Agribusiness

Tanzania agribusinessTanzania Agribusiness

Agribusiness, or commercial agriculture, is the business of agricultural production, which in Tanzania includes agrichemicals, crop production, distribution, and farm machinery, among others.

Tanzania has an estimated 1,000–2,000 large scale farms and estates with an average size of 1,100 hectares (ha), while the country’s available irrigable land stands at 29m ha, which leaves the sector well below potential.

This is due to smallholder crop farmers’ limited access to modern farm technologies and inputs, inadequate storage infrastructure, high transport and marketing costs, low technology adoption, and lack of affordable inputs such as improved seed and quality fertilizer.

The Government of Tanzania (GoT), together with development partners and commercial agribusiness investors, is working to address these challenges by creating stronger links between commercial and smallholder farming, and by developing more accessible routes to market for agribusinesses.

The GoT’s newly established Agricultural Development Bank, whose mission is to increase farmers’ access to credit, embodies this approach.

In addition, in March 2016, the World Bank (WB) approved USD70m in financing to support the sector by linking smallholder farmers in Tanzania to agribusinesses for boosting incomes and job creation.

This will be done by providing incentives for links between agribusiness firms and smallholders by awarding grants to such partnerships.

Tanzania Agribusiness Potential

The Clinton Development Initiative (CDI), an initiative for development of agribusiness projects, indicates that there is a growing demand for high-quality cooking oil in Tanzania as the country imports over 50% of its vegetable oil from Asia.

CDI believes there is a strong demand for locally produced oil as much of the oil from Asia is of low quality.

The Private Agricultural Sector Support (PASS), a facility established to stimulate investment in commercial agriculture, notes that sugarcane is an important commercial crop in Tanzania.

However, the sugarcane farming and processing in Tanzania is very small and cannot meet the annual demand for sugar.

Currently (2016), Tanzania produces an average of 300,000t of sugar per year, while the demand is estimated at 590,000t per year.

PASS stresses that Tanzania is well situated for the production of sugarcane and that it is currently for investors in the sector to meet its domestic demand.

According to PASS, other sectors with agribusiness potential in Tanzania include beeswax, cashew nut, coffee, maize, rice, and sorghum, among others.