improvement of yields requires conspicuous innovations, and experience has shown that it is easier to introduce something entirely new than to modify existing practices. 1/ In order to make the advantages of new techniques conspicuous, a package of innovations must be introduced at the same time. This package should among other things include improved seed, fertlizers and/or other agro-chemicals; the timely availability of such inputs thus becomes an extremely important element in the agricultural development process. The main distribution outlets for agricultural inputs are the coop- erative societies, the State Trading Corporation (STC) and the Tanganyika Farmers Association (TFA). In 1973 the cooperatives distributed 70%, STC 10% and TFA 17% of the total fertilizer consumption (66,400 MT). The use of fertilizers has expanded rapidly, but still averages only about 15 kilograms per hectare of cultivated area. 2/ In 1972, 25% of the fertilizer was used on tobacco, 25% on maize, 15% on cotton, 14% on tea, 9% on coffee and 17% on all other crops. The use on maize has expanded mainly through free distri- bution, financed through the regional Development Fund, 3/ and this became a major feature of the regional program in 1973, when fertilizer valued at Tsh 27 million was provided to farmers in ujamaa villages in ten selected regions. The Tanzanian Cotton Authority (TCA) presently applies surpluses from its marketing operations to provide inputs at 55% of cost to the producers. Improved ox implements have been developed by the Tat,zanian Agricultural Machi-aery Testing Unit (TAMTU) but production is very limited. Seed multi- plicaLion programs are presently being organized by the Ministry of Agriculture with USAID assistance and should be given full support. 6.13 The successful adoption of Inputs is closel, linked with measures designed to overcome the poor liquidity situation of the majority of the peasant farmers. The history of agricultural credit in Tanzania has been shaped by the change in policy from individual to cooperative lending and by the chronic difficulties in collecting repayments from borrowers. The Agri- cultural Credit Agency (ACA) was created in 1961 to meet the requirements of individual smallholders, but only 60% of the volume lent was recovered. In the interim, the cooperative movement had become the keystone of agricultural policy, and in 1964 the ACA gave way to the National Development Credit Agency (NDCA). Collection from the cooperative societies proved much more difficult than anticipated, and by the time the NDCA was abandoned in 1971, the bad debt provision amounted to about 40% of portfolio. The emergence of the Tanzania 1/ Ruthenberg, H. (edit.); Smallholder Farming and Smallholder Development in Tanzania, 1968 (p. 346). "Apparently the application of modern tech- niques has to come first and it seems to draw a slow improvement in general husbandry in its wake." 2/ This represents a lower rate than in Kenya but the utilization is about the same as in Malawi and higher than that in Ethiopia. 3/ Tsh 30 million, which supplements the normal budget and is used mainly for ujamaa village projects of various kinds. - 43 - Rural Development Bank (TRDB) coincided with the acceleration of the ujamaa village program. Seasonal inputs accounted for 56% of total lending in '972/73 the main borrowers being the cooperative movement (57%) and regis- tered ujamaa villages (20%). The arrears on the total portfolio amounted to 26% in December 1972, 87% of which were inherited from NDCA. Through collection, write off, and rescheduling, the arrears were reduced to 9% during the spring of 197i. Successful repayment has only been achieved where it has been possible to establish a firm link between the repayment mechanism and the marketing process (e.g. tobacco). In other cases (parti- cularly wheat and maize), farm machinery and transport repayment prospects are doubtful. The administration of cooperative societies and ujamaa villages leaves much to be desired and the options available to TRDB to obtain greater loan security (i.e. to refuse lending and recover loans) are, in spite of declarations to the contrary, seriously restricted by political considerations. 6.14 The provision of inputs must be an essential element of any de- velopment program aimed at improving agricultural production and income for Tanzania's 2.5 million farmers. As past experience indicates that tlue credit mechanism is not an apropriate instrument in the present Tanzanian situation, we believe that i rious consideration should be given to making inputs available to farmers below market cost. A reduction in price would also increase the incentives to use such inputs and would diminish the risks that substantial cash commitments at a low income level invoive in cases of crop failure. Before any promotion work can be undertaken, however, some assurance must be gained that these inputs would be efficiently used. Yields must be locally tested and returns calculated using real commodity and input prices, an adequate distribution network provided and a means developed to assure that the inputs will be properly applied. Promotional work should thus be concentrated initially on certain areas and crops. Some leakage to other crops and areas can be expected, but presumably the users are then aware of the benefits and the proper application. Precautions should also be taken to guard against the flow of low priced inputs across the borders. In order to avoid the emergence of two price levels and thie policing of trans- fers between smallholders and larger producers, the subsidy could be extended to present distribution chiannels. While completely free dis'tribution is likely to lead to wasteful use and snould be avoided, the level of price reduction should be fixed with tne aim of making the inputs 'attractive! to small farmers. Levels should be varied for different types of inputs; seed, for example, may be given less support in view of the corresponding saving of home produced seed. Tanzania Cotton Authority has experimented witn a 45% reduction, but for fertilizers and other agrochemicals it may be necessary to go as high as 75% in order to achieve rapid expansion of usage among low income producers. However, a more accurate determination of the level of subsidies will depend on further investigation of incentive levels and re- covery procedures which aspects also should be reviewed periodically. 6.15 Except for a possible grace period and at times of very abnormal relations between commodity and input prices (as presently is the case for fertilizers), it should be Government's aim to recover tlhe cost of such an operation in full. To accomplish tlhis, there are numerous options which re- quire careful study. For example, the cost of the input price reduction could be recovered by lowering overall producer prices, by increasing taxation or - 44 - through a combination of these methods. Table 14 illustrates the alternative of adjusting producer prices. The maize example in that table shows that, if market prices for maize increased as projected (Table 11), if fertilizer con- sumption quadrupled between 1972 and 1980 and if fertilizers were made availa- ble to farmers at 25 percent of current market prices, to obtain tne full re- covery of the fertilizer subsidy, producer prices would nave to be reduced by 19 percent in 1980 (it would have been 11 percent in 1972). However, the pro- jected maize/fertilizer price ratio would be 0.3 without tine subsidy compared with 1.1 with the subsidy fully recovered which would make this an attractive proposition. One problem associated with this method of cost recovery is that non-adopters would support adopters of the subsidy program and, moreover, since tne promotional effort would initially have to be concentrated in limited areas, some farmers would not be given the chance to use the subsidized inputs. Commodity prices cannot be lowered solely for those farmers (or areas) which nave received inputs, as these farmers could simply market their produce through other channels, although a special tax in promotion areas might be considered. Since a large proportion of present adopters are likely to be more progressive farmers, there would tend to be an undesirable transfer of income from smallholders to large farmers. In order to alleviate this in- equity, larger farmers could be subject to, for example, a cess on commodities produced mainly by high income gtoups (e.g. tea, tobacco, or coffee), the revenues from which could be applied to finance part of the input program. Part of the burden could also be shifted to consumers. 6.16 With inputs being made available substantially below cost TRDB lending would thus be concentrated on medium and long term loans. TRDB, .aowever, presently plays an active role in the procurement and distribution of inputs to the cooperative societies and should continue to do so in tihe future. In view of the increased volume, the greater variety of inputs and the importance of timely deliveries, consideration should be given to the creation of a separate department and ultimately a subsidiary to handle these cooperative responsibilities. About 22' of 1RDB lending goes to District Development Corporations, companies and associations, while only one smaller loan was made to a private individual in 1972/73. Wnen managerial capacity allows, it may be feasible to transfer parastatal and individual lending to another credit iiistitution in order to make TRDB into a specialized smallholder (cooperative, ujamaa) lending institution. - 45 - D. Transportation 6.17 The total volume of agricultural commodities (excluding livestoc'k produce and agricultural inputs) transported in 1972 was about 1.7 million MT (Table 15), but the demand for transport in the period July - December is about 2.7 times the requirements during the first half of the year. An increasing shortage of transport facilities has been experienced during the last few years, and this has resulted in spoilage of crops and delays in deliveries of inputs. In 1972 there were a total of 14,849 lorries in Tanzania, about 3,000 of which were licensed to transport for hire. TIhe major carriers with fleets of 10 or more vehicles have monopolized long distance transport. The smaller private operators have been restricted to short haul transport, and since Government has used its influence to depress rates in some areas, there has been a 40-50% decrease in the availability of private local transport over the past four years. The gap has been partly filled by the creation of transport wings at some cooperative unions and a hire pool of vehicles is also being established by the National Road Haulage Company. Cooperative transport has, however, proved more expensive than private haulage and there is now an urgent _ed to define the long term role of public, coop- erative and private transport. As management capacity is built up public transport could increasingly sha-i in long distance haulage. Since local trucking is a suitable small scale venture, private development should be actively promoted by credit and open tendering and with an appropriate rate structure, independent transporters should provide efficient transport services at the local/regional level. In view of the limited managerial capacity of the cooperative unions (which is already fully occupied with crop purchases and input supply) a further diversification of cooperative activity into the transport field should not be undertaken unless competition appears irnsuf- ficient, and in any case not until a suitable training program for transport management has provided the manpower capacity to efficiently organize and operate transport services. A proposed review of the transport industry, to be financed under the Bank's Tanzania Highway Maintenance Project should contribute substantially to the clarification of these issues. E. Coordination of Implementation 618 The recent devolution of Government administration to the districts makes it difficult to visualize the appropriate future management role of the production parastatals whose activities extend to many parts of the country and which provide, notably in the case of tea and tobacco, the close link needed between field and processing, substandial investments' and the special- ized farming skills required. In the strategy which we go on to recommend, we anticipate the development of a variety of intensive farming systems in selected areas and which, we believe, could include crops now being promoted by parastatals. At that time it may be appropriate to devolve some parastatal management functions to district authorities but for the time being, having regard to the rapid changes of the recent past and the dearth of management capacity generally, the responsibilities of the parastatals should not: be significantly changed or extended. Table 13- INSTITUTIONAL FRAMEWORK Reg. aiA Central Parastat- Rprvice Party District Admin. Cooperatives Banks als Admin. Planning s x x x s x Ideological x motivation Ujamaa village x x x formation Coop. inspection x x & registration Agricultural Price Policy x x Extension x x Supply of inputs x s x Credit x x Marketing x x Research x Road constr. & :-aint. x x Transport & storage a/ x x Project implementation x x x Staff training x Evaluation x x Seed multiplication x x a/ Also private Source: Mission interpretation TeblS 14 13CO' 6-`Y C0' r 71rILIZ P - IDY; riN ILLUiT:M i1O1 1972 1980 '"ert. Cost O !et'id :,"rb'-W I . '-~t. r Pr e cenlsor, 'PItion Crop used fertil. Qu;ntity _t- red CerL 'l. r n.rice d/ d .s u: cl ollit, t.,) subsidya/ of Crop mrnnt sx0si yi / of Crop ME-n' fertrl. prire (1000 MT) (1000 Tsh)('000 MT) (Tah/MT) (Tsh/AT) ('000 MT) ('000 Tah) ('000 MT) CTsh/MT) (Trh/f4T) ;-vrudy subqldv Cotton 8 7,200 240 1;0,'7 30 0 112, 0 3L 2,300 313 0.8 3.1 Coff'ee 6 5,40C 52 '5,343 lo 15 33,730 (.1 11,000 553 3.7 14.7 'olh 'cco 14 12,; 00 11 3,800 3 ]14 35 78,750 27 10,500 2,917 3.5 14 .O Tee 8 7,200 13 5,827 t,3 15 33,750 2h 8,ooo 1,406 2.7 10.6 Cereals 15 13,500 1455 2'4 h/ 30 65 146,23'0 768 1,000 p/ 190 0.3 1.3 Other crops c/ 4 - - - - 2C - - Total 55 200 a/ Assuring 75)' subsid,: ?r5iee 1972: TShs. 1200 rer NT; subsidy 'Shs. '00 per "'T. Prrea 1980: TShs. 3,000 rLr m,r; suwsldy 5hs. 2,2,0 per _MP. The subsidized proportIon mry be veried .or di Iferent inputs. b/ 14 ize price. c/ Assuming subsidy recovered from these crops. d/ Current terms. Source: Mission estimates. Table 15: MA3KETED QUANTITI13S OF AGRiCULT.IY?t PRODI;' '9Y ?,GIOr AND MONTh, 1972 a/ ('000 MT) Jan. Feb. MarIch April May Jwxie July Aug. Sept. Oct. tiov. Dec. Tote1 AruL.hz 40 40 1 1 1 h 30 32 29 6 C; 6 198 7 7 - 1 1 1 1 4 1C' 11 10 61 Dodoma _ _ 15 9; 284 3 - e 7 'ru 2 1 1 1 3 3 14 13 14 2 2 60 Kigom,- 3 2 2 2 4 c 11 11 9 4 4 4 6h Kmirr.,i ro 15 16 3 '8 P' C, 23 21 19 15 18 181Q -rn 14 3 - - 3 !4 22 25 16 7 6 4 94 !.bey& 9 8 1 _ 2 3 6 16 14 1)4 7 7 81i lk.orogorc 7 4 2 2 le 5 1? 1° 20 19 12 12 118 £1 twarc/Lirid. 16 16 1,. 1 1 1 3 3 5 19 16 16 111 !swariz;. 22 10 - - 1 10 10 32 29 27 27 27 193 VUvuml, 2 2 2 - - 3 3 3 4 4 3 2 28 Shninyangu - - - - 2 2 11 15 13 8 - - 5C 'ingid. - - - - - - 7 7 7 - 3 2 Thbora 5 2 - - 3 3 5 6 10 10 8 4 59 'rngu 2)4 13 )4 3 3 3 13 13 30 39 42 36 22); ~~T.X: tLnke 4 1 1 1 4 5 11 14 11 6 6 6 68 I o l-~ 815 125 40 21 37 70 181 260 262 230 171 151) 1,718 a/ !"xcluIing livestock produce and agricultural inputs. Source: Ministry of Agriculture unpublished material and mission estimates on sepsonal distribution. - 49 - VII. MANPOWER DEVELOPMENT 7.01 Established agricultural and veterinary staff posts (Table 16) shows that the proportion of vacancies is very high, particularly for the degree and diploma level categories (42% and 37% respectively). The number of non-citizens employed has decreased rapidly, and is now only 25% of the number employed in 1963. The agricultural extension service has 0.4 degree, 1.5 diploma, 8 certificate and 7 untrained staff members per 10,000 farm families which compares with the Ministry of Agriculture's 1980 target ratios of 1 degree, 2 diploma and 20 certificate level staff by which time the un- trained category will be abolished. In the veterinary services the present staffing ratio is 0.2 degree, 0.5 diploma, 2.3 certificate and 10 untrained staff per 50,000 head of cattle; the 1980 aim is set at 1 degree, 2 diploma and 10 certificate level staff per 50,000 head. In addition to extension and veterinary staff, involved field staff also include the cooperative inspection and rural devleopment (ujamaa village) establishment. There are few vacancies in the cooperative movement, but existing employees are gene- rally underqualified. About 25% of the senior positions on the agricultural parastatals are filled by expdtriates. 7.02 The estimated number of agricultural staff scheduled to graduate from various trainiiLg institutes in the period 1972-80 (Table 17) shows that by 1980 the annual ouitput of university graduates is expected to triple, the number of certificate holders double and the number of diplomates to in- crease by 60% though as students for the diploma course are recruited among certificate holders the net expansion would be somewhat less than appears from the table. Training for the cooperative movement is presently under- taken by the Cooperative College and Education Center at Moshi, which hitherto has offered a mixture of correspondence and residential vocational training. The college is however in the process of becoming a high level training in- stitute with a 2-year diploma course and 109 students were admitted to this course in 1973. Seven zonal colleges, each with a residential capacity of 300 students, are planned to be established over the next five years and these will offer lower level staff and membership training. As only limited da;:a is available, it is not possible to accurately assess the adequacy of either the existing or the proposed training programs. Some general comments on the situation with respect to high-level, extension and cooperative staff v e, however, appropriate. 7.03 High Level Manpower. There is a real need for additional manage- ment, planning ard research personnel and even if the planned expansion of training capacity rightly emphasizes high-ieval manpower, shortages ar-e likely to persist throughout the decade. Toward the end of this period, however, the shortage may represent less of a numerical and more of a q:iali-ative problem, in part stemming from the fact that staff are given nnl- very limited opportunities to gain Drofessional and managerial experience; thi.. can be attributed to little or inefficient guidarce, overly rapid pro- motion and/or frequent lateral transfers. While senior staff is overburdened with work, younger staff are frequently under-employed and there is an obvious - 50 - need for clear job descriptions, delegation of authority and increased staff development efiorts. In the overall circumstances, some increased dependence on technical assistance seems inevitable but this solution is by no means a panacea. The Tanzanian ideology emphasizes self-sufficiency and language , barriers and lack of local knowledge and continuity limit the usefulness of such technical assistance. Experienced technical assistance staff is in any case a scarce commodity, and it often proves difficult to evaluate proposed candidates. In several instances we observed that technical assistance personnel were either not being used or were incapable of performing,indicated tasks. 7.04 During the Third Plan period lack of manpower can be expected to remain a much more serious constraint than lack of capital. It is thus crit- ically important that existing vacancies be reviewed and new demands weighed against remaining vacancies on the basis of a realistic assessment of incre- mental resources which will become available. llnless these can be supplemented from abroad a relatively slow rate of agricultural growth will inevitably result. Tanzania should then be prepared to temporarily sacrifice some of its manpower self-sufficiency targets (as it has previously done with respect to development capital) and determine the type of positions for which expatriates would be acceptable. Research staff, commodity specialists, regional agricul- turalists, management consultants and land use planners for example, would be particularly suitable for recruitment under technicol assistance programs. The tea and tobacco projects show that some management and pldnning positons will also need to be filled by experienced non-citizens. 7.05 Extension Staff. Present extension staff often app.ar to lack practical farming experience, an ability to demonstrate the p:'oposed innova- tions convincingly and to independently apply their theoretical knowledge to the varying conditions and problems in the field. Top priority therefore needs to be given to the scope of practical instruction and the staffing of training institutions. In order to provide teachers and students with practical experience in agricultural development, each school should be given responsibility for planning and implementing the agricultural develop- men1t effort in a specified area (para. 8.10), and in these areas extension staff should be selected with particular care and some collaboration estab- lished with the zonal cooperative college so that new field practices can be integrated with marketing and input supply systems. A substantial part of the training capacity should be reRerved for upgrading existing extension staff and priority given to supervisors and instructors of Rural Training Centers for whom courses should extend over one growing season. Even if the present ratio between farmers and extension staff was to remain constant, at present levels of population growth, staff transfers and retirements would require about 350 new certificate and 150 diploma level staff anntually. If to this is added the needs of proposed new projects an additional 20 diploma and 220 certificate level staff would be required annually. 7.06 Cooperative Staff. There has been no evaluation of the adequacy of present cooperative training efforts and it is hoped that the establish- ment of the proposed efficiency research groups in conjunction with the - 51 - cooperative colleges (para. 6.11) will help remedy this deficiency. An expansion of the training effort would no doubt be advantageous, but in view of the relatively small number of staff to be trained (600 skilled union employees; 2,000 for primary societies) and the limited availability of teachers, a slower expansion would be more appropriate. As we have already commented a close coordination with the agricultural training institutions within the proposed training areas is essential. 7.07 Staff Incentives. Both extension and cooperative staff are often relatively indifferent to their tasks and this may be because increased efforts either appear meaningless to staff, or are beyond their capabilities. Expanded crop and livestock development programs and the proposed further training efforts should help to remove these constraints. Other problems may be the fact that promotion and disciplinary actions bear little relation to performance, and that in the interest of a more even income distribution, staff salaries are kept low with little chance of merit increases. There is an urgent need to reestablish staff incentives and existing procedures should be reviewed to assure a close correlation between performance and promotion and salary increments on the one hand, and to allow swift and decisive action to penalize indifferent and ir-egular behavior on the other. Al/ Table I.: AHRICUUTAUAL AND 'IETER1NARY S'1AEF (June 1972) Total Employment of Whom of Whom Full- of Whom Aducition Job Category Citizens Non-Citizens Total Central Time Teachers Field and Vacancies Establishment Vacancies (') Level Administration (Estimates Onlv) Research Degree Level Agricultural Officer (General) 73 26 99 27 ,..*. 81 180 45.0 4gctcultural Officer (Research) 33 21 54 4 * 27 81 33.3 Veterinary Officer (General) 41 24 65 12 ... ... 45 110 40.9 Veterinary Officer (Research) 12 6 18 1 ... 39 53.9 Total 159 77 236 44 22 170 174 410 42.4 Diploma Level Field Officer (Agricultural and General) 373 10 383 23 ... . .. 178 561 31.7 Field Officer (Agricultural Research) 104 2 106 - .. , ,, 129 235 54.9 Field Officer (Veterinary) 146 1 147 8 ... ... 58 205 28.3 Field Officer (Veterinary Research) 19 1 20 - . _ 25 45 55.6 642 14 656 31 38 587 390 1046 37.3 Certificate Level Assistant Field Officer (Agriculture) 2008 - 2008 ... ... ... 731 . 2739 26.7 Assistant Field Officer (Veterinary) 672 - 672 .,. . 375 1047 35.8 Total 2680 - 2680 ... 29 ... 1106 3786 29-2 Primary Education plus ExPerience/Ag . School Field Assistant (Agriculture,)- ... ... .. . ... ... .. . 1764 Field Assistant (Veterinary)- 2 . .... ... ... ... ... ... 808 Field Assistant (Other) ... ... ... ... 313 . Total 4885 a/ Includes all workers in posts falling under the 1472/73 establisnhment o: t'e inlztry- of Arricbltre. b/ No employment data available, but generally no iifficilty filling these posts. Sources: Tanzania Staff List 1972 Recurrent Estimates. MInisty of Agr±eulture, 1972/73. Agricultural Manpower Development in Tanzania: Messrs. Yeaman, Schwenke and Wamunza, Dar Es Salaam, 1972 Table 17: 7^rJrMATED OLPJPJT FROM AG1ICULTUTAf, TFAJ NING 11IrITUPIONS, 1972-1980 aj Education Institution 1972 1973 1974 1975 1976 1977 1978 1979 1980 Total e r Level i972- Degree Faculty of Agriculture, Morogoro 16 43 48 69 69 70 70 70 70 525 Foreign Veterinary bV 20 20 24 28 28 28 28 28 28 232 Foreign Agriculture - - 6 16 10 10 10 10 10 72 Total 36 63 78 113 107 108 1o8 108 108 829 Diploma Faculty of Agriculture, Morogoro 66 61 - - - - - - 127 Lyw-ngu 20 20 20 20 20 20 20 20 20 180 Mlingano 40 40 40 40 '10 40 40 40 40 360 Mpwapwa 22 36 36 36 36 36 36 36 36 310 1fkata 12 12 12 12 12 1I 12 12 12 108 Edgerton College j 35 33 30 30 30 30 30 30 30 278 Ukiriguru - - 40 40 40 40 40 40 4o 280 Mbeya - - - 80 8n 80 8'r 80 80 480 Kilombero - - 30 30 30 30 30 30 30 210 Mtwara - - 20 20 20 202 2n 20 20 140 Total 195 202 228 308 308 308 308 308 308 2,473 Certificate Uliriguru 126 156 100 125 125 125 125 125 125 1,132 Nyegezi 91 111 130 145 ihs 145 145 145 1145 1,202 Maruku 4o 48 35 - - - - - -13 Tengeru - 20 30 28 28 28 28 28 28 2 18 Tumbi 28 40 25 - - - - - - 93 Mpwapwa 105 112 100 11) 115 115 115 115 15 1,002 Kilombero - - - - - 110 110 110 1] ) 4 40 Mbeya - - - - 200 200 200.) 20' 20" 1,000 Mtwara - - 8n 80 80 80 80 8o 43n Total 390 487 420 488 693 803 803 803 803 5,659. a/ Tn many cases provisional planning figures have had to be used, or where these did not exist, estimr,ates have been made. Assumes foreign degree placements will continue at the level of the last two years. cJ Assumes 35 students per year will continue to be placed at Rdrerton for pre-servrice diplor,a training . Sources: Enrollment vroiections, Ministry or FPdication )0 Miniotrv nr Pnnnomip Affa-sir- nn,' IPevelonrilent lannzlnt. Annual Reports, Trainioig Section, Ministry of Agriculture, 1971 and 17 AgricuIturalh T.anpower Development in 'i'anzania, 197'. - 54 - VIII. INVESTNENT PROGRAI 8.01 The allocation of development resources necessarily involves the balancing of various competing interests. In the first part of this chapter we consider the distribution of resources between sectors and between regions before going on to review the type of projects envisaged, the specifics of the crop and livestock programs recommended and finally before summarising the total agricultural investment program proposed. The program as a whole reflects a strategy of rural development which is based on the assessment of potential and constraints outlined in the previous chapters. A. Functional Distribution 8.02 The functional distribution of development expenditure under the Second Five Year Plan (1969-74) is detailed in Table 18 and shows that the target share of agriculture investment was set at 13%. A precise figure of the level of actual investments made is difficult to determine in view of the uncertain allocation of parastatal expenditures but it appears that achieve- ment fell somewhat short of that projected. A more complete picture is avail- able for total public sector investment in agriculture, including economic in- frastructure such as processing, storage and marketing, for which the target slhare in the Second Plan was 23%. This figure compares with an actual annual expenditure share of about 13% during the first three years of tihe Plan, and a budgetted annual allocation of over 26% during the most recent two years, and a tentative achievement for the whole plan period of just under 20%. The proposed share for 1974/75 is 31%. In contrast to the shortfalls in agricul- tural investment in the earlier years of the plan, investments in water, power and education either exceeded or were close to targets. After the decentral- ization of Government in 1972, each region was allocated its own development budget and while they at present account for only 13% of the national devel- opment budget, they are likely to increase in the future. The regional budg- ets have, however, given heavy emphasis to social investments (b8% in 1972/73; 53%' in 1973/74). 8.03 It is critical that investments in the agriculture sector quickly reach currently intended levels. As we have shown real agricultural incomes and production have remained virtually stagnant over the past five years and this in turn has limited the resource base for the expansion of other sectors of the economy, while the need to import large quantities of food grains and the oil crisis has caused a serious deterioration of the balance of payments situation. In these circumstances, we can only conclude that agriculture should receive a greater share of available resources than under the Second Five Year Plan even though this may mean the temporary postponement or slow- ing down of other priority, but less productive projects, while within the field of rural development, a more sequential approach needs to develop in which productive investments are initially given higher priority. In table 19, we indicate four phases, of which the first is devoted to local testing - 55 - of simple innovations, the second to maximising benefits from already known and relatively unsophisticated yield increasing innovations in areas of es- tablished potential, the third to laying the foundations of a longer term development effort of integrated farming based on land use planning and rota- tional research and, the fourth, which would give increased emphasis on so- cial infrastructure. Since in many farming areas, significant agricultural progress can be made within the existing rural structure and levels of social services, the establishment of ujamaa villages involving considerable invest- ments in education, health and water facilities could for the time being take lower priority. B. Regional Distribution 8.04 As has been noted, there are significant regional variations in natural resources and incomes, as well as very great differences in the available educational, health, water and road facilities (Table 20). Enroll- ment in the first grade ranges from 31% of the 7 - 8 age group in Shinyanga to 81% in the Coast region; rural health centers have the capacity to serve 50% of the population in Singida, but only 12% in Iringa. 30% of the rural population has access to improved water supply in Tabora but only 7% in Mbeya, Mtwara and Lindi, and while there are 14 km of roads per 100 km2 of land in Kilimanjaro, Kigoma has only 2 km per 100 km2. Historically, the nine high income regions have received a disproportionate share of total central Govern- ment investments and of TRDB lending, although more recently in the allocation of regional funds an attempt is now being made to favor the low income areas. Wlile the differences in social services investments have been substantial be- tween individual regions, the differences between the high income region and the low income region group are relatively small. 8.05 The determination of agricultural opportunities for a more balanced regional development must depend on far better information being made aAraila- ble on conditions in the various agro-economic zones which only detailed land use planning can provide. Among the low income regions, however, Iringa, Ruvuma, Kigoma and West Lake appear to have considerable unused potential (Table 5), while prospects are less favorable in the case of Dodoma, Mtwara and Singida. Any major progress in the latter regions will necessarily involve major changes in the resource base, generally through irrigation which would consume a large amount of resources and is likely to yield a very low rate of return - a situa- tion which can hardly be afforded in the present circumstances. Instead it would be more feasible to open up new areas for settlement in high potential regions, more likely to give satisfactory returns. C. Type of Projects 3.06 The regional and district administrations are now responsible for mnost aspects of rural development and they thus have the complex task of reconciling economic and social objectives, identifying opportunities and - 56 - constraints, planning and implementing investment programs and of coordinat- ing public services. So far, the main emphasis has been on the improvement of social services since targets for education, health and water development are well established and the expansion of such services has considerable pop- ular appeal. Although regional development is under the guidance of the Prime Minister's Office the regions have in fact considerable and increasing auto- nomy and this situation has encouraged the regionally-based multi-sectoral project approach. Such integrated projects have many advantages and attrac- tions and will, we believe, continue to form part of Tanzania's development process. But because such projecLs give attention to areas of both high and low agricultural potential within a region and because of their tendency to emphasize social investment, they do not directly address the production problem which must now of necessity have prominence in the country's develop- ment strategy. We believe that rapid exploitation of the agricultural poten- tial will require a multi-regional approach aimed at rapid dissemination of high yielding innovations initially in high potential areas throughout the country and establishing growth centers in most of the districts. These centers would have the added advantage of illustrating the scope and methods of agricultural development and gradually increasing the capacity of the re- gional and district administrations to plan and implement such efforts. Al- though the development program should continue to be implemented through the decentralized administrative structure, the multi-regional approach would allow the Ministry of Agriculture to gain firmer control over sectoral plan- ning and counter tendencies toward self-sufficiency that might otherwise emerge. D. Crop Development 8.07 In the years immediately following Independence, Tanzania adopted a dual approach to agricultural development. On the one hand, a nationwide research and extension network was designed to bring about a gradual improve- ment in traditional farming methods but it was expected that the more rapid expansion of the agricultural sector would be achieved by resettlement pro- grams and the introduction of mechanized farming methods under close super- vision. In the event, this so called transformation approach 1/ proved to have been over-capital4zed, failed to achieve the necessary technical results and tended to foster a dependency attitude among participating villagers, with the result that it was finally abandoned in 1967. The chief instrument of agricultural and rural development is nmo the ujamaa village program and through denser settlement and participation in planning, Government hopes to create more favorable conditions for agricultural development. The research/extension effort has, however, achieved only limited results in spite of the substantial number of trained extension agents employed (one 1/ Recommended by an IBRD economic mission that visited Tanzania in 1959. - 57 - agent per 1,000 farm families). 1/ Efforts to produce export crops have been somewhat more successful than for food crops and were initially suppoirted by IDA through an agricultural credit project which provided funds for tea plant- ing, fertilizers for cotton, coffee sprays and a variety of processing equip- ment, Dut this in time resulted in substantial arrears for tne lending agency. 8.08 ilore recently the national effort has been supplemented by conmodity oriented projects notably for tea, tobacco, cotton, sugar and cashew, in certain definec areas. Being under the direction of parastatal agencies, the-se proj- ects have special managerial arrangements and generally provide for strength- ened extension work, input supply, credit, infrastructure and processing. Tneir acnievemients have been mixed, however, and tile ongoing tea and tobacco projects lhave made slow progress due to managerial difficulties and tile pre- vious collective farming policy. Tihese projects represented attempts to uti- lize favorable export prospects but thiey were not designed to tackle the low income problem on a nationwide scale. 8.09 Despite past failures, smallholder farming in Tanzaniia has consid- erable potential. Given sufficient incentives and support and with a deter- mined effort it has the capacity to provide tlhe country's basic food require- ments, to contribute generously to export earnings and to provide an improved income and standard of living for the overwhelming majority of its population. .luch of tniese underlying conditions have been discussed in earlier chnapters but in addition, it will be critical to increase the capacity of tie Ministry of Agriculture so that it can provide a program of agricultural support tnrough- out the country. The Iinlistry should thius be expanded so that it can assist the regions in the planning and implementation of an intensified national agricultural development effort, supplementing their resources and where necessary supervise and evaluate progress. Two national development projects in eachi of whichi the linistry's proposed support program would have a vital role to play are outlined oelow. The first of these would concentrate on maximizing quick yield inicreases from existing cultivated areas and the second while aiming at further yield increases would also focus on expanding culti- vated area. 8.19 National Development Projects (1) National Maize Project. 1/ In view of the critical food grain situa- tion an immediate effort should be made to reap rapid benefits froin available yield increasing teclhnology thirough marginal improve- ments of existing extension, marketing and input supply services. A project should therefore be prepared whiicii over a five-year 1/ The third education project (232-TA) was launcihed solely to assist Government in providing trained agricultural manpower. 2/ An extension of present efforts (see para 6.12). - 58 - period would provide the major accessible areas with a good maize potential with inputs, particularly seed and fertilizer at a reduced price, (para. 6.14), the storage of inputs and produce, credit for private small scale transporters, demon- stration and information material as well as transport facil- ities for the extension service and technical assistance positions in the Ministry of Agriculture (planning, evaluation, and supervision); the regional administration (agriculturalists for local testing and demonstrations) and the agricultural training institutes (teachers for retraining of extension staff). Although increased maize production can be assisted by favorable policy decisions (e.g. commodity price increase) the scale of the sustained effort required over th. next few years to restore Tanzania's self-sufficiency (para. 4.17) will require the simultaneous introduction of investment and policy and administrative actions within the framework of a project. Prominent among the' last will be the essential strengthening of the input supply and marketing services and because this alone will present a considerable task, the project's first phase should be designed specifically for maize in perhaps not more than 1-) regions, although other food crops and other regions may also be expected to benefit from it. This project slhould be given the highest preparation priority in the hope that it could be ready for implementation in 1976/77. Its total cost is estimated at Tsh 150 million of which incremental input costs would amount to about Tsh 100 million and of which 75% would be required during the Third Five Year Plan period. (2) National Agricultural Development Prolect (NADP). As a second stage of the national development effort, NADP should seek to re- direct and supplement the present research and extension efforts through a long-term development program designed to reach out over the whole country over a 20 year period. Essentially its purpose would be to uplift the present level of farming through the introductioi, of high-yielding varieties, rotational practices, Boil conservation mea.,tres, the integration of crop and animal production and the opening up of new settlement areas. As the district would be too large a unit to manage effectively, we visualize the progressive build up cf a number of sub-projects each comprising about 10,000 farm families with activities in each adapted to the various agro-economic zones. Each sub-project area, although part of a uniform agro-economic zone should be designed to coincide with the existing Government administrative structure so as to fit the established planning system (Chart 8525) and in thr selection of initial areas, consideration should be given to estab1ished production priorities (paras. 4.16 to 4.25), accessibility. regional income distribution and to the level if aooperative efficien-y that had been achieved. Project - 59 - investments would be expected to include inputs (seasonal as well as implements, oxen, dairy cattle, poultry, fencing, buildings etc.) at reduced price (para. 6.14) or through medium and long term credit; equipment for road construction and soil conservation; con- struction of storage, rural training centers (including ox training); strengthening of the extension service (staff; demonstration and information material; transport facilities) and agricultural re- search (staff and facilities) and technical assistance for land use planning and research. The implementation of each subproject would require close supervision and integration of crop and livestock extension, veterinary services, cooperative inspection, organiza- tion of self-help efforts and construction, and it is visualized that supervision and coordination would be entrusted to a manager who would be directly responsible to the District Developnment Director. In order to achieve a national coverage over 20 years an average of 10 sub-projects should be identified annually in collaboration between the regions and the IMinistry of Agriculture although the number could be somewhat smaller during the early years. We visualize that the first project would f'nance a 5- year time slice and would be ready for implementation in 1977/78. The total cost is estimated at Tsh 175 million of which Ts;h 75 million would he required during the Third Plan. 8.11 Regional Projects A multisectoral, integrated project for the Kigoma region, supported by IDA is now ready for implementation and another project for Tabora, also with a view to IDA financing, is being prepared. Improved agricultural pro- duction is an important aspect of the Kigoma project and is expected to be even more so in the Tabora project. Such projects can provide a useful proving ground for innovations and methods and would be of direct relevance in the planning and implementation of NADP. They should therefore aim to give improved knowledge of factors such as the number of staff required with different extension methods, various credit approaches, the levels and phasing of investments in roads and soil conservation, the ways to integrate crop and livestock production and methods of organizing self-help schenes. [t is thus appropriate that such projects should include competent planning and evaluation units. The Tabora project is expected to be ready for implementation by mid- 1976, and within the Third Plan period the two regional projects are expected to require Tsh 150 million. 8.12 Crop Projects In some cases, crop development now being promoted by specific projects may warrant further expansion during the Third Plan period. In some, if not all, cases this expansion could be included within the sub- projects of the NADP. The prospects for each crop, however, merit in- dividual consideration and the levels of expenditure envisaged during the period (including those of on-going projects) are additional to that fore- cast for NADP. - 60 - (1) Tobacco. The prospects for further expansion of flue-cured tobacco production are good and if the present project implementation difficulties can be overcome, the further development of this crop would be justified. The completion of the existing project and funds for expansion are likely to require Islh 85 million over the Third Plan period. (2) Tea. The existing project has fallen considerably behind schedule and will require Tslh 55 million to complete durinkg tne Third Plan. The prospects for further expansion are doubtful (para. 4.22). (3) Cotton. A development project for the Gcita district with major emphasis on cotton production has recently been started and will require Tsh 132 million during the Third Plan. Further specific investments for tnis crop are not expected during the period. (4) Cashew Nuts. A project for promotion of cashew nut production and processing ihas also recently been started. The whole develop- ment effort will require about Tsh 350 million. 8.13 Cooperative Training The establishment of zonal colleges (para. 7.06) inAliding efficiency researclh and advisory groups (para. 6.11) is expected to require Tsh 50 million during the Third Plan for construction and operation of the newT facilities, including some technical assistance. 8.14 Other Projects Ongoing projects particularly for research (USAID, CIDA, Nordic countries) seed multiplication (USAID) and agricultural education (IDA; Nordic countries) are likely to require about Tsh 200 million during the Tnird Plan period. E. Livestock Development 8.15 Beef. In view of the large existing herd and the availability of vast unutilized grazing resources, Tanzania has a substantial potential for expanded beef production. The main constraints, however, are tsetse infesta- tion on about 60% of the land area and overgrazing elsewhere. With indi- vidual ownership of cattle and communal ownership of land, tne herd size tends to exceed the carrying capacity of the land. Overgrazing has also increased due to the expansion of the cultivated area as a result of popu- lation growth. The basic strategy for the future should continue to empha- size the expansion of parastatal ranching 1/ through tsetse control and the 1/ The first and second livestock projects represent major efforts in this direction (see also Hlap IBRD 10855). - 61 - reduction of herd size and improved productivity in the traditional live- stock herd. The parastatal expansion program represents a practical means of influencing the problem of overgrazing and the size of the program should be determined by the scope for extracting female breeding stock from the trad- itional herd. The channels for such transfers need to be improved, and in times of drought higher prices for breeding stock need to be offered through the use of relief funds. In existing cattle areas, efforts to introduce con- trolled grazing should be intensified. 1/ 8.16 Livestock diseases such as East Coast Fever and Foot and Mouth also represent serious constraints on production. The calving rate is presently estimated at 50%, calf mortality at 20% and adult mortality at 10%. The main public effort is thus directed towards the establishment of preventive veterinary services. There are about 17,000 cattle per trained staff member and 1,000 dips (1 per 14,500 cattle) are now in operation although some are badly supervised. A continued improvement of the service should be attempted. 8.17 The 200 official cattle markets are presently operated by the Dis- trict Development Corporations (DDC), but these markets will be transferred to the Tanzania Livestock Marketing Company now in the process of formation. There are five secondary livestock markets operated by the Ministry of Agricul- ture where stricter vaccination requirements are imposed. Buyers of cattle are the DDC's (on behalf of local butchers), Tanganyika Packers Ltd. (TPL) and private traders. TPL is obliged to supply the Dar es Salaam market and it also produces canned meat for export. It is capable of processing 300,000 head per annum, although in 1972 only half this capacity was utilized (82,000 heads were supplied to Dar es Salaam and 81,000 heads were canned). Further expansion of stock routes and marketing facilities will be required. 8.18 Integrated Crop and Cattle Production. Rotational improvements, the availability of manure and power, the better utilization of waste mate- rial (e.g., maize bran) and improved human nutrition make the integration of crop and cattle production an important objective, and we visualise that this would represent a significant feature of the proposed National Agricul- tural Development Project. Tanzania has a number of areas that appear suit- able for dairy production (Arusha, Kilimanjaro, Mara, Mwanza, Tanga, as well as parts of Mbeya, Iringa and Morogoro). Local cows are, however, not very suitable for milk production (200-300 kg of milk per annum), in contrast to cross breeds which can produce 1,250 kg and exotic pure breeds, on average about 2,500 kg per annum. It is thus estimated that about 70,000 cross bred or 35,000 pure bred exotic dairy cows would be needed to substitute for present imports of dairy products. The management of large scale dairy herds has proved difficult in the past and imports of grade cattle is likely to be uneconomic. The emphasis should therefore be on small scale produc- tion utilizing upgraded indigenous animals but, as upgrading takes consid- erable time, cross bred cows must also be available for distribution. A 1/ The USAID-supported Masai project is an attempt in this direction. - 62 - number of efforts to upgrade the local stock are in progress: some semen is produced at Mpwapwa, but only about 2,000 cows are inseminated annually and a new SIDA supported station is to be established at Arusha. Several multiplication units which produce pure breeds are in operation, but total capacity is low and cost is high (about Tsh 1,400 per in calf heifer), while a few bull centers servicing cows from surrounding farmers are operated in Mara and Hbeya. The existing multiplication program therefore needs to be considerably expanded, and bulls with a higher capacity should be used for semen production. Ujamaa systems of milk production may be promoted, pro- vided good managers are appointed and trained. Research on pasture improve- ment, fodder and fodder conservation also needs to be intensified. 8.19 Training programs to promote ox cultivation can appropriately be given increased attention under the NADP, and the Rural Training Centers should be equipped for this purpose. The multipurpose use of oxen (plowing, weeding, threshing, transport) needs particular emphasis and implements made available on credit. Stall fattening of immatures can be promoted outside the milk areas and animals made available to stockless farmers through the new Livestock Marketing Company. Such animals should be weighed before and after the fattening and farmers paid for the difference after deduction of an insurance fee. Crop residues and locally grown maize and other fodder can be utilized in these fattening operations. 8.20 Poultry. Local hens lay about 30-40 eggs per annum while a hybrid hen can produce about 150. Hatcheries, mainly for hybrid chicks, established at Kibaha and Ukanga will have a total capacity of 2.4 million in 1974 but production in 1972 was only 400,000 due to disease and managerial problems and almost one million chicks were imported. Thle National Milling Corporation operates a feed mill with annutal capacity of 70,000 tons but the quality is low and variable and no statement of nutritional content is provided. Both egg and broiler production deserves promotion on an ujamaa village basis under NADP using pure bred chicken and locally produced feed and the National Milling Corporation should thus concentrate on a protein, mineral and vitamin mixture with strict adherence to standards. The establishment of another hatchery and feed mixing plant appears to be premature at this stage and existing facilities should be fully utilized first. The total urban con- sumption of poultry products is estimated at 765,000 birds and 4 million dozen eggs annually, all of which is marketed privately. The lack of cold storage facilities has created problems but is expected to be remedied shortly with Dutch assistance through the establishment of the National Cold Chain operation. 8.21 We therefore anticipate the folloxwing investments in the livestock sub-sector during the Third Plan period: (1) Beef Production. The implementation of the on-going IDA assisted Second Livestock Project is estimated to require Tsh 125 million during the period. A follow up project for the further expansion of parastatal and ujamaa ranching and for further improvements in - 63 - veterinary services and marketing can be expected to begin in 1978/79 and this would require an additional Tsh 60 million during the Plan period. (2) Dairy Project. Dairy development would also be included within the National Agricultural Development Project. Mteanwhile, however, the Government has prepared for IDA support a specialized dairy project with special emphasis on parastatal large scale produc- tion. In this project the guiding principle should be to lay a sound foundation for Tanzania's dairy development rather than attempt to achieve rapid import substitution. The project: may require investments in the order of Tsh 100 million during the Third Plan. (3) Other Projects. Other projects including the Ilasai scheme (USAID), Tse-Tse control (USAID), artificial insemination (SIDA) are esti- mated to require Tsh 200 million during the Plan period. F. Summary 8.22 The total investment in small farmer crop and livestock production reviewed above totals about Tsh 1,300 million in real terms (Table 21). To this must be added however probable investments in activities or sub-sectors which have been outside the scope of this study but which prima facie would appear economically justified. These are also detailed in Table 21 and significant among the items are sugar development (Tsh 500 million), which will include part of the expansion of the Kilombero Sugar Company with World Bank Group support, and an afforestation program. These additional items totalling Tsh 1,000 million would bring the total investment program in the agriculture sector to some Tsh 2,300 million in real terms. 8.23 The above level of investment, respresenting some Tsh 460 million in real terms annually, compares with an average annual public sector invest- ments in agriculture of Tsh 250 million under the Second Plan. It is, however, not strictly comparable with the 1974/75 public sector investment estimate shown in Table 22 as the latter is inflated to account for general price increases, contains exceptional items that are either heavily oriented towards large agro-industrial processing (sugar) or are expected to taper off rapidly over the next few years and, in its entirety, is not expected to be achieved as indicated by past performance in realizing budget estimates. While the cost of the proposed program is basically in line with Government's current intended levels of investment we would emphasise that continued priority must be given to agriculture for the rest of the decade, parti- cularly as pressures for competing uses of funds will be mounting and as disbursements under approved projects will be coming to an end. Further- more, to achieve the effects attributed to planned investment, the effici- ency with which the various programs are implemented will have to be im- proved markedly over currently prevailing standards. - 64 - o.24 The additional technical assistance which would be required to iinplement the recommendations of this report are in the order of 100 addi- tional positions (Table 23). These positions would obviously not all requ-Ire recruitment at the outset, but would be g,radually filled during the 'Tirdi P]aln. There is, hioever, an immediate need to assist Government in making t'ne r'C1icy and institutional recommendations in Chapters V-VII operational and to prepare concrete investment proposals on the basis of the program outlined above. Table 18: FUNCTIONAL DISTRIBUTION OF DZVELOPMENT EXPENDITURES Second Plan Second Plan Estimated Ministerial Estimated Regional Targets Total Estimated Development Expenditures Development Ependitures 1969-74 Ecpenditures to 6/0 1972 1972/73 1973/74 1972/73 1973/74 Tsh mil. % Tsh mil. % Tsh mi1 Tsh nil 1 Tsh mil % Tsh mil % Agriculture 345 ~/ 13 92 -/ 7 132 13 138 10 7 7 41 23 Education 299 11 137 10 74 7 54 4 15 14 22 12 Health 99 4 33 2 15 1 35 3 8 8 24 14 Water and power 343 13 184 13 231 22 349 26 48 46 47 27 Comnunications 924 34 610 43 360 34 374 28 n.a. n.a. 25 ,/ 14 Other 701 25 348 25 241 23 393 29 26 25 17 10 Total: 2,711 100 1,404 100 1,053 100 1,343 100 104 100 176 100 a/ xccl. parastatal investment. b/ Regionpl development expenditures not analysed. c/ Roads. Source: Devplan, Mid plan review Estimates of public expenditures 1972/73 and 1973/74 Table 19: MODEL DCVEOPMENT SEIQUENCE Tyj'x o - Ta z,et ?reparation for Phase . qriovwtioo Fopsl o tion Means next phese 1O Observation anic, preparatio:i Testin: c' innovations Agro economic surveys Investment planning (stoC:: stor e- e;.- r . o-- z- -.ii (.'eerSting rosois heve been e. ploite;; 2. Improved yields Yield improverment Existing Ex-,tension Researcn (crops, (prior;i y crops' fn.rmers -nput supply rotations) Input price reduction Land use planning Tarketing Organizaticn of sel' help efCorts0 3. Improved farming systerr. Yield improvement Fxistinp, Extension Improved local self- 2 arrling: syntes 2srmers Input supply airinistration: New crops Settlement of Input price reduction Tax assessnent end P;ot3ticns new areas Credit (long & medium term) collection ,oil Conservation Marketing : nte,,r. cl crop Roaa construction & anir L prc . Soil conservati'os Infrastr for settle7nent u Comprehensive Yieli i:norovement Existin, Extension rural development Par7ier- 3 t-,s farrters Tnput supply Non-farm pro :Vttion 5utller_ Credit Rural liviiL.g oonnitim :on-"rol Marketinag popiT-tion Road Construction Soil Conservetion A.ctlereted dlev. of small sr ele in.-'ustr z ^.cr.eaIpr,ted cev. of socisl serv. (weter, educ, health) 1/ The -'iatriot T 'hirinistr ..... tiorn .. obviousl> .,ave t-es a Lc,:ich nre 'brose r t:h-n thr,se indicate-. The ur-oter th.i.l thod.ol, ho.e -er, undereine-i the necesit-, to shift. the eriphes_is to dire.- nrc.h:ct>e actipaitie- ci.',-i alphases t:`e proc_,, . Tal Ie 2Ct BOTIOIiAL C1-.?.AC'.-.'uIll ;^r;u. ro Po l pulation Per Access to Capacity of Enrollment Kilometers ^f r-ad PstiLated per Fer -F'E '97_ density a rural water rural healths in Ptandar4 I '1' _ apta rnvest- 'apita 'endi r ',ri :ercons ,DF copply as center, as as of per . per r.ent regional as :f per km' 19W of regional of regional age grou_ 1;10 T.cK 1001' d.'geted 2nd develop-.. TJne '7: land area Tshi r-.ulation population 7 _ r of land -hYat`tants ;4;inistry Plan bu-dget. of :,0,71) (1971) (1971) & Parast. (Tsh) lYT3!'7L total 69/'7o--7jZLo`Tsh) (Tsh) Arusha 3'4 9 762 34 39 4 4 3144 6t7 15 i'anga 90034 73" A _3 r54 11 3 342 835 14 7ahora c 35 5 702 30 39 40 3 a 112 132 9 3 .i,an air- 7,l -7 - 39 14 1 a 187a/ 12 ,D9SS secl e r^~7 1 < -7 tL ? 3 ,'' 894- 17 _ oas-, 17 ~ ~ ~~~~~~~~~~~~~~~~~~~~~~~7 30-1 --Y 5; 0.W-pS 1, ^W/* 91 1 1_ 4- 31 3 37 13L 11 an' 1,2 13 -; c 173 7 *_ - :rogcr 'II ' 1 nr 4 3 51 , 3 361 1440 ll '*he a 1, R 1 Ii 5 2 Li - 3 23a 305 10 O-rtc'al 1 .19 13 6'1 1 36 ,.3 i2?- 394/ 1l :Low' PJDOP Pe_ions Mara ; 31 *0 3- C 2 r6 120 73 .igoer.a 516 14 476 12 39 5? 2 101 123 16 Irin;r 827 15 475 9 1C 3 5 3 291 323 13 17 West Lake 739" 26 1L61 12 20 60 7 3 81 147 19 Singida 496 10 439 16 50 69 4 4 47 94 16 Dodoma 810 20 415 22 49 42 7 4 78 95 10 0 t`ndi w.twara 1,35r 16 40D5 7 442 3P 5 4 44 118 193 1 Puv;aa 1461 8 372 11 22 57 4 5 45 105 21 7 .^ Obto' a;- 5,866hr'. 15; 440 12 33 48 S 3 98 145 15 35 TOTAL: 13,685 15 549 14 35 49 5 3 172 1 283 13 lo. a/ lncl,cdi.r Dar-es-Salaam. t/ -,'otal amo :nt lr.t' Tsh 1')9 million. Source: .nr_lation and GDP: Devlan :o.i-r.s papero; .ater' 1Ministyy o' Water and Power working papers; 'Health: '';nistry of Health; r-;.a on': 'Mini ir: -'S.catior; knad: Con. ''orks; Second l-1an lol. I; hiudget estimates 1973/74; -' 2i Annual Report. - 68 - Table 21. PROPOSED DEVELOPM3NT PROGRAM, 1975 - 80 Tsh. Million Crop development Agricultural support program National maize project 113 National agricultural development project 75 Regional projects 150 Cooperative training 50 Tobacco project 85 Tea project 55 Cotton project 132 Cashew project 350 Other projects 200 Subtotal 1,210 Livestock development Beef production 185 Dairy project 100 Other projects 200 Subtotal Total crop and livestock development current prices 1,695 Total crop and livestock development real terms a/ 1,300 Other development Sugar production 500 Fruit and vegetable production and marketing 50 Other parastatal production (incl. wheat, maize, soyabeans) 100 9nall scale irrigation 50 Forestry 100 Fisheries 50 Private and cooperative investment 150 .7ubtotpl (rer.l terms) 1,000 Grand Total(Real Terms) 2,300 a/ Assuming 100 inflation. Table 22: PUPFTT SW.'TOR AN9 C?QY R-hTTV; TNVtSTMWWTS TN AGRIFCULIJzj'-. 1969/70-197V/M7 (TSh. '000) 1969/70 1970/71 1971/72 1972/73 1973/74 1974/75 (8cuual) (3-stimate) Ministry of Agriculture 1/ 33,910 38,44o 23,676 59,387 66,863 91,413 Parastatals National Agricultural Products Board 13,385 10,531 9,548 27,337 17,761 Tobecco Authority 2,781 2,657 2,922 5,o98 64,453 7,500 Pyrethrum Authority 2- - - - Coffee Authority 78 - - - - Sisal Corporation 4,412 2,8l;8 1,;85 2,432 27,706 113,017 Tea Authority 1,880 5,2,9 7,460 24,403 17,630 1l,825 National Milling Corporation 183 5,173 6,4h60 25,485 20,418 53,455 NAFCO and Subsidiaries 13,019 26,014 69,440 6f,427 101,175 5,100 LSMB (Cotton Authority) 955 735 'i8 2,385 25,'j00 81,461 GAPEB - - - - - 8,220 Livestock Development Corporation - - - - - 51,024 Cashew Authority - - - - - 6,000 Sugar Development Corporation - - - - - 27,834 Total / 38,949 53,237 97,983 153,567 274,6L3 i1 3,43: Tanzania Rural Development Bank 3/ 10,400 2 5,2 8', 19,655 38,000 87,582 135,300 Regional Budget - - - 71,000 27,500 54,700 Regional Development Rund 4/ 20,000 23,750 29,252 30,000 45,000 44,000 Rural Developnent 4/ 1,122 1,402 1,455 1,000 1,000 32,400 Cooperatives TRDR/TIB Loans 12,568 16,0; 18,9044 5461 19,369 n.a. Own Funds < r014 8 5l9 10 -143 4,8140 13 018 Total T29,28 10,291 32 387 n.a. Total 6/ 109,965 150,634 162,2,.14 2C93,C9h 515,606 991,249 / -Xcludes loans and investments, which are included under parastatals. 2/ May include some amounts also shown under TRD)P, 3/ Represents Treasury appropriationS for TRDiP and not rRDw volume o. ]nniin . '/ funds adninistered through Prime YiriEte'ls Office. §/ Mission 3istimate. o/ Includes coop rattves' own funds orly; exclude3 D.D.C. ir:-es,n-en.:s. Source: D3VPLidSl; 1974/7, De-ielopment Fl1n; 197,/7, .1udget Fstii.otes. - 70 - Table 23: ADDITIONAL TECHNICAL ASSISTANCE REQUIREMENTS (Positions) Ministry of Agriculture Sectoral planning Project preparation and evaluation 4 Land use planning 5 Price analysis 1 Parastatal efficiency research and management consultants 2 Procurement and distribution of demonstration material, etc. 1 Research (including Research Center) 20 Agricultural training institutions (teaching staff) 10 Regional administration Agriculturalists 10 Veterinarians 10 Cooperative inspection a/ 10 Cooperative Movement Efficiency research and manegement 10 consultants Teaching staff 10 Parastatals Commodity specialists 5 TRDR (input procurement and distribution 1 Total: 100 -Y Or management of regionally operated marketing and Input distribution. Source: Mission Estimates. -7 - IX. PRODUCTION AND INCOME ESTIMATES v.01 Some consideration must finally De given to tihe production ann income effects of the proposed development strategy and investment program. Our knowledge about major variables such as yield improvement opportunities in tne different ecological zones, the amount of unused cultivable land, likely adoption rates withl different extension and input distribution met.lcds, price elasticities of supply and effects of institutional changes is, however, incomplete, subjective and unquantified. We must therefore emphasize tnat the estimated results indicated in Tables 24 and 25 should only be regarded as approximate indications of liKely effects. Among export crops, tobacco production could be expanded by some 12% annually in the Plan period, while, coffee production, due to coffee berry disease, will continue to grow at a modest 2.0% per annum. The growth of other export commodities could be in the range of 5-8%. Self-sufficiency in starchy foods, pulses, paddy, sorghium, millet and poultry production should be maintained without difficulty. Provided maize production receives the high priority attention which we nave recommended, it should be possible to obtain self-sufficiency by 1980 but im- ports of wheat and dairy products are likely to increase. The achievement of these production estimates which are based on both yield increase possibilities and area expansion will, however, depend on the rapid implementation of those policy and institutional changes which we hiave recommended and on a deter- mined effort to prepare and launch the investment program. 9.02 The implications of these production increases for smallholder in- comes are estimated in Table 26. If tile proposed development strategy were to be fully implemented, thie value of smallholder production (in constant prices) would increase from Tsh 2,400 million (Tsh 187 per capita) 1/ in 1972 to Islh 3,711 million (Tsh 237 per capita) in 1980; this would represent a 5.5;O rate of growth. The srnallholder consumption of casn inputs would increase fromn isi, 50 million to Tsh 200 million, resulting in a growth of the net value of smallholder production of 5% annually representing a substantial acceleration over the growth experienced in the 1969-72 period (about 2.5%). In current terms, commodity prices are forecast to be considerably above 1972 levels, but as this increase mainly reflects world inflation, the impact on real farm income is expected to be negligible. To the extent that input price reductions are financed by tax revenues rather than by reduced commodity prices, some additional improvement of smallholder incomes would be realized. *\ further acceleration of agricultural production can be expected in the period after 1980 as a result of thie land use planning efforts and the introduction of tne maize project and the National Agricultural Development Program (para. 8.10). Tthus, if the net value of smallholder production in constant prices %w7as to expand by 6% in the period 1972-1992, per capita incomes would double. As Governmenit can be expected to give continued emphasis to rural development and smalliolder farming, the relative income of small farmers compared with 1/ Agricultural CGP per person dependent on agriculture is estimated at Tsh 313 in 1972. The lower figure indicated here refers only to smallnolder production and is based on an incomplete list of commodities. - 72 - tlie urbani population and large scale farmers may be expected gradualiy Lo improve. lue agricultural strategy recommended in this report may be expected to have tae following effects on income distribution in the rural areas. First, initiallv the main beneficiaries are likely to be the more progressive uut still small-farmers in areas of higher potential. Only by mobilizing thtesC reserves can the urgently needed production increases be achieved. ihowever, institutional improvements, particularly marketing, will bring some benefits to the whole farming community and the strengthening of research, extension services and input supply would encourage tnie widespread adoption of neW tecihniques. Second, the long term National Agricultural Development Project would progressively reach out to farmers in the full range of Tanzani'a agro- economic conditions and through its design would achieve a country-wide dis- tribution of benefits, offer resettlement opportunities and the maximum dcinon- stration impact. Overall, the abandonment of the collective farming policy and tne recommended emphasis on incentives and productive investments can ae expected to lead to a substantially higiher rate of production and income 2rowtbn than a continuation of past policies and the resulting strengthened economic base would permit Tanzania to further assist the least privileged members of its rural areas. Over the longer term, therefore, there is no reason why income distribution should be adversely affected. 9.03 Agricultural imports and exports are projected in Table 27. Tae net foreign exchange contribution of the agricultural sector is expected to increase from Tsh 960 million in 1972 to Tsh 2,777 million in 1980 at current prices or Tsh 1,446 million in constant prices. Table 24: PRODUCTION ESTIMATES, EXPORT Ca10DITIES, 1975 AND 1980 Annual 1972 Estimated 1980 Growth of Marketed Average Value of Annual Marketed Estimated Value of Production Production Export Marketed Growth of Production Export Marketed 1965-68 ('000 MT) Price Production Production ('000 MT ) Price Production to 1969-72 (Tsh/MT) (Tsh. mil.) 1972 lo 1980 (Tsh/MT) f/ (Tsh. miL.) Coffee 2.1 52 7,000 364 2 61 14,420 880 Cotton (lint) 2.1 80 5,216 417 5 118 11,370 1,342 Sisal -3.2 157 946 149 5 232 1,540 357 Cashew (raw) b/ 7.6 138 1,331 184 5 204 2,740 559 Tea 10.0 13 5,852 76 8 24 8,075 194 1 Tobacco (flue) 20.5 11 8,792 97 12 27 16,180 437 Pyrethrum (extract) -6.5 0.162 133,853 22 6 0,262 275,700 72 Beef c/ - 3.3 12,832 42 5 5 30,800 154 Total: - - - 1,351 - - - 3,995 a/ The 1972 Tanzania price has been adjusted by the reltion 1975/1972 and 1980/1972 in IBRD price projections (current ten b/ An increasing amount will be processed and receive a higher price. c/ Ecports. Source: IBRD price projections Jan. 29, 1979 (unpublished). Mission estimates. Table 25: SELF-SUFFICIENCY REQUIREMENTS, 1980 Total Require- Estimated Annual Production ments Deficit Annual Estimated Annual Growth in Expected 1972 1972 1972 Growth in Requiremerts Growth in Production Annual Require- 1980 Harvested Required Growth in ('300 MT ) ('000 MT ) ('000 MT) ments 1972 ('000 MT ) Production for Self- Production to 1980 1965-68 to sufficiency (W) (%) 1969-72 by 1980 a/ Cereals Wheat 98 140 42 4.5 199 17.3 9.3 5.0 Paddy 171 172 1 3.7 231 11.6 3.8 3.8 Maize 881 1,019 138 3.5 1,338 3.1 5.4 5.4 Sorghum/Millet 319 346 27 2.7 429 2.7/0.5 3.8 3.8 Starchy Foods Potatoes 113 11 0 3.2 146 30.0 3.2 3.2 S'weet potatoes 234 234 0 3.3 305 0.1 3.3 3.3 Cassava (fresh) 2,039 2,000 -39 2.6 2,469 11.8 2.6 2.6 Plantains/Bananas 1,206 1,206 0 2.9 1,517 3.3 2.9 2.9 Sugar Cane 1,064 1,549 485 4.8 2,244 5.5 9.8 9.8 1 Pulses 177 163 -14 3.7 218 4.1 3.7 3.7 Groundnuts 29 31 2 4.5 44 -8.1 5.3 7.0 Beef (000 head ) 1,105 1,038 -67 4.8 1,519 n.a. 4.8 5.0 Poultry Eggs 25 25 0 4.3 35 n.a. 4.3 4.3 Meat (000 head ) 10,000 10,960 960 5.0 16,250 n.a. 6.3 6.3 Milk 725 812 87 3.9 1,108 n.a. 5.5 2.5 a/ Maintaining exports at present level. Source: Mission estimates. Table 26: SMALIHOLDER GROSS AGRICULTURAL INCOME 1972 AND 1980 1972 1980 Production Percent Smallholder Producer Gross Production Percent Smallholder Gross Commodity '000 MT) smallholder production price Income ( '000 MT) Smallholder production Income production ('000 MT) (Tsh/MT) ( Tsh/ mil) production ('000 MT) 1972 prices Coffee 52 72 37 5,345 198 61 80 49 261 Seed cotton 240 98 235 1,067 251 354 98 347 370 Sisal 157 2 3 896 3 232 2 5 Cashew 138 98 135 870 117 204 98 200 174 Tea 13 10 1 5,827 6 24 50 12 70 Tobacco (flue-cured) 11 60 7 5,800 41 27 80 22 128 Tobacco (fire-cured) 4 100 4 2,100 8 6 100 6 13 Pyrethrum 4 100 4 3,720 15 6 100 6 22 Wheat 98 25 25 635 16 145 35 51 32 Maize 881 75 661 264 175 1,338 85 1,137 300 Millet 128 100 128 517 66 173 100 173 89 Sorghum 191 100 191 388 74 257 100 257 100 Paddy 171 95 162 565 92 231 95 219 124 Beans 177 95 168 661 111 218 95 207 136 Cassava 793 100 793 220 175 2,469 100 2,469 543 Irish potatoes 113 100 113 337 38 146 100 146 49 Groundnuts 29 98 28 1,116 31 50 98 49 55 Sesame 8 98 8 1,130 9 14 98 14 16 Sugarcane 1,064 1 11 42 0 2,244 4 90 4 Beef / 1,105 93 1,028 336 345 1,633 75 1,225 412 Milk 725 85 616 750 462 883 85 751 563 Poultry eggs 25 85 21 6,ooo 126 35 85 30 180 meat 9 85 8 5,000 40 15 85 13 65 Total -- - - 2,399 - - - 3,711 Population (000) 12,855 15,663 Per capita 187 P37 Growth in 1972-80 (total) 5.5% 1992-80 (per capita) 3.0% a Selected commodities. J '000 head Source: Mission estimates. a/ Table 27: APRICULTURAL IMPORTS AO4D EXPORTS, 1972 AND 1980 1972 1980 Production Domestic Surplus (4) Prices Value / Production Domestic Surplus (t) Prices d/ Value Commodity (000 MT) requirements or (TSh/MT) (TSh.mil.) (00 MT) requirements or (TSh/MT) (TSh. mil.) ('000 MT) deficit (-) ('000 MT) deficit (-) ('000 MT )b/ ('000 MT) Coffee 52 1.3 + 50.7 7,000 355 61 2-3 58.7 14,420 + 8b6 Cotton lint 80 8.5 + 71.5 5,216 373 118 27.7 c/ 90.3 11,370 + 1,027 Sisal 157 4.0 + 153.0 946 + 1L5 232 7-0 225 1,540 + 3h6 Cashew 138 21.0 + 117.0 1,331 + 155 204 30.0 + 174 2,740 + L77 Tea 13 2.2 + 10.8 5,852 + 63 24 3.6 - 20.4 8,075 + 165 Tobacco 11 3.5 + 7.5 8,792 + 66 27 5.4 + 21.6 16,180 + 3h° Pulses 177 163 i 14 1,278 '18 237 218.0 19 2,050 + 39 Pyrethrum 0.162 - + 0.162 133,853 + 22 0.262 - + 0.262 275,700 + 72 Beef 117 113.7 - 3.3 12,832 42 166 161.0 4 5.0 30,800 + 15 Groundnuts 29 31 -2 2,123 - 4 50 44.o - 6 3,460 + 21 Subtotal: - - - 1,235 - - - - + 3,506 Wheat 98 140 - 42 497 - 21 145 199 - 54 1,332 -72 Maize 881 1,019 -138 481 - 66 1,338 1,338 - _ _ Sorghum/Millet 319 346 - 27 481 - 13 429 429 _ _ Sugar cane 106 155 - 49 1,502 - 74 2,244 2,244 - Milk 725 812 - 87 839 - 73 883 1,108 -225 1,678 - 378 Subtotal: _- - -247 - - - - - L50 Pesticides - 24 - 150 Fertilizers 12 55 - 43 488 - 21 200 300 .Jo0 1,220 - 122 Tractors - 14 - 30 Machinery & equipment - 11 - 25 Animal feeds i 42 + Co Subtotal - _ - - -28 - - - - -279 Total _ _ _ _ 960 - _ _ _ +2,777 a/ Major export and import commodities. b/ May not correspond with actual exports and imports due to adjustments in stocks. c/ Increased domestic processing. d/ The 1972 Tanzanian export and import prices are adjusted by the 1972/1980 relation in IBRD price projections (current terms). Source: Mission estimates. - 77 - X. POSTSCRIPT 10.01 This report has sought to define a long-term strategy for Tanzania's agriculture with particular reference to the Third Fivc-Year Plan Period 1975- 80. While its recommendations have been fran,ed in the context of the serious food grain situation and balance of payments crisis which has occured during 1974, it is appropriate to conclude with some remarks on such urgent steps that Tanzania nmight take in the immediate future to help alleviate the situation in 1975 and early 1976 in advance of the implementatioli of the projects proposed. 10.02 First, Government should urgently reconsider the measures it might now take to improve farmers incentives. During the last year Gov- ernment has twice announced considerable increases for food grains as well as a number of other commodities with tthe result that for example the price of maize is now close to import parity. The villagizatiorn program hus, however been allowed to accelerate to such an extent that, in the absence of any real planning, it now threatens to cause a vetry serious disritntioi in production. In these circumstances we can only reco;miend that L. Ltnporary halt be brought to the resettlement process so that a major effort can be direcLed at minimizing the negative impact on planted acreage and yields. Reestablishing incentives can be expected to have a much greater impact on production than hastily prepared and inadequately supported "crash" programs for the rapid expansion of food production, for example, through state farms. Second, an early and vigorous start should be made in implementing the wide range of reforms and policy changes recommended in this report for streng- thening the support services particularly in marketing, input supply, ex- tension and the build up of the Ministry of Agriculture. It is accepted that they will take time to implement but unless an early start is made, the necessary framework will not exist to permit the effective implementation of projects later in the Plan period. Third, the Government should immediately give high priority to improving the implementation of established projects, many of which (such as tea and tobacco) have shown disappointing performance in recent years while others recently approved will also require serious attention if they are to achieve their planned expectations. 10.03 Such measures if implemented promptly would have a favorable effect, not only in alleviating Tanzania's immediate economic problems, but in providing a sound basis for development in the decade ahead.