Agriculture and Rural Development

The agricultural and development sector is the foundation of the Tanzania economy, accounting for 45% of total gross domestic product (GDP) and over 70% of exports by value in Smallholder farmers (about 4.5 million farm families) produce about 55% of total agricultural output and over 80% of the value of marketed cereals. The smallholder farmers are the major producers of maize, sorghum, millet, cassava, rice, plantains and pulses, as well as cash crops like coffee, cotton, tobacco and cashew

Both the private and public sectors are involved in estates agriculture, but the private sector is dominant in tea, sisal and tobacco, while government estates are significant producers of rice, wheat, sisal, sugar and beef. The proportion of the population that depend on agriculture as a source of livelihood is estimated at about 78%, which is a slight reduction from about 83% in 1990.

The economic reforms of the past two decades have impacted on the agricultural sector growth, which during the 1970s had declined to less than 1% per annum. By creating and enhancing producer and other market related incentives, the reforms led to accelerated agricultural growth from 1% during to 3% during , to 3.2% during , and to an average of 4% up to the turn of the millennium. Agricultural exports also expanded as export crop production expanded, from just 1.8% during the 1980s to 7.7% during the 1990s.

Government’s National Agriculture and Rural Development Sector Strategy Tanzania’s agriculture and rural development sector policies and strategies have evolved overtime with the changes in the political and macro-economic policy environments. This evolutionary process can be broadly divided into three periods

(a) from the mid 1960s to the mid 1980s, (b) from the mid 1980s to the mid 1990s, and (c) from the mid 1990s to the present time (December 2004).

From the mid 1960s to the mid 1980s Tanzania pursued policies towards “African Socialism”, enshrined in the 1967 Arusha Declaration, which put great emphasis on fighting poverty, ignorance and disease. The cornerstone of the policy was the UJAAMA village – a rural agriculture collectivization programme aimed at modernization of the agricultural sector and making social services more accessible to the rural dwellers3. The policy initially encouraged progressive farmers to expand with the hope that others would follow their example, but it turned out that only the few who were recipients of state funds benefited and there was little impact on reducing rural poverty.

While the UJAAMA policy had some positive impacts, especially in the political and social spheres4, it had failed in the economic sphere. The policy down-played the role of the private sector and of the individuals in economic production and trade since its ideological orientation was towards state controls and common ownership of productive resources. The result was a build-up of disincentives among producers which led subsequently to declining outputs and productivity in all sectors of the economy

The process of economic reforms and liberalisation began in 1986 only after the GOT had become convinced that economic recovery could only come about with changes in economic management, namely the lifting of controls and allowing free play to the incentives structure in order to remove distortions. Significant policy shifts were therefore ushered during this period with the launching of the Economic Recovery Programme (ERP), which introduced reforms aimed at creating a competitive environment for agriculture, industry and trade

From the mid 1990s until the present time (end 2004), Tanzania has achieved a significant improvement in macro-economic performance. GDP growth has averaged 5.3% over the past five years (reaching 6.2% in 2002 and 5.6% in 2003) and inflation has fallen to within single digits. Donor confidence, which had waned during the early to the mid 1990s, and saw the reduction or suspension of some aid flows, was restored with the signing of the Enhanced Structural Adjustment Facility (ESAF) with the IMF in 1996, and opened the door for inflows of aid and investments.