Nane Nane: Moving from proto to real exhibitions
Tanzania marks the farmers’ day popularly known as Nanenane on the 8th of August each year. It is normally marked in various zones, regions and districts in ‘Nanenane’ grounds. Ideally, exhibitions of cutting edge agricultural technologies, ideas and products should dominate. Observations in the recent past have shown however that the exhibitions are not doing exactly that. Sale of items that have nothing to do with agro-products is more of a norm than exception today. The actual agricultural crops and animals that are exhibited are normally among the best ‘proto types’ that one can find. They are produced and raised in optimal conditions. The challenges that most farmers – especially smallholder ones – get is practicing in the ‘real world’ what they see in the exhibitions. This is due to some economic constraints as outlined in this piece.
Optimal production functions
Most of the agricultural products in exhibition grounds are produced under optimal agronomical conditions. They are earmarked for exhibitions well ahead of the exhibition days. They are normally produced using all the required factors of production in the best ways. Some are produced by research institutions under very careful attention. The aim is to show the production possibility frontiers when all factor inputs are adequately made available. They are produced under controlled conditions.
Normally such productions are done in small scale and are easily manageable and affordable. No wonder then that crops and animals as well as their products in exhibition grounds are admired and envied by many. This is because of production of proto-types under optimal conditions. Crops might be grown in tested and treated soil with balanced acidity and alkalinity levels as well as all nutrients made available. Similarly for animals, they get all the necessary treatments. Partly producing under optimal conditions is possible because of small scale nature of such productions that make inputs manageable economically. The challenge is transferring all these very admirable proto types to real types in real farms in larger scales.
Economies of scale
For farmers to benefit from what they learn in agricultural exhibitions, they have to scale up the prototypes and models produced under optimal and controlled conditions. Those who are able to do that are likely to enjoy economies of scale and value for money for participating in exhibitions. Economically economies of scale are the advantages associated with large scale production.
These include but are not limited to managerial, financial, commercial, technological and other kinds of economies of scale. Producing at large scale for example enables quantity discounts from large scale purchase of most factor inputs such as seeds, fertilizer and pesticides. This leads to reduces per unit cost of production. All the advantages of large scale production are known. However, very few farmers are able to scale up what is seen and learnt at agricultural exhibitions in Nanenane grounds and beyond in their real farms. The key constrain and therefore a limiting factor is the cost of adopting new and cutting edge technologies as well as the costs of scaling up especially for most smalls scale farmers.
Costs of scaling up
Scaling up what is exhibited at agricultural show grounds is costly especially for commercial farming. Among the cost drivers in scaling up include the costs of all factors of production. Standard economics text book would list land, labour, capital and entrepreneurship as typical factors of production. For most farmers the constraining and limiting factor of production tends to be capital. An agro-entrepreneur may have land and labour but capital becomes the missing link. That is where the role of agro-financing in various ways including agricultural banks come-in. Capital in pecuniary (monetary) terms is important for farm preparations, buying all inputs such as seeds, fertilizer and pesticides; buying or hiring all the needed equipment such as tractors, planters, irrigation systems and much more along that line. Therefore without fixing what is broken in the agricultural scaling up equation in the context of this piece, each Nanenane exhibition will be just another event that does not push agricultural frontiers ahead.
Fixing scaling up equation
Given the line of thinking above, the missing link that needs to be fixed in the agro-scaling up equation is by and large capital in the shape of finance. There are many agro-entrepreneurs out there with plenty of land and huge labour reserve. Capital tends to be the missing link. It is very unfortunate that some orthodox thinking financial institutions are very risk averse when it comes to funding agriculture. They have very low risk appetite in this sector. This is partly understood due to the common reasons including rain-dependent agriculture, huge post-harvest losses, market and price volatilities etc.
However, there are many ways of de-risking these seemingly high agro-risks.
Agricultural insurance, long term financing, contract farming, forward delivering contracts, market linkages and many more are among the available tools to fix what is broken in funding agriculture. One hopes that various interventions including those by Tanzania Agricultural Development Bank and NMB’s agric-financing move among others will take the lead in fixing the broken equation thereby making it possible to move what the prototypes we see in Nanenane exhibitions to real types in real farms. Short of that, Nanenane will not be the change maker that brings the transformation we want.
