"Investing in Agriculture in Tanzania Opportunities and Challenges"
Investing in Agriculture in Tanzania: Opportunities and Challenges Andrew E. Temu Chairman PASS Trust Outline 1. Tanzania’s Agricultural Potential 2. Is FDI in Tanzania Agriculture a Possibility? 3. Opportunities and Possibilities - A cross section of potential Agricultural Sub-sectors 4. Likely Challenges and Possible Ways Out 1 Tanzania’s Agricultural Potential 1. Large un-tapped arable land area: 2. Available: High potential irrigable land 3. Broad diversity of agro-ecologies  4. Well placed for international and regional markets 5. High Comparative and Very Low Competitive Advantages 2 Is FDI in Tanzania’s Agriculture Possible? Yes, There are successful examples COMMODITY | INVESTMENT | COMPANY | COUNTRY SUGAR | PRODUCTION | ILOVO | S/ AFRICA PYRETHRUM | PROCESSING | Int.Chem Prod | USA FLOWERS | PROD/EXPORT | SEVERAL | E.g. NETHERLANDS SPICES | PROD/PROCESS | KIMANGO | GERMANY COTTON | GINNERY | CARGIL/NIPHA | KENYA/ASIA 3 Options amongst Opportunities: Food, Fiber or Fuel ? Recommended: Agro-Food Industry Medium Medium Food: Grains & Legumes Traditional Traditional exports: Coffee, Tea Agriculture High Low Livestock: Beef & Dairy Fishery 4 Recommended: Agro-Food Industry High High Horticulture Agro-processing Non- Traditional Agriculture Medium High Low Aquaculture HVP: E.g. SPICES 5 Alternative Nodes: A Need to Strike a Good Balance Examples Fertilizer production from natural gas Tanzania exports raw cotton, cashew nut, tea, coffee etc 6 Ways to Contend with Possible Challenges Bureaucracy, By-Laws , Standards, Land Tenure etc Opt for : • The Tanzania Investment Centre, EPZs and SEZ • Joint Ventures with reputable local firms • A ‘Partner in Development’ attitude – Assume ‘Corporate Social Responsibility’ in improving the business environment • Make use of local professional organisations – PASS Trust, 7 Private Agriculture Sector Support (PASS) Trust A joint GoT and Danida Innovation Your Potential Partner in Investment Appraisal PASS’s Products and Services: 1. Business Development service 2. Financial Services: Linking with Banks 3. Credit Guarantee 4. Farmer organization: Contract Farming 5. A combination of the above Business plans submitted and approved Tshs (billion) 30 Business plans 25 US$ submitted Tshs (billion) 17mn 20 Business plans approved Tshs (billion) 15 10 5 0 2007 Year 2002/03 2004 2005 2006 2007 2008 Results and Impacts Crop Before After 2003 2007 SUGARCANE 10MT/ha 40-60MT/ha Results and Impacts Crop Before: 2003 After: 2007 Coffee 2kg/tree 6 kg/tree Results and Impacts Crop Before: 2003 After: 2007 Laying Percentage Poultry 50% 75% Results and Impacts Crop TZ’s Averages PASS: Beneficiaries DAIRY 3-5lt.day 8-9lt/day PASS Trust Tanzania Areas of Prepared Business Plans Jan-Sep 2007 Tractor & Farm Processors Agricultural trading equipment 7% 3% Hire purchase 8% 6% Livestock production 10% Horticulture THANK YOU FOR THE ATTENTION 1% Crop production 65%