Sunday, March 19, 2017

Spend 10pc of National budget on agriculture

By Citizen

Many Tanzanians must be recoiling as food prices are soaring and unemployment remains high. An International Monetary Fund projection that the economy will grow at average of 6.7 per cent between 2016 and 2021, down from 7 per cent over the last two decades, is unsettling.

As the industrialisation agenda is gaining impetus, agriculture – the country’s economic mainstay – which could supply raw materials to agro-industries, is saddled with under investment and grew at 4.4 per cent over 10 years: too low to make a dent in poverty.

Credit to agriculture hobbled from 8.7 per cent in 2013 to 7.8 in 2014, down to 7.7 per cent in 2015 although it accounted for 28 per cent to gross domestic product, 30 per cent of exports and 65 per cent of inputs to industries. The sector employed around 70 per cent of the country’s workforce.

Rain-fed agriculture is prone to vagaries of weather, yet little has been done to promote irrigation for so long despite having abundant water bodies. We have put the cart before the horse. Now nature is not on our side.

Maize prices have risen by 40 per cent as shortages bite. A maize production shortfall of 400,000 tonnes in the current season has been projected because of inadequate short rain.

Last month’s Bank of Tanzania report indicated that wholesale prices for a 100-kilo bag of maize climbed from Sh67,044 in January 2016 to Sh93,356 in January 2017. The National Food Reserve Agency (NFRA) in January was below the monthly average. The NFRA stock, which mainly consists of maize and sorghum, had 86,834 tonnes at the end of January 2017 below 89,692 tonnes held in December 2016.

However, the grain stock held by the NFRA was below the monthly average of 100,000 tonnes for 2016 compared with a monthly average of above 300,000 tonnes in 2015, an average of above 200,000 in 2014 and an average of above 100,000 in 2013.

Traders accused of hoarding cereals

NFRA has 33 grain silos that have the maximum capacity of storing 246,000 tonnes of grains. The Ministry of Agriculture, Livestock and Fisheries Development has accused traders of hoarding cereals to increase prices.

It has allayed fears of an ominous outlook of the food market, saying maize production in the 2015/2016 season was 6,148,699 tonnes, enough to meet 2016/2017’s demand of 5,202,415 tonnes.

But it has advised the public to stock their food surplus because of anticipated shortages in the 2017/18 harvest season.

The National Bureau of Statistics reported that consumer prices in increased by 5.5 per cent year-on-year in February 2017, following a 5.2 percent rise in the previous month.

It was the highest inflation rate since June 2016 mainly boosted by rising prices for food.

The purchasing power of Sh100 reached Sh93.48 in February, 2017 compared with Sh94.42 cents in January 2017.

So what can we do? Let’s not tinker with peripheral matters. Nor should we cry over spilled milk. For a start, we should spend 10 per cent of the government budget on agriculture to ensure food security, guarantee millions of jobs and economic prosperity. We have 440,000 arable square kilometres.