Tanzania in attempts to boost tobacco sales

Tobacco growing in Tanzania may get a boost if plans by the government to increase sales are successful.

The Tanzanian government is planning to initiate talks with the member states of the Common Market for Eastern and Southern Africa (COMESA) to seek markets for tobacco in those countries.

Data indicates that in 2017, tobacco brought in more foreign exchange to the country than coffee, cotton, tea, cloves and sisal combined.

However, tobacco production fell considerably over the third quarter of 2018, dropping by a third of the previous quarter’s performance.

The setback was that Tanzania’s tobacco was sold at high prices in other countries because of charging high tax, compared to the same tobacco from Uganda and Kenya.

The country is in talks with Egypt and Algerian ambassadors to Tanzania to prepare bilateral agreements that would enable reduced tax on Tanzania’s tobacco to be sold in those countries in attempt to increase income to tobacco farmers and country at large.

Tanzania is second in Africa in tobacco production after Malawi. However, despite high production of tobacco, it remains a poor country and tobacco farmers worse off while the country loses more than 61,000 hectares of forest annually due to tobacco growing and curing.

In recent years, there has been considerable debate about the social, environmental and economic impact of tobacco growing, especially in developing countries.

Organisations such as the Framework Convention Alliance and the World Health Organisation’s Framework Convention on Tobacco Control have called for tobacco farmers to be encouraged to switch to alternative crops.

Such calls are based on claims that tobacco growing has worse impacts than other crops. In particular, there are concerns regarding deforestation, the exacerbation of poverty and social inequality through bonded labour and child labour and occupational health risks such as green tobacco sickness (GTS).

Despite tobacco being a vital foreign currency earner, most local growers of the crop are languishing in abject poverty with nothing tangible to show for their hard work.

Some 2000 delegates – researchers, scientists, UN and civil society representatives, healthcare professionals and policymakers from more than 100 countries – attended the triennial conference, whose name, “Tobacco or Health,” implies that the two cannot co-exist.

The conference was held amid concerns that the tobacco industry, flush with money from huge profits from their operations worldwide, are targeting the youth group to increase tobacco consumption and cigarette smoking among the young adults.

However, global efforts against tobacco industry received a massive boost from former New York mayor Michael Bloomberg who announced to provide 20 million US dollars to create a new global watchdog agency that will be monitoring tobacco industry’s attempts to undermine tobacco control measures under the WHO Framework Convention on Tobacco Control (WHO FCTC).

The WHO FCTC measures are aimed at reducing the prevalence of tobacco use and exposure to tobacco smoke.

The new global watchdog agency, Stopping Tobacco Organisations and Products (STOP) to be run by his foundation, Bloomberg Philanthropies was launched as the 17th World Conference on Tobacco or Health got underway in Cape Town.

The new initiative came amid reports that tobacco kills seven million people a year and more than 80 per cent of the globe’s 1-billion smokers live in low and middle-income countries, according to the World Health Organisation (WHO).

Also read: Tanzania in talks with Chinese firms in exploration of exporting tobacco to Hong Kong

One Urban Garden; the road to Africa’s food security

The venture is keen to achieve food security, income generation, healthy living and environmental awareness

It is early morning in the outskirts of Kenya’s capital, Nairobi. A group of three young people are working in a field, using hoes to remove plastic bags and other solid waste from the soil in preparation for crop planting.

Together with other youth, they are raising seedbeds of vegetables such as kale, cabbage, spinach, carrots, onions, green peppers, tomatoes, and other commonly consumed vegetables in Kenya.

The seedlings will later be transferred to gardens and irrigated for several weeks before the vegetables are supplied to clients in households and restaurants within Nairobi.

The trio are Mastercard Foundation Scholars, selected for their academic talent, social consciousness, and leadership qualities.

Mutoni Shadadi  from Rwanda, and her colleagues Laetitia Mukungu and JacquilineMaina, from Kenya, are pursuing their studies in agricultural sciences at EARTH University in Costa Rica.

Mastercard Foundation Scholars have formed One Urban Garden, a social venture that gives people an opportunity to engage in the food production process, enhance the farm-to-table value chain,and demonstrate self-sustenance on a small piece of land. The group targets to help Kenya and the East Africa region achieve food security.
From Left: Mutoni Shadadi, Jacqueline Maina and Laetitia Mukungu during the Resolution Social Venture Awards in 2018.

Together, they formed One Urban Garden, a social venture that gives people an opportunity to engage in the food production process, enhance the farm-to-table value chain,and demonstrate self-sustenance on a small piece of land available.

One Urban Garden will provide fresh vegetables to the clients, acting as a training centre and an incubator for job opportunities involving youth.

One Urban Garden aims to provide youth with training in agriculture and agribusiness.The social venture envisions achieving food security, income generation, a healthy lifestyle and environmental awareness-raising among urban dwellers in Nairobi.

“We envision One Urban Garden as a hive of production and service provision. We are planning to start with vegetable production, which will include kale, peppers, and spinach and be readily available for household consumption. The second phase of production will be the introduction of rabbit farming and greenhouse production mainly targeting restaurants. Once the centre is established, six youth will undergo a 21-week training program and they will be in direct contact with our clients as consultants” said Shadadi.

Expected to be fully operational by end of this month (April 2019), One Urban Garden will first identify the farmers and provide training to those that need it.

The Scholars are currently looking for partners and available land in Nairobi and investing much time in studying other similar models, especially from other developing countries.

To serve a larger clientele in Nairobi, One Urban Garden will create several farms in different locations.

“We plan to move in phases and our target for the first phase is to have 25 farmers as our base, as well as a couple of restaurants. As variety is one of our selling points, the prices will vary depending on demand and we plan to make the prices more affordable as we grow.We estimate that farmers will pay 50 dollars for the training each year, and we hope that one day we might take on a big project from a hotel or institution. We are also considering the option of installment payments,” said Laetitia.

One Urban Garden won the Resolution Social Venture Challenge in 2018, a competition that rewards compelling leadership and promising social ventures led by youth.

These young leaders earned a fellowship that includes seed funding, mentorship, and access to a network of young global change-makers to pursue impactful projects in their communities.

Mastercard Foundation Scholars have formed One Urban Garden, a social venture that gives people an opportunity to engage in the food production process, enhance the farm-to-table value chain,and demonstrate self-sustenance on a small piece of land. The group targets to help Kenya and the East Africa region achieve food security.
The Trio

A collaboration between the Mastercard Foundation and The Resolution Project, the Resolution Social Venture Challenge provides a pathway to action for socially responsible young leaders who want to create change that matters in their communities.

Shadadi, Laetitia, and Jacquiline want to use urban farming to motivate African youth who think farming is a dirty job and only meant for people living in rural areas.

“It feels great being a Resolution Social Venture Challenge winner because it proves to me that we have the potential to contribute to change in the world. Being a Mastercard Foundation Scholar makes me feel like a winner because I get a chance to accomplish my dreams and also share them with my community as I give back,” said Shadadi.

Jacquiline said she is overjoyed and is very proud of her team.

“We have started working on the business strategy and sometimes that gets a bit overwhelming, but the teamwork is great and I learn more each passing day. I am also very grateful for this opportunity.”

Laetitia said that being a Resolution Social Venture Challenge winner is both a blessing and a challenge to keep pushing until One Urban Garden starts making a difference in the lives of Nairobians.

“I am thankful to the Mastercard Foundation because it not only gave me the opportunity to pursue my career but also to fulfill my interests and goals, and expand my network.”

The ambitious group’s initiative is just but one example that can go a long way in helping President Uhuru Kenyatta achieve his food security plan under the Big Four Agenda.

READ:EAC to launch platform to promote food security and nutrition

READ ALSO:Kenyan President Uhuru Kenyatta Tackling Food Insecurity as part of his Big Four Plan

 

How Kenya plans to revive ailing coffee industry

Farmers could soon start pocketing 80% of gross earnings from Coffee

President Uhuru Kenyatta is committed to revive the country’s coffee industry if latest indicators are anything to go by.

One of the biggest initiatives announced by the government is the rehabilitation of 500 pulping stations (factories) in 31 coffee-growing Counties across the country.

Coffee farmers are also set to benefit a Cherry Advance Revolving Fund being set by the government; a kitty President Kenyatta says will be operational from July 1 when the 2019-2020 financial year commences. The current financial year (2018-19) ends on June 30.

In the coming fiscal year, the government will unveil Ksh3 billion (US$29.6 million) to be accessed at a much lower three per cent (3%) interest rate per annum.

This is much affordable to farmers whom a huge number currently depend on Savings and Credit Co-operatives (SACCOS), which offer loans at a 1.25 per cent interest rate per month.

Annually, cumulative rates for saccos go up to 15 per cent. Bank loans are also on the higher end despite the capping of interest rates in the country, which places bank rate at four percentage point above the Central Bank of Kenya (CBK).

Currently, CBK’s rate is at nine per cent (9%) as per the recent review, which places the maximum lending rate by commercial banks at 13 per cent.

Despite the cap, banks have continued to invest heavily in government securities while they shy away from lending to the private sector, which they have profiled as high risk borrowers.

During his State of the Nation address on April 4, President Kenyatta said the coffee fund will help to “comprehensively resolve the problem of undue delays in the payment cycle.”

The government is also counting on recommendations by a task force put in place in 2016, when President Kenyatta initiated reforms in the sector.

“My administration has prioritized reforms in the coffee sub-sector, and implemented numerous interventions emanating from the recommendations of the Coffee Taskforce,” the President said.

Farmers’ earnings

As part of the reforms, farmers could start pocketing 80 per cent of gross earnings while Co-operative societies, millers and marketers will share the remaining 20 per cent.

This is however dependent on parliament, if it will pass the new proposed regulations for the sector.

The reforms could go a long way in reviving the once vibrant sector, which has struggled for close to two decades as cartels mint billions at the expense of poor farmers.

READ:Kenya’s coffee doldrums despite numerous revival efforts

The sector has registered a 66 per cent drop in production in the past 20 years, latest government data shows, where production declined from 130,000 tonnes in 1988 to 45, 000 tonnes in 2016-2017.

There were over three million coffee farmers in the country in the 80’s, but the number has reduced to a paltry 700,000 smallholder farmers and 3,200 estates spread across the 31 counties.

“People got tired of being manipulated by the cartels. In the past, Coffee was a reliable crop but now things are different. Personally I uprooted the crop and ventured into tobacco farming,”  Stephen Wankuru, a farmer from Migori County told The Exchange in an interview.

Migori is one of the counties where coffee production has diminished.

In Kiambu County, a rich coffee growing region, farmers have recently been uprooting the crop in favour of real estate developments, as developers move to expand investments away from the congested capital-Nairobi.

Governor Ferdinand Waititu was last year forced to outlaw uprooting of coffee by investors to save the crop.

“We do not want to see people uprooting coffee to put up houses. We want to revive the sector,” Governor Waititu said.

Sector performance

Currently, the sector contributes about Ksh20 billion (US$197.3 million) per annum to the economy, data from the Kenyan National Bureau of Statistics (KNBS) shows.

Kenya hosted the 124th Coffee Council meeting in Nairobi in March this year, where industry players converged to discuss challenges and future developments in the sector.

During the forum, International Coffee Organization (ICO) Executive Director José Dauster urged the country to scale up local consumption of coffee products, saying it will make help the sector become competitive even with dwindling export which is a global trend.

Kenya trails her East Africa neighbours with the lowest growth in the coffee sub-sector at 3.2 per cent. Uganda had the highest at 36 per cent followed by Rwanda at 17.6 per cent and Ethiopia at 16.3 per cent.

The average growth of the coffee industry on the continent is 12.3 per cent, according to Kenya’s Coffee Sub-Sector Implementation Committee.

During the Nairobi meeting, ICO announced measures aimed at improving the global coffee prices.

Executive director- Dauster  hinted that the organization is mobilizing financial resources from the private sector and donors to support the sector, promoting coffee consumption and advocating the importance of coffee sector.

“We intend to ensure that the international coffee community not only receives a fair living income but also long term sustainability of the global coffee sector,” Sette told journalists at the forum.

ICO has planned a series of consultative meetings this year in partnership with the International Fund for Agricultural Development (IFAD), to be held in May, June and September in Italy, Belgium and Britain respectively. The meetings will focus on strengthening the sector.

Meanwhile, President Kenyatta has also committed to reform the country’s Sugar and Maize sub-sector, a move that will go a long way in supporting his ‘Food Security’ plan under the ambitious Big For Agenda.

“To address the perennial challenges in the Sugar and Maize sub-Sectors, my administration commits to decisively act on the recommendations of the two sectoral taskforces that are slated to report their findings later on this month. I expect that the teams will propose bold and transformative interventions to revive and sustainably grow these important sub-sectors,” the President said in his address to the nation.

ALSO READ:Why East African coffee is in danger of extinction

Tanzania among countries set to receive AFDB grant

Tanzania is one of the eight African countries which are to benefit from the African Development Bank`s (AFDB) new grant projects funded by the Agriculture Fast Track Fund (AFT) in support of agribusiness Small and Medium-sized Enterprises (SMEs).

According to a statement issued on 11th March, 2019, the pan African bank is next week expected to launch 17 new grant projects which are to be implemented in eight African countries – Tanzania (4), Ghana (4), Burkina Faso (2), Malawi (2), Mozambique (2), Ethiopia (1), Nigeria (1) and Senegal (1).

The AFT fund is managed by the agriculture and agro-industry department of the African Development Bank. It supports the development of a strong pipeline of `bankable` agriculture infrastructure projects and assists African agribusiness SMEs in project preparation activities to ease their take-off. The fund is supported by the governments of the USA (through USAID), Denmark (through DANIDA) and Sweden (through Sida).

The fund finances the project development cost of a broad range of agriculture infrastructure, spanning the entire value chain: from production to the market. Target projects range from rural feeder roads to irrigation, agro-processing and marketing facilities, and out-grower schemes. The emphasis is on projects that contribute to the food security, income enhancement, job creation, and livelihood of smallholder farmers.

The projects are being implemented in 10 eligible regional member countries (RMCs) of the Bank: Benin, Burkina Faso, Cote d`Ivoire, Ethiopia, Ghana, Malawi, Mozambique, Nigeria, Senegal and Tanzania.

AfDB is a is a multilateral development finance institution, which was founded in 1964 and comprises three entities – the African Development Bank, the African Development Fund and the Nigeria Trust Fund.

The AfDB`s mission is to fight poverty and improve living conditions on the continent through promoting the investment of public and private capital in projects and programs that are likely to contribute to the economic and social development of the region.

AfDB is a financial provider to African governments and private companies investing in the regional member countries (RMC). While it was originally headquartered in Abidjan, Cote d`Ivoire, the bank`s headquarters moved to Tunis, Tunisia in 2003, due to the Ivorian civil war; before returning in September.

Also read: Africa Tech Ventures (ATV) gets AfDB funding for expanding its operations in East Africa

Three EAC countries to benefit from AfDB’s pest control project

Equip farmers with technology to transform agriculture- AfDB boss says

 

 

‘Uber of tractors’ moves to bridge agricultural mechanisation gap in African farms

Hello Tractor and CTA launch partnership to support smallholder farmers access mechanization

Hello Tractor and the Technical Centre for Agricultural and Rural Cooperation ACP-EU (CTA) have announced the launch of a joint partnership project to increase smallholder farmers’ access to mechanization services and youth employment opportunities.

The partnership project will enable Hello Tractor to expand its services across Nigeria and Kenya over the next one year to connect 5,000 smallholder farmers to mechanization services, as well as to create jobs for youth as tractor operators and booking agents.

Best practices and lessons learned will be shared on implementing digital services for agricultural mechanization.

“We are delighted to partner with Hello Tractor in expanding its innovative digital platform to reach a large number of users that will contribute not only to modernizing smallholder agriculture and increasing productivity but also to attracting young people to agribusiness in Africa,” said Michael Hailu, Director of the CTA.

Across sub-Saharan Africa, farmers face some of the lowest rates of mechanization. Typically, within labor-constrained markets, mechanization is the solution to supplement the power gap. However, despite its benefits, cost and access have been key impediments to its widespread adoption.
Connecting fragmented farm plots to a cluster drives more equitable access to mechanization for farmers and makes serving the area profitable for tractor owners.
Hello Tractor connects tractor owners to farmers through an Internet-of-Things (IoT)-enabled digital solution that bridges the gap between manual and mechanized farming.

How Africa’s 122 million mobile banking accounts can fund agriculture

Hello Tractor enables farmers to request affordable tractor services, while providing enhanced security to tractor owners through remote asset tracking and virtual monitoring. Through technology, the company is creating sustainable business opportunities for compact tractor owners, while ensuring smallholder farmers have affordable and convenient access to mechanization services.
“We are excited to work with CTA to improve the delivery of mechanization services to smallholder farmers. Through this collaboration, we will identify, train, and grow the number of youth serving as booking agents on serving farmers” said Jehiel Oliver, Founder and CEO of Hello Tractor. “This partnership will grow demand for tractor services through targeted digital initiatives aimed at better coordinating the market.”
The Technical Centre for Agricultural and Rural Cooperation (CTA) is a joint international institution of the African, Caribbean and Pacific (ACP) Group of States and the European Union (EU). Its mission is to advance food security, resilience and inclusive economic growth in Africa, the Caribbean and the Pacific through innovations in sustainable agriculture. CTA operates under the framework of the Cotonou Agreement and is funded by the EU.
Hello Tractor is an award-winning agricultural technology social enterprise focused on improving food and income security for smallholder farmers relying on expensive and often unavailable manual labor.
The company has developed technology to increase and optimize tractor activity across African as well as Asian markets. Hello Tractor connects tractor owners to farmers through an Internet-of-Things (IoT) digital solution that bridges the gap between traditional farming and more technologically advanced approaches.
Its platform simplifies complex data to make tractors profitable as business assets even in smallholder farming systems. This disruptive technology holds the potential to increase agricultural productivity and farmer income for a more secure global food system.

SMART Farming solutions bring convenience to Kenyan Farmers

Tanzania generates $7.8 million from coffee exports

In a recent statement by the Tanzania Coffee Board (TCB), Tanzania earned Tshs.180 billion ($79 million) from the sale of over 65,000 tonnes of coffee collected in the 2018/2019 crop season.

The board Director General, Primus Kimaryo said 40,940 tonnes of coffee were sold through the TCB Coffee Exchange, with the remaining 24,583 sold through Direct Coffee Export. Robusta dominated the direct export with 19,399 tonnes constituting 78.9 per cent while 5,183 tonnes of Arabica coffee made 21.1 per cent of the consignment.

Mr. Kimaryo said that although coffee production during the 2018/2019 season was 65,000 tonnes, an increase of 30 per cent from the previous year`s 50,000 tonnes, prices in the world market were not favourable to farmers.

He challenged farmers from across the country to put more emphasis on the production of high quality coffee to fetch good prices on the world market in the future seasons.

Outlining how each coffee producing region fared during the season, Mr. Kimaryo said Kagera led all regions with production of 29,456.9 tonnes, ahead of Ruvuma, Songwe and Kilimanjaro which produced 16,104 tonnes, 10,996 tonnes and 3,135.4 tonnes of coffee respectively.

Other regions each with the quantity of coffee produced are Mbeya with 2,204.8 tonnes, Arusha 1,985.6 tonnes, Kigoma with 1,264 tonnes and Mara produced 199.5 tonnes. Tanga produced 100 tonnes, Njombe with 40.3 tonnes, Iringa 21.7 tonnes, Manyara produced 14 tonnes and Morogoro and Katavi each producing only two tonnes.

Giving projections for the coming coffee buying season, Mr. Kimaryo said the board anticipates production to decline to 50,000 tonnes, with 20,000 tonnes of Robusta and 30,000 tonnes of Arabica coffee. He attributed the production decline to a fluctuating coffee cycle and heavy delayed rainfall season in the Northern Zone.

He further named Japan as the leading consumer of Tanzania`s coffee, accounting for 27 per cent of coffee exports from Tanzania. Germany, Belgium and Italy accounted for 17, 12 and 10 per cent respectively while both Morocco and the United States of America accounted for 6 per cent each. Israel, South Korea, Spain, USSR, India, South Africa and Sweden each consumed two per cent of Tanzania`s coffee.

Also read: Tanzania coffee production to register 43,000 tonnes in 2017/18

 

            

Magufuli reclaims cashew plant from former minister

On his tour of the cash growing Mtwara Region in the south of Tanzania, President Magufuli ordered thorough inspection and assessment of privatized cashew nut processing industries countrywide and repossession of all dormant plants.

He directed the ministries of Industry and Trade and Agriculture to jointly carry out the inspection and assessment. He stated that the country cannot continue seeing the government encouraging people to increase cashew nut production without reliable processors of the produce. The president urged all the people who had been entrusted by the government to operate the cashew nut processing factories to concentrate on the purchase of the crop as it now appears they have failed to operate the firms, and hand back ownership of the plants to the government.

He noted that majority of the people who had been entrusted with operating the factories had actually done nothing, citing a minister in the third phase government (whom he did not name) who used the cashew factory as collateral to obtain a loan from a financial institution, and instead used the money in other issues.

The president therefore instructed the Agriculture Minister, Mr. Japheth Hasunga to immediately confiscate the factory from the former minister, and warned that the matter would be filed to court should the owners oppose the confiscation. He told the Agriculture Minister in case the owners resist, he should file a case charging them with lost earnings to the government during the period when the factories were not functioning, with interest inclusive.

He also stated that he had spoken to one person through the phone who promised to revive a factory in one month, and directed the Permanent Secretary in the Ministry of Trade and Industry to remain in Mtwara and ensure that all dormant cashew factories are handed back to the government.

Tanzania currently has eight operational cashew processing factories including five that were privatized; which are Micronix System Limited (Newala II), Mtwara Cashew Company (MCC) 2005, Export Trading Company Limited (Tunduru), Micronix System Limited (Likombe) and Safa Petroleum and Mineral Company (Kibaha). The other three private owned companies are Naliendele Agricultural Research Institute, Amama Farmers and Hawte Investment Limited.

The eight operational factories are among the 23 cashew processing facilities whose annual combined and operational capacity is 42,200 tonnes and 11,142 tonnes respectively. Fifteen factories are currently not operational for various reasons and they include Agro Focus Company Ltd (Newala I), BUCCO Investment Ltd (Lindi), Lindi Farmers` Company (Nachingwea), Mohammed Enterprises (T) Ltd (Tanita II) and Cielmac Company Ltd (Tanita I). Others are Olam Tanzania Ltd (Likombe Warehouse), Southern Jumbo Cashewnuts Ltd, Masasi High Quality Farmers (Chakama), UVUKI Cashew nut Factory, Kitama Farmers Group Factory, Perfect Cashew Kernels and Demros.

Also read: Chinese firm cushions the Tanzania cashew nut industry

Reprieve for cashew nut farmers following President Magufuli’s directive

President John Magufuli has began his official state visit to the Mtwara region that is best known for its cashew production.

During the laying of a foundation for the expansion of Mtwara Airport, the President said that 18,103 farmers who had already been verified would receive their payment.

He directed the Treasury to urgently release Tshs.50 billion ($21.7 million) to start paying the farmers who have been waiting for a number of months with their cashew nut stocks already in warehouses. The president clarified that so far, the government has already made payments totaling to Tshs.578.7 billion ($251.6 million) to nearly 99 per cent of farmers, as they had less than 1,500 kilograms of cashew nuts.

The President further hinted that during the verification exercise, at least 390,765 farmers with cashews less than 1,500 kilograms were approved for payment. They had 160, 669.3 tonnes of cashew nuts in total and 373,149 of them have so far been paid, thus 159.865.2 tonnes being already paid for. He further stated that the reason as to why around some 17,616 farmers who had cashew less than 1,500 kilograms were errors in their bank accounts, but assured them payment after the errors were verified.

Government cares about the farmers’ profits

Beside, farmers` payments, the government paid Tshs.5.1 billion ($2.2 million) for logistics, Tshs.1.3 billion ($565,217) for coordination and Tshs.6.6 billion ($2.8 million) for storage facilities.

He also declared that the government does not care about the loss it will encounter on the cashew it bought from the farmers, but rather cares about the profits the farmers will get from the sales citing the Tshs.3,300 ($1.4) government indicative price against the traders` offer between Tshs.1,500 ($0.6) and Tshs.2400 ($1.04).

The President was also lenient on the middle men who had been excluded from the payment on grounds that payment was only to be made to those with farms. He similarly noted that the government had commenced the processing of cashews with 15,000 tonnes as the first batch, and called upon investors to establish more cashew processing plants.

In February, the government admitted that it had yet again failed to beat the February 15th deadline for the verification and payment of all cashew farmers as thousands had been reached. Agriculture Minister, Japheth Hasunga said that a total of 12,378 farmers with more than 1,500 kilograms were yet to be verified. The deadline for verification and payment of all farmers was later extended to March 31st which elapsed last weekend.

Speaking in parliament in February this year, Prime Minister Kassim Majaliwa directed that the verification and payment of cashew farmers ought to be completed by February 15th. The premier had earlier on set February 5th as the deadline after the government missed the initial deadline set by the president on January 31st.

Also read: Tanzania’s cashew nut puzzle still unsolved

Nairobi Farmers Market in Runda opens in July

The Nairobi Farmers Market is under construction in the upmarket Runda Estate, off Kiambu Road.

Kenyan farmers will soon have their own market selling directly to consumers, cutting off the traditional value chain that is replete with middlemen.

The Nairobi Farmers Market, which is under construction in the upmarket Runda Estate, off Kiambu Road, will contain 45 stalls exclusively operated by farmers.

This borrows from international practice where most cities have farmers markets that supply produce direct from the farms to the consumers.

Produce traceability and guarantee

While some provide temporary selling space for different farmers on a day-to-day basis, others lease out permanent shops that are operated by individual farmers who take the space on a long-term basis.

“We are essentially addressing the contradiction where farm-gate prices for cabbages, for example, are less than Kshs10 a piece but the consumer pays Kshs60. In-between numerous traders, brokers and county levy collectors eat the sweat from the farmer and the savings from the consumer. We are creating a facility that will be a big help for both the farmer and the consumer,” says Munene Mashine, the Project Manager.

He says the other concern the market will address will be traceability of produce and guarantee of good agricultural practices.

Questions have been asked about some of the fresh produce sold in Kenya, with suspicions that some of it is grown with sewage and other polluted water.

All the farmers/shop owners will have to submit to regular inspections and certification, similar to what is required of export produce.

The proposed market, which is expected to open in July, will contain sections for fresh produce, Beef, fish and poultry products, dairy produce and a grains section.

Supplying institutional customers

The market developers say they will encourage stall owners to contract and supervise small-scale growers to ensure sufficient supplies within the set quality guidelines while also spreading the benefits of the market to more farmers.

By aggregating produce from the many farmers in the market, they hope to create a secondary outlet for supplying institutional customers such as hotels, restaurants, schools and hospitals.

This will ensure and an expansive market potential that can provide an outlet for thousands of farmers.

“We will encourage shop owners to sign up out growers across the country, and even to work with County Governments where necessary. This way we can create an efficient road to market for the exceptional pineapple growers of Homa Bay, the sweet potato farmers in Kakamega and the honey producers in Baringo and elsewhere. We are creating a platform that offers guarantees at both the supply and demand side of the equation and hopefully, we can provide some stability for everyone,” says Mashine.

Home deliveries campaign

Globally, farmers’ markets usually include an eating out section where freshly-prepared dishes are served.

The markets, such as the Borough Market in London, La Boqueria in Barcelona and the Shongweni Farmers Market in South Africa, are top tourist attractions as they provide a good perspective of what the country has to offer.

The Nairobi market will also have a restaurant and since this is Kenya, a nyama choma outlet. Some farmers will be selling produce that has gone through some basic primary processing.

The developers say they want the market to be “fun for the shoppers because even though price advantage is important, it is not the only thing that matters to the modern shopper.”

The market is being developed by a local investor, United Agromarts Limited.

In order to also be in tune with modern shopping trends, the market plans to launch an aggressive home deliveries campaign driven through the Nairobi Farmers Market App.

“It will be a blend between the Uber and the Jumia technologies – you do your shopping online, and we are able to find where you are using the Google Maps facility. We will launch this as soon as the market opens,” says Mashine.

You can also read about Kenya’s coffee doldrums despite numerous revival efforts and what Africa can learn from a slum with USD 1bn annual turnover.

Popular markets in Kenya

There is the Organic Farmers Market which was started in 2010 with about 10 farmers.

It first opened at The Talisman in Karen but it is now hosted on Saturday from 9 am to 4 pm at Marula Studios, 40 Marula Lane in Karen.

The market welcomes certified organic farmers offering farm fresh organic produce and various healthy food businesses.

Other markets include Kariokor and Maasai Markets which deal with curios, unique-African jewellery, décor items and fabric, Toi and Gikomba Markets which are flea markets.

For foodstuff, Muthurwa, Ngara Market and City Market in Nairobi are some of those that have a big variety to choose from.

However, these markets remain decrepit making it difficult to shop especially during the rainy seasons.

And, this is what it takes for Kenya to break into the European Union market, as Tanzania expands its meat market as a Kenyan billionaire invests in Nigeria’s Kobo.

Economic impact of smallholder farmers in East Africa

Today’s indicator figure is 19,675,110

19,675,110 of what?

 

19,675,110 is an estimate of the number of smallholder farms in East African Community (EAC) countries as determined by the most available statistics from international data providers and reports from the respective country as available.

According to the Food and Agriculture Organization (FAO) of the United Nations, a smallholder farm is one that produces crops with less than approximately 2 hectares equivalent to a land mass the size of 100 meters by 200 meters.  Smallholder farms are typically are owned or managed by a single family or extended family.  Other definitions of smallholder farms in East Africa include titles as unregistered farms in Tanzania or household farms in Uganda and Rwanda.

Which EAC country has the highest and lowest number of smallholder farmers?  

 

Tanzania has the largest number of smallholder farms with 7,187,032 largely attributed to its large population and land mass respective to other EAC countries.  This is followed by Kenya with 4,469,494 farms, Uganda with 3,950,000 farms, Rwanda with 2,165,000 and Burundi, with the smallest number, or 1,903,584 smallholder farms.

How does the number of smallholder farmers in the EAC compare to other regions of the world?

 

Economic impact of small holder farmers in East Africa
The economic impact of smallholder farmers in East Africa – The Exchange

There are approximately 475 million smallholder farms in the world of which China has approximately 166 million, or 35% of the world total, followed by India with 114 million, or 24% of the world total.  EAC countries and it is over 19 million farms comprise approximately 4% of the world total.  The remainder of Sub-Saharan Africa has approximately 23 million, or 5% of the world’s smallholder farms.

Is the number of smallholder farmers in the EAC increasing or decreasing?

It’s largely unclear.  Some reports suggest smallholder farms are decreasing in some countries and increasing in others.  From 1960 to 2000 there have been 15 Sub-Saharan African countries reporting a decrease in smallholder farms compared to 3 reporting an increase.  Decisions made in the current generations of East Africans will determine if farms are divided among family members or sold off and consolidated along with farms owned by other families, organizations, or corporations.

 

What impact do smallholder farmers have on the economy of the EAC?  

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 In the EAC smallholder farms contribute roughly 30-40% of GDP, employ roughly 70-80% of citizens, produce approximately 70% of the food that people in EAC countries consume every day.  Despite this impact, smallholder farms continue to be among the most underserved markets in the world.

 

What is being done to better serve the needs of smallholder farmers?  

 

The governments of EAC countries, a multitude of development partners, NGOs, donors, established private sector businesses, and startup businesses are all seeking to improve the needs of smallholder farmers.   A few larger programs and initiatives include the following:

The EAC is supporting initiatives around food security, irrigation, early warning systems, research and training, interregional trade which all affect smallholder farmers – https://www.eac.int/agriculture/strategic-interventions

The FAO has developed its East Africa Resilience Strategy for 2018-2022 to contribute to enhanced food security and nutrition – http://www.fao.org/resilience/resources/resources-detail/en/c/1174823/

USAID has developed a program called Feed the Future which seeks to work with countries in the EAC and others to develop agricultural sectors with a particular focus on smallholder farmers – https://www.feedthefuture.gov/

 

What investment opportunities are growing with this phenomenon?

  • Lending and Credit – One of the main challenges facing smallholder farmers is access to credit due largely to poor collateral, varying financial product needs, and lack of credit information.  In Kenya, approximately 33% of smallholder farmers have access to credit with loan sizes at approximately $195, or 8% of their annual income.  In Tanzania, only 17% of smallholder farmers report having access to credit.   There are dozens of microfinance companies and over 40 fintech startup companies operating in Kenya alone, many seeking to address this market gap and many seeking capital for expansion.

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  • Seeds and Agricultural Inputs – Approximately 17% and 34% of smallholder farmers in Tanzania and Kenya respectively have access to improved seed varieties.  Without these seed varieties, the potential yield and income from these farms are limited. Other agricultural inputs such as fertilizer, pesticides, irrigation, and farming insights are also lacking in EAC countries.  Several startup companies in East Africa are focused on precision agriculture or using sensors and data analytics to improve farming inputs and outcomes, many of which are seeking expansion capital to grow.
  • Supply Chain – getting perishable agricultural products from a smallholder farm far away from main roads all the way to a dinner table presently involves a largely informal network of motorbikes, village markets, a limited set of cold storage enabled trucks, city markets along with traders buying and selling goods throughout.  Additionally, getting products to these smallholder farmers from international or local providers requires a similar logistical challenge.  Typically supply chain businesses serving smallholder farmers tend to be informal and low margin with significant opportunities for consolidation and efficiency.

How can I learn more?

 

The Number, Size, and Distribution of Farms, Smallholder Farms, and Family Farms Worldwide – https://www.sciencedirect.com/science/article/pii/S0305750X15002703

The Economic Lives of Smallholder Farmers – http://www.fao.org/family-farming/detail/en/c/385065/

Smallholders Data Portrait – http://www.fao.org/family-farming/data-sources/dataportrait/farm-size/en/

Tanzania Agricultural Census – https://www.nbs.go.tz/nbstz/index.php/english/statistics-by-subject/agriculture-statistics/1089-2016-17-annual-agriculture-sample-survey-crop-and-livestock-report

Uganda Census of Agriculture – https://www.ubos.org/publications/statistical/2/

Rwanda Agricultural Household Survey – http://www.statistics.gov.rw/publication/agricultural-household-survey-2017

About the authors:

David L. Ross is the Managing Director at Statera Capital, Distinguished Professor of Practice at Carnegie Mellon University-Africa, and US Ambassador to the Open University of Tanzania.  David is active in growing companies in Eastern and Southern Africa through angel investment, investment advisory, strategic partnerships, and executive education. Connect on LinkedIn at http://tz.linkedin.com/in/davidlross1 or at david@stateracapital.com .

 

Catherine Mandler is a Consultant at Statera Capital. Connect on LinkedIn at http://www.linkedin.com/in/CatherineMandler or at catherinemandler@stateracapital.com .