Transforming Tanzania’s agriculture sector by developing value chains

Seeds of Gold had an interview with the Chief Executive Officer of Agricultural Markets Development Trust (AMDT), Mr Charles Ogutu, who talks about how the development of market systems value chains can be of benefit to the country’s largest economic sector.

Q: When and why was Agricultural Markets Development Trust founded?

A: Agricultural Markets Development Trust (AMDT) was founded in 2014 after a series of thoughts on best bet vehicle to address the continuing market system related challenges for the agricultural sector. It received formal registration in 2015 under the Trust Act. The idea is to bring development to the people in a more sustainable way.

The mission of the Trust is to unleash large scale systemic change in the agricultural market systems that are critical for the productive poor in the agriculture sector. In practice, this means that the Trust’s intervention is geared towards unlocking the challenges in the market systems that hinder the full participation and good returns to smallholder farmers, hence increase their incomes and create more jobs.

Tanzania’s desire to transform into a middle-income economy is hinged on agricultural growth. Therefore, the fundamental reason for the establishment of Agricultural Markets Development Trust (AMDT) was to contribute to poverty reduction through increased income for smallholder farmers and employment creation at all levels within the various value chains.

To do this, the Trust plays a facilitative role to influence the way public and private market actors respond to the barriers found in selected agricultural markets and then catalyse efforts that improve coordination and investment. It should be noted that the Trust was also established as a long-term facility that would address the challenges that other programmes had not been able to address sustainably. Thus, its existence stimulates the market systems to open up opportunities for smallholder farmers and SMEs in selected value chains.

What are AMDT’s value chains and priorities for the agricultural sector?

AMDT’s value chain selection is merely an entry point. And the entry is guided by several indicators and frameworks. These include the existence of systemic challenges that need to be addressed. Primary to this is the anticipated number of people (productive poor) who may be involved or benefit from any of the interventions that our resources will benefit.

We are currently intervening in three value chain crops. These value chains are sunflower, maize and pulses. Other priority activities include improvement of the business enabling environment by supporting evidence-based policy and advocacy initiatives and women and youth integration which must be embedded across all our portfolio of interventions.

What is the fundamental difference between your Market Systems approach and other value chain development methodologies?

In simple terms, a market systems approach looks beyond engaging particular actors within the value chain, and opens up rewarding participation of the productive poor into the system as actors. This approach looks at large scale impact with sustainable results. On the other hand, value chain development interventions are more often focused in the how to improve the value of commodities at all levels without necessarily making emphasis on productive poor participation nor large scale and sustainable impact.

In today’s Tanzania, how can poor people in rural areas be convinced to work in agriculture, instead of say, strive for white collar jobs in big cities?

The best way to get the poor women, men and youth in rural areas involved in agriculture is through addressing their most critical challenges in their farming enterprises. This is to say by addressing binding constraints such as availability and timely access to yield-enhancing inputs, addressing the output market challenges, and leveraging access to finances sustainably.

You have several offerings and solutions for farmers. Kindly explain how they work.

The programme does provide opportunities to smallholder farmers through its co-facilitators and market actors. Our solutions and offerings are based on the exact systemic constraints that, if addressed, then the system would freely work for the smallholder farmers. Solutions could be in facilitating access to affordable agricultural finances – in this way producers then can access inputs loans, insurance packages, market, farm labour including labour saving and women friendly technologies to mention but a few.

What other projects are you currently undertaking? What future projects are you planning?

The programme is currently implementing a number of projects with its key partners including the market facilitators (co–facilitators in about seven regions. We have two ongoing projects in maize value chains, five projects in sunflower value chains, and three projects in pulses value chain. Other strategic projects are with the Ministry of Agriculture and they revolve around facilitating access to affordable high yielding sunflower seed varieties, an intervention we work with TARI Ilonga and Capacity Enhancement of Public Extension Services, in which we work directly with the Ministry of Agriculture, in particular the Directorate of Training, Extension Services and Research.

Our future projects are determined by our results management systems, which is compatible with the globally accepted Donor Committee for Enterprise Development (DCED) Standard for Results Measurement. This in – house results-based monitoring system helps us determine the projects which can be scaled out from the pilot, replicated, and the ones that can operate without our support. But also, the future demands of the country’s help to determine our next course of the projects.

What challenges are you currently facing?

The main challenge for the programme for now is that its Phase I comes to an end this month (June 2022). Therefore, the real challenge is the financing of the programme for Phase II. To address this challenge, the Senior Leadership Team together with other governing bodies including the Programme Investment Committee (PIC), which includes the funders is working on the strategy to get other funders onboard. Internally, we are also improving our systems and processes to make the programme more mature and take more roles.

What is AMDT’s source of funds?

Agricultural Markets Development Trust was established with a basket pool funds from its founders (Denmark, Switzerland, Ireland and Sweden) based on bilateral agreement with the government of Tanzania. Phase I of the programme comes to an end this month and plans are underway to work with the current development partners and other new funders to pave the way for its second phase which is expected to run from July 2022 to July 2027.

If you are only a facilitator, then who does the work on the ground and how do you identify them?

AMDT as a Trust was meant to be the market facilitator and works with the co–facilitators (market facilitators), market actors and government to bring about the desired changes in the market systems that we choose to intervene. Underneath this reality is that the market facilitators and co-facilitators are not the actors in the market ecosystems that we intervene. Therefore, the actual work on the ground is implemented by the market actors and the smallholder productive farmers. Our role is to facilitate the relationship between economic agents and hence create businesses among them. In terms of identification of these co facilitators, we run competitive processes as per the requirements of our laid down policies and based on international best practices. The responsibility for the identification of the market actors is vested to the co–facilitators. Our work with the government is often based on consultations between the ministry/agency and the Trust on a case-by-case basis.

What do you consider to be the major achievements so far?

Agricultural Markets Development Trust boasts to be the key strategic ally in the agricultural sector in the country. Since our establishment, we have first facilitated introduction of sunflower hybrid seeds in the country in collaboration with our partners such as Quality Food Products Ltd and Sunflower Development Company (SDC). Secondly, we have facilitated and promoted the pro poor contractual arrangements between processors and smallholder farmers in sunflower, maize, and pulses value chains. And thirdly, we have closely collaborated with the ministry of agriculture to undertake initiatives of importance to the country including ambitiously undertaking large initiatives to support TARI Ilonga with multiplication and production of improved foundation and basic sunflower seeds by integrating local seed companies and supporting the ministry of agriculture to enhance the quality of public extension services by funding the costs for a re-training programme for extension officers in 46 district councils in 14 regions reaching 1,350 extension officers.