Inclusive Business in the Tanzania Pulses Sector
Inclusive Business in the Tanzania Pulses Sector
Tanzanians love beans. Common Beans are the third most important staple crop in Tanzania after maize and cassava. They are considered important for food and nutrition security and are becoming increasingly important as an extra sources of revenue for farmer families. Other significant pulses grown include dry beans, cowpeas, chickpeas, mung beans and pigeon peas. Pulses production has grown steadily in recent years, reaching 1.6 million tonnes in 2014. Currently, they represent 12% of crop production in Tanzania.
Producers range from subsistence farmers to medium-sized commercial farmers with approximately 95% of farms being less than 5 ha.
Markets for Tanzania pulses are found in the entire East, Southern and Central African, Europe and India. Tanzania is a strategic supplier to India with about 20% of the country’s imports of pulses. Contrary to popular belief, higher prices can often be found in India and Pakistan compared to Europe. However, market demand for pulses in Europe is on the rise, where demand for pulses is growing as an alternative to meat-based products. This is mainly explained by the growing awareness of consumers on dietary related diseases, boosting demand for more plant-based proteins, meat alternative products and a more diversified diet in general.
Rikolto worked with AidEnvironment to support the Tanzania Pulses Network (TPN) to conduct a Sector Diagnostic in 2017. This study highlighted the challenges within the sector; the specific ones relevant to this initiative are:
Trading relationships and practices within conventional supply chains are mostly opportunistic and unfair. Relationships fluctuate highly, especially during harvesting season when village traders, agents and seasonal traders undermine long term relationships including formal contractual ones where they exist. The lack of price discovery and weak organization of the producer base puts the balance of power in favour of buyers throughout the market system.
Price volatility and the lack of market intelligence at the production base is also a major challenge . In most cases, the market prices are known by those higher up in the chain including traders and exporters while farmers are generally unaware of prices paid in major towns and the export destinations like India and Europe. Supply chain structures vary highly and there are two to four intermediaries between the farmers, wholesalers and exporters.
Productivity and production is very low (799 kg/Ha per season compared to potential of up to 1,235 Kg/Ha) . Farmers tend to use saved seed for too long which negatively influences yield and profitability. High performing seeds are not commercially available as seed multiplication system is deficient, including for Quality Declared Seeds (QDS). Weevils, a type of beetle, are also negatively affecting production volumes.
Inclusiveness of smallholder farmers in terms of access to fair markets is very low due in part to unorganized smallholders and lack of competences by the existing farmers organizations. Only a few of these organizations manage to perform well over a longer period as they lack adequate organizational, leadership and business skills as well as financial sustainability.
The strategy is a private sector led approach. Rikolto will support the Tanzania Pulse Network’s members to pilot inclusive business initiatives. TPN is a network that is composed primarily of traders and exporters engaged in the pulses sector. The target markets will be dynamic and be based on regular assessments of the best return for the risk taken by exporters, traders and farmers. European market is therefore only one of the markets to be targeted.
TPN will engage with Manyara Region stakeholders, which include the Regional Government, Tanzania Chamber of Commerce, Industry and Agriculture (TCCIA) and MVIWATA (farmers membership organisation). The aim of this will be to agree a Public Private Partnership for Manyara to support pulses trade. TPN will also work with importers, including specific work with Casibeans, to take advantage of trade opportunities into Europe, Russia, India, Pakistan and other markets. Rikolto in Belgium will work with Casibeans and other European importers to identify and take advantage of these opportunities.
The Expected Outputs are:
Output 1: Inclusive business chain development in Manyara Region
Supporting expansion of inclusive business models, leading to win-wins for both the farmers and the private actors
Supporting identification of new business development opportunities.
Ensuring farmers access to Quality Declared Seeds .
Output 2: Improved Business Environment for Pulses Trade through working with TCCIA, MVIWATA and the Regional Government.
It is expected that 1600 farmers will benefit from this initiative.
Key achievements to date include:
A Program Management Unit was established including MVIWATA Manyara, TCCIA Manyara, Agricultural Advisor from Manyara Regional Government, EAGC/TPN and Rikolto
exporters submitted proposals to start doing business with smallholder farmers in an inclusive way, and 3 exporters were selected. Unfortunately due to a change in strategy one exporter had to withdraw and we expect to announce a new partner in April 2019.
The first initiatives of the two remaining companies were taken in the last quarter of 2018 and results from the first pulses production/trading season will be assessed in quarter 1 of 2019
Planned work by TCCIA and MVIWATA to improve the trading environment was approved and will start in quarter 1 of 2019
Additional funds were secured for research into weevil management which is being led by Casibeans. Discussions have been held with research institutes and work is expected to start in quarter 2 of 2019