Research report on economic returns for investing in smallholder farmers (2)

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Research on economic returns for investing in smallholder farmers case study of Iringa,Chamwino district councils explaining how central,local government and other stakeholders including private sector are investing in smallholder farmers. Furthermore, the report explain how much has been invested both physical and technical,what is working and what does not work and reasons behind. Read more in the report.

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  • 1. ECONOMIC RETURNS FOR INVESTING IN SMALL SCALE FARMERS CASES OF IRINGA, KILOSA AND CHAMWINO COUNCILS FINAL RESEARCH REPORT1 JUNE 2014 1 Undertaken by Dr. Honest Prosper Ngowi and Mrs. Bahati Matimba of ANO Consulting Ltd 1

2. TABLE OF CONTENTS Item Page number 1 Introduction 3 2 Scope of the assignment 3 3 Methodology 4 4 Study Findings 4 5 General Findings 4 6 Case Studies Findings 7 7 The Case Study of Iringa Municipal Council 7 8 The Case of Chamwino District Council 19 9 The Case of Kilosa District Council 27 10 Conclusions 34 11 Recommendations 34 1. INTRODUCTION This is a research report on the returns of investments in small holder farmers in Tanzania. The report is based on three case studies. These are case studies from Iringa, Kilosa and Chamwino District Councils. The study was conducted between May and June 2014. The study was guided b y terms of reference (ToR) provided by the client (Action Aid Tanzania AAT). The report 2 3. presents the three case studies separately in order to provide district-specific insights. Based on the three case studies, the report gives recommendations accordingly. 2. SCOPE OF THE ASSIGNMENT The following were the questions that were expected to be answered in the study: 1. Assess how the government both central and local governments are investing in smallholder farmers, to what extent the governments have invested to smallholder farmers, what is working and why and what is not working and why? What are the gaps, what has been the priority focus of investment to smallholder farmers for the identified case studies? 2. To what extent other stakeholders including private sectors are investing in smallholder farmers, how much has been invested both financial and technical support, what is working and what does not work and the reasons behind? 3. How smallholder farmers are receiving the support from the government and other private sectors, what kinds of support provided? 4. Assess how farmers receive extension services, inputs and any other support necessary in their development agendas? 5. Assess the outcome of the investment from smallholder farmers, is there any increase in production?, to what extent?, how these outcomes have contributed to improvement in smallholder livelihoods? 6. How much the government eg local government have received from smallholder farmers as returns from the investment --- collected government revenue from farmers and others 3. METHODOLOGY The study that informs this report is based on both secondary and primary data. Secondary data were collected through documentary review while primary data were collected through field interviews. District Executive Officers (DEDs) of the three districts were presented with introduction letters. They then directed the researchers to the office of the District Agricultural and Livestock Development Officers (DALDO) that provided most of the responses in the three 3 4. districts. In Iringa, a number of other respondents than the districts officials were interviewed too. 4. STUDY FINDINGS In this section, the findings from the study that informs this report are presented. Findings from the literature are presented to give a general overview on some of the key issues in the study. The findings from the literature are followed by findings from each of the three case studies. 4.1. GENERAL FINDINGS A number of studies have been conducted on small scale farmers in general and those in Tanzania in particular. Among the study of great relevancy in the context of this study is that of Vorley, Cortula and Chan (2012)2 . Among the key issues of relevancy in the context of this report include the findings that more investment is required in agriculture in general and for small scale farmers in particular in order to solve such challenges as rural poverty, food insecurity, stewardship of natural resources, and climate resilience. Althogh governments have increased commitments to public investment in agriculture, these have failed to materialize. Instead, attention has been paid to creating a facilitating environment for private investment in agriculture. It is also found in the Vorley et al (ibid) that attracting investment should be a means to an end. Among other things, quality of the investment is critical. Another important finding is that in Tanzania, women are reported to produce about 70% of all food crops. From interviews with stakeholders and documentary review in this and other studies that the authors have been involved in3 , the following were the general findings on the key researh questions: 2 Tipping The Balance: Policies to shape agricultural investments and markets in favour of small- scale farmers 3 Such as a study on Economic Profile of Kigoma Region in 2013 for the Ministry of Natural Resources and Tourism; A Study on Value Added Tax (VAT) on Fertilizer for the Ministry of Agriculture and Cooperatives in 2013 and in data collection for the Vorley, Cortula and Chan (2012) publication 4 5. 4.1.1. The way the government is investing in smallholder farmers Generally both the central and local governments are investing in smallholder framers in various ways. These include through investing in agricultural infrastructure including but not limited to rural roads, markets, irrigation, inputs supplies as well as provision of extension services. Generally, investment in smallholder farmers is inadequate. For example, inputs such as seeds and fertilizer are inadequate in quantity and quality as well as in delivery time. Interventions such as farmers schools are working well. Despite the many investments that the government has made on small scale farmers, there are several gaps that exist. These include but are not limited to access to financial services, access to markets as well as agro-processing. 4.1.2. Investments by other stakeholders in smallholder farmers Apart from the central and local governments, there are other stakeholders that are investing in small scale farmers. These include but are not limited to Non Governmental Organizations (NGOs) such as Agricultural Non State Actors Forum (ANSAF), Muungano wa Vikundi vya Wakulima Tanzania (MVIWATA), Oxfam, Action Aid and many others. Other stakeholders include such organizations as the USAID, Techno Serve, MUVI etc. Investments by such stakeholders have included but not limited to financial and technical support including training. Some NGOs have also supported smallholder farmers indirectly through lobbying and advocacy for pro-smallholder farmers policy, legal and regulatory framework. Generally, provision of demand-driven as opposed to supply-driven support works well for small scale farmers supported by such stakeholders. 4.1.3. The way smallholder farmers are receiving the support Generally, smallholder farmers are receiving the support positively. They receive the support from the government and other stakeholders both directly and indirectly. For example, extension services from the government are directly provided through the office of DALDO. Government input support to smallholder farmers is provided indirectly through private sector agents (input suppliers/agro-dealers). Support from NGOs is also both direct and indirect. In as far as inputs are concerned for example, farmers have been receiving the support mainly via 5 6. the private sector through voucher system. There have been complaints on the quantity that is provided, late delivery and quality. 4.1.4. Outcome of the investment from smallholder farmers Generally, the investments by the various stakeholders have given various kinds of outcome. Generally, the outcome has been positive in terms of farmers improvement of farming practices. As a result, there have been increases in areas cultivated, production volumes, access to finance, access to markets and improved livelihoods for smallholder farmers. 4.1.5. Returns to the government from smallholder farmers As a results of various forms of invetments on smallholder farmers, there have been different kinds and levels of returns to the government. It is understood that the government does not invest on smallholder farmers so that it (the government) gets monetary profit. The government invests on smallholder farmers as a public good. The aim is to ehance the farmers capability so that they can undertake their agricultural activities better, increase production and productivity, reduce poverty and improve their livelihoods. Indirectly though, the govern, especially local governments, are likely to get some direct and indirect returns for their investments on smallholder farmers. Among other things, as a result of better perfomance due to government investments, some LGAs are able to collect more crop cess from the increased agricultural produce and related economic activities such agro-processing and trade. 4.2. CASE STUDIES FINDINGS Apart from the general findings above, the researchers conducted specific case studies in Iringa, Kilosa and Chamwino district councils. Findings from each of the three case studies are presented in what follows. 4.2.1. THE CASE STUDY OF IRINGA MUNICIPAL COUNCIL 6 7. The study in Iringa involved responses from the Iringa District Council (IRD), MUVI, Tanzania Agricultural Productivity Programme (TAPP), RUDI and Iringa Mercy Organization (IMO) 4.2.1.1. Interventions by MUVI Introduction of MUVI Programme Rural Micro, Small & Medium Enterprise (RMSMES) is a programme commonly known as Muunganisho wa Ujasiriamali Vijijini (MUVI), it was initiated to support the Government in poverty reduction strategy, which broadly aims at transforming Tanzanias agriculture based economy into export & market led, competitive semi industrial but still largely agriculture based economy. See details at: http://www.sido.go.tz/UI/muvi.aspx MUVI interventions in Iringa MUVI has supported about 13,000 small holder farmers in Iringa region. These include sunflower and tomato farmers (about

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