TANZANIA has more than what it takes to become a major floriculture and horticulture exporters in the region
HORTICULTURE is a multi-million dollar transaction in any countries worldwide. In the African Continent, South Africa rank high followed by Kenya, Zimbabwe, and Zambia. Tanzania with a higher potential than most of these African countries, but it’s potential has not yet to be realized through more exports, local consumption, etc as ADAM IHUCHA, narrates.
TANZANIA has more than what it takes to become a major floriculture and horticulture exporters in the region: It has the largest amount of arable land in the region, with more than 88 million hectares of suitable agricultural land. Its large size and varied topography provides ideal water, soil and climate conditions for a complete range of floriculture and horticulture products, from temperate highlands ideal for European flowers and vegetables, to tropical lowland zones ideal for warm-climate fruit and flowers.
It also has three of the largest 10 lakes in the world and a large network of rivers, most areas of Tanzania have significant irrigation sources. Labour costs are also among the most competitive in the world and the country boasts of good air-cargo infrastructure and connections to key markets.
Besides, the main growing region (around Arusha) already has an international airport with a large cold-storage facility for fresh-produce and daily flights to Europe and the Middle East and Dar es Salaam is served by several daily flights to Europe and the Middle East. Yet, a new international airport scheduled for opening in Mbeya before the end of this year, promises to open up even more possibilities for floriculture and horticulture export in the Southern Highlands.
The country also enjoys preferential access to key markets under Everything But Arms (EBA), African Growth and Opportunities Act (AGOA), East African Community (EAC) and other agreements. And within East Africa, Tanzania is a traditional exporter of fresh produce to neighbouring countries.
However, even with all these comparative advantages, the country has a very thin slice of the multi-million dollar global horticultural trade.
Idle land
Of the 88 million hectares of agricultural land, less than 6 per cent is currently being utilized. Much of this land is former agricultural estates that fell into disuse during nationalization wave of the early 60s. Also, there are large tracts of unused land in the Southern Highlands.
“Despite having more potential than most African countries, Tanzania is yet to take the advantage of its vast resources to increase production horticultural crops for local consumption and for export,” acknowledges Jacqueline Mkindi, the Executive Officer of Tanzania Horticultural Association (TAHA). International prices of the commodity have been on steady upward trend over the years, and according to Ms. Mkindi, this should be a good incentive to horticultural farmers in the country to increase production of the crops.
One of the biggest challenges facing the local horticulture production and export is access to the export markets, and compliance various national and international quality standards, such as ones set by a private sector body for the certification of agricultural products around the globe (EUREPGAP), says Ms. Mkindi. “Some of the crops do not meet standards and specifications in the world markets. Most of the horticultural products are also sold raw, hence fetching relatively low prices in the domestic and world markets.”
Aware of the potential of the sub-sector, Tanzania government has moved to forge partnerships with a number of international investors from Holland and other parts of Europe, and well-organized sectoral associations. At the heart of these partnerships is a deliberate attempt by the government to provide extensive support for the investments in the sub-sector and assist farmers in the sector produce crops that meet the EU standards.
Hurdles
There are other bottlenecks though. One of them is the accessibility of appropriate pesticides. The farmers cite legal issues ranging from the pesticides registration procedures, registration fees, limited crop range on labels of already registered pesticides, and lack of harmonization in the regional registration system.
“Although the horticultural sector is already implementing Integrated Pest Management, the sector still appears to have a negative image with the general public regarding the safe use of pesticides,” says Ms Mkindi.
Farmers also cannot access bank loans, a major ingredient of business expansion. Airfreight, poor infrastructure and enabling environment are the other constraints. Like in other developing countries, most banks in Tanzania consider the horticultural sector high risk. This makes the banks reluctant to advance loans to the farmers. For those that are bale to access the loans, the bank normally levy high interest rates on the loan making it very expensive for farmers to borrow.
TAHA Chairman, Colman Ngalo contends that agriculture requires long-term loans – of 7 to 10 years, but adds that very few banks can advance farmers’ loans of this tenure.
Collateral, is another hurdle. Mr. Ngalo says there is confusion regarding the use of land as collateral and since there is no acceptable method of valuing land. He says that the association supports the creation of an Agricultural Bank with the capacity and products to serve the sector.
The revision of financial legislation to enable commercial banks to introduce appropriate products and the development of an image for Tanzania Horticulture as an attractive destination for investment, would also spur the sector, he says.
Direct flight
Ms. Mkindi says there is need for a dedicated cargo flight – charter flight – from Tanzania to the European markets. “At the moment we have limited number of charter flights and this makes it difficult for many exporters to access the European markets directly. Most of them have to go through Nairobi, which is an extra cost. Nairobi flights are also expensive particularly for the exporters who have low volumes of produce.
On infrastructure, she says the growth of horticulture industry in the country would require bringing more suitable land under cultivation, something that at present is very difficult because of the poor state of roads. “Roads construction and rehabilitation which is are clearly essential to horticultural development are not receiving the priority they deserve. The poor state causes a lot of delays during delivery of products to the airport.
The country however has enough water resources to sustain the horticultural production. These resources are underutilized and ineffectively managed, she contends. “Where the law is fairly clear, the management of water resources is a problem. Yet enforcement also a problem.” Poor supply and high costs of inputs locally also pose problems.
Realizing this, some development partners like the Government of Netherlands (through the Ministries of Foreign Affairs, and Agriculture, Nature and Food Quality) took some initiatives for a Partnership on Market Access of agricultural products by meeting export standards.
Such partnerships were launched during the World Conference on Sustainable Development (WSSD) that was held in Johannesburg in 2002. The main objective of such partnership initiatives is to improve access of horticultural products from countries like Tanzania to Europe and other industrialized countries by tackling common export bottlenecks and enhancing cooperation between public and private stakeholders.
The PPP Projects’ objectives
To improve the market access of the horticultural products in Tanzania,
On going projects are including ‘Advocating for a Market Oriented Strategy for Pesticides in Tanzania’ which its main objective is to improve the accessibility to horticultural pesticides in a cost effective way and enhance transparency and awareness about the safe use of pesticides in the horticultural sector
There is also a ‘ Preparation of an Industry Driven Training Programme for export horticulture in Tanzania project’ with an eye to develop a set of curricula for modules forming a training programme for the horticulture export and to prepare a business plan for the implementation of that training program.
Others are ‘Promoting investments through enhancement of Plant Breeders Rights legislation programme’ which its focus is to increase awareness amongst private stakeholders (current breeders in Tanzania and potential international investors) on the national plant breeder’s rights act, to assess the level of satisfaction and comfort amongst private stakeholders with regard to the existing plant breeder’s legislation and control system and to analyze the possibility of undersigning the UPOV convention.
‘Improving the phytosanitary system for horticultural exports from Tanzania project also is among the on-going project, with an intension to have clear and efficient operational procedures with regard to the phytosanitary systems required for compliance by Tanzania to the IPPC for the export of horticultural products; to have inspectors that are knowledgeable and capable of facilitating the export process as regards IPPC compliance and to ensure that the exports and producers of Horticultural produce that get access to the inspection service have a clear picture of the need and role of the service.
In the list also there is an ‘investment Promotion of the Tanzanian horticultural sector’ t o have a campaign in place promoting and creating a positive image of the Tanzanian horticultural sector abroad; to have a package in place offering special incentives for investors in the horticultural sector in Tanzania. All these PPP activities are coordinated by TAHA Secretariat.
Ms. Mkindi believes that all these problems can be addressed through public-private sector partnerships. A national body such as the proposed Horticultural Development Council of Tanzania (HODECT) should coordinate such initiatives, she says. “By working in partnership, we can implement plans to position the industry competitively in global markets and to increase the contributions it makes to the national economy.”
Origins
Horticultural production started in Tanzania in the 1950s, but it was not until 1970s that the produce was exported to Europe. The first cut flower farm was established in 1989.
Exports of vegetables commenced in the 1970s but it was in 2000 that exports of significant volumes started. With the advent of commercial horticulture many farmers have tried their hand on the business but have found it too challenging and given up while others have endured and survived. Analysts say that there is very slow take up of horticulture business in Tanzania.
Tanzania Horticultural Association was registered in the country in April 2004 as the industry lobby. Its formation owes its roots to the reconstitution of the erstwhile Tanzania Flower Association (TAFA). According to industry sources, its reconstitution was necessary since TAFA was more focused on the flower industry.
Export earnings
TAHA membership currently comprises 20 firms mostly exporters based in Arusha and Kilimanjaro regions. The industry earns the country foreign currency worth of US$ 30million annually and employs over 6,000 people mostly women.
According to the TAHA Secretary General Mike Chambers in terms of export value Floriculture is the leading and most dynamic sub-sector. There are some 15 flower farms in and around Arusha – Moshi exporting to the EU market.
The Northern Zone is the most productive, but farmers in Morogoro, Mbeya, Tanga, Iringa, Sumbawanga, regions in Tanzania, are increasingly beginning to realize that there is money in cultivating the crops.
In 2006, horticultural farmers in Tanzania exported 1,706 tonnes of fruits and vegetables. This year they expect to export 3,264 tonnes and next year, it is projected that exports will reach 4,860 tonnes.
In flowers category, a total of 4,792 cut flowers were exported in 2006. This year they expect to export about 5, 549 tonnes and next year, it project that exports will stand at 8,252 tonnes.
“A total of 18 TAHA members exported vegetables and fruits worth over 25,000,000 euros in 2004,” said Ms. Mkindi adding that the industry with over 625 hactare farms mostly located in Northern Tanzania, is anticipating to double the export volumes or by 2008.
ENDS