According to the World Food Programme, post-harvest cereal losses are on the rise in Tanzania.
The country loses about 15 percent of maize, the largest proportion of the cumulative 40 percent of cereal crops including wheat and rice , lost annually .
This trend has prompted the government to seek Sh111.9 billion in order to implement the latest National Post-Harvest Losses Strategy (2019-2029).
Post-harvest losses are disproportionately borne by smallholders, who invest in costly hybrid maize seed and fertilizer, and in some parts of the country, even harvest more maize than their family can consume in each season.
Yet, few are well equipped to store the surplus grain, and up to one-fifth of each year’s harvest spoils before it can be consumed by producers or sold to others.
Cumulatively, this translates to around 3.8 million tonnes of cereals lost in post-harvest losses each year worth over Sh600 million (maize alone).
Small-scale solutions, like hermetically-sealed storage bags, can help farming households reduce and manage post-harvest losses.
These are innovative storage options that seal crops in a vacuum pouch and eliminate the need for storage pesticides like actellic dust. Yet, their cost, compared with traditional storage options, such as gunny bags, has meant that they remain inaccessible to a majority of Tanzanian farmers.
Therefore, to protect national harvests, policymakers should make simple storage solutions like Purdue Improved Storage (PICS) bags more affordable to smallholders.
By exempting PICS bags from VAT, the government can make them more affordable and prevent up to 952 metric tonnes of maize from being lost after it is harvested each year.
PICS bags are designed to protect farmers’ harvests by hermetically sealing the grain stored, cutting off the oxygen supply to pests that would otherwise damage it.
PICS bags guarantee 0 per cent pest damage, compared to 8 per cent with alternatives that are widely available, like gunny bags, and they can also be reused for up to three years.
One Acre Fund began distributing PICS bags on credit to Tanzanian stakeholders in 2017. After running rigorous trials, the organisation found that they are an impactful way to reduce post-harvest losses from pests and moisture.
While they do represent a major investment for households, PICS bags generate money for farmers, in the long-run.
For every PICS bag purchased by a farmer, on average, they earn Sh14,158 more in farm profit each year compared to a farmer without access to these bags.
The bags are sold in a package of three costing Sh15,000, so the calculated profit for each of these bundles is Sh42,520 per farmer per year.
One Acre Fund farmers surveyed in Mbeya and Iringa reported they can then spend this additional income on other household expenses like school fees or healthcare.
Therefore, at the national level, PICS bags play a part in improving economic productivity in Tanzania.
Farmers want to own these bags. Among the organisation’s clients, the number of PICS bag bundles purchased has been growing at around 50 per cent annually, from 3,834 sold in 2017 to 5,674 in 2018, illustrating a strong demand for these products.
Currently retailing, on average, at Sh5,000 each, PICS bags are three times more expensive than traditional alternatives in the Tanzanian market.
One Acre Fund offers these bags on credit, with flexible repayment over the course of the growing season, to ensure they are financially accessible to smallholders.
Policymakers could make storage solutions like PICS available to all farmers in Tanzania by removing the value-added tax (VAT) on them. This would make them at least 18 per cent cheaper, making them relatively affordable for farmers and for suppliers as well.
Given the benefits to Tanzanian smallholders and the economy at large, policymakers should consider making PICS bags accessible to all farmers in the country.
VAT exemptions will undoubtedly make these bags cheaper. With universal access to these storage options, more of Tanzania’s harvests will be saved, meaning more income for farming families, and Tanzania as a whole.