Tanzania has a huge untapped potential in Agricultural Production. This even applies in the arid areas that would seem to be problematic for economic viability. Ed Charles, who has a PHD in Tropical Agriculture and has worked in Africa for 45 years, has been promoting a strain of Pigeon Pea developed by IRCISAT in India and Kenya that will grow in the arid regions of Tanzania and yields up to 5 times the amount of the local variety of Mbazi. It is disease resistant and being a legume, is good for the soil. Its roots go to a depth of 4 feet making it drought resistant. It can yield around a tonne per hectare and at $500 per tonne, this represents an excellent return to farmers as their input costs are low.
Kilimo Markets: Ed and his son Daniel have formed Kilimo Markets as a grain trading business, providing an export market for local farmers. In a subsistence economy, there is little profit in growing produce for the local market, so Kilimo Markets have found a large, growing and profitable market for ‘Pulse’ in India and the Middle East. Considering the low-cost environment in Tanzania and good soils and rainfall, there is huge growth potential for this industry to bring relative prosperity to many arid regions in Tanzania, and indeed East Africa in general - the uptake is incredible. They began in 2010 and even having to cope with a drought last year, they now have around 40,000 small farmers selling to them this season! Because they are connecting farmers to a better marketing opportunity, they have given the farmers the motivation to improve, and consequently the uptake of improved practices has been rapid. If one were to use percentage to describe uptake, it is 350%! Ie. Of the 12,000 farmers trained, they have 40,000 using the system. In around 40 locations, they have trained some 12,000 farmers who are formed into the base groups of Volunteer Savings and Lending Groups (VSLGs) aggregating to form Farmer Marketing Associations (FMAs) with the members of the VSLGs owning and managing the FMAs . (Read further below). The FMA is a legally constituted business, that after three years the Banks will offer loan facilities for machinery and infrastructure. Because of the obvious benefits from the better system, a further 30,000 farmers are trading with them, though they are not formally members of an FMA. The result is that in many of these villages that were basically subsistence farming with little or no real income two years ago, they now are bringing in tens of thousands and in some case hundreds of thousands of dollars into the community.
Many of these villages that were basically subsistence farming are now bringing in tens or hundreds of thousands of dollars into the community.
FARMER MARKETING ASSOCIATIONS (FMAs)
The methodology used captures the best practice of the past 12 years in Tanzania and elsewhere in East Africa of farmer organisation. This involves the basegroups of Volunteer Savings and Lending Groups (VSLGs) aggregating to form Farmer Marketing Associations (FMAs) with the members of the VSLGs owning and managing the FMAs. This methodology builds farmer ownership in a farmer owned business model which is sustainable with support from other farmer-friendly supportive services (like the seed supply chain, the certified seed and seed registration service, the market broker business model and the knowledge of the research sector).
This is a real innovation and with good training over time, the farmers are gaining strength and confidence to work together, benefit collectively and sustain their collective marketing over time. FMAs have learned how to collectively market their produce and through experience, 30% of the farmers who market through the FMA are members, and a further 70% are non-member farmers who are “pulled” into collectively market their produce through the FMA. The reason for this is that prices are fairer and the FMAs buy over a weigh scale rather than by volume which is the normal practice of middlemen. When selling by volume, individual farmers lose up to 20% of their produce due to deliberate errors in estimating weights by middlemen. Therefore, the “pull” of 70% of small farmers to sell through FMAs is a testimony to their success compared to the traditional system of middlemen marketing as individuals.
Collective marketing also allows a fairer and more transparent marketing access to lucrative markets that favour farmers. Traditionally, market chains are controlled by large Exporter/Wholesalers, who set prices and often act in cartels and take a large percentage of the profits in these chains, on which most small farmers depend for their livelihoods. Consequently, the present marketing systems keep small farmers perpetually poor.
We are excited to be working with FMAs and believe that this network holds the keys to unlocking Tanzanian agricultural potential and subsequently lifting villages out of poverty.