agriculture lab - agriprofocus · 2014-10-29 · farming deals for paddy and sugarcane 1 78...

National Key Result Area (NKRA)

Agriculture Lab

1

Commercial farming

Smallholder aggregation

25 Commercial

farming deals for paddy and sugarcane

1

78 Professionally

managed collective rice irrigation and marketing schemes

2

275 Collective

warehouse based marketing schemes “COWABAMA”

3

2

There are very few large scale-farms in Tanzania today, concentrated in

a few regions

Mara

Tanga

Lindi

MtwaraRuvuma

IringaMorogoro

Pwani

Dodoma

Singida

Rukwa

Mbeya

KigomaTabora

Shinyanga

Kagera

Manyara

Dar Es Salaam

Zanzibar

Kilimanjaro

ArushaMwanza

▪ Kagera Sugar

Company

(12,000 ha)

▪ T.P.C Estate

(7,600 ha)

11

Large-scale commercial farm above 4,000 hectares

▪ Mtibwa Sugar

Estate

(7,500 ha)

▪ Kilombero

Sugar(K1)

(5,000 ha)

▪ Kilombero

Sugar(K2)

(5,000 ha)

▪ Kilombero

Plantation

(4,000 ha)

3

The business environment is not attractive for investors

Land

The process

to obtain land

title and

derivative rights

is cumbersome

and not well

communicated

to investors

We have been

here for 7 years,

and still do not

have the land

title

Infrastructure

There are no access

roads to the farm

We have to build

irrigation infra-

structure not only

for ourselves but

also for our

outgrowers

Policy and governance

The government decided to allow the import of

120,000 tonnes of tariff-free rice, as a result,

the price of rice has dropped, and this might

put us out of business

The government need to honor the contract

that they sign- they did not renew the

incentives they promised

We were supposed to have water rights for 20

years, but now we are being told that it

expires in 5 years

We have to work with so many different

government departments and no one feels

accountable to ensure that due processes are

adhered to

11

There is no reliable

power supply

The cess tax is a huge disincentive for

investment and smallholders alike

4

25 commercial farming deals for paddy and sugar have been identified11

1 Bagomoyo site not included in list as deal is close to being complete

Pilot sites

Mara

Tanga

Lindi

MtwaraRuvuma

IringaMorogoro

Pwani

Dodoma

Singida

Rukwa

Mbeya

KigomaTabora

Shinyanga

Kagera

Manyara

Dar Es

Salaam

Zanzibar

Kilimanjaro

ArushaMwanza

A

B

C

D

F

G

H

I

J

K

Districts identified for commercial paddy and sugarcane Land size of nucleus farmCropSite

Site No

Land size of smallholder District

SugarcaneKumsenga/Kibwie3 20,000 5,000

SugarcaneKiberege4 20,000 10,000

PaddyKihansi,5 5,200 8,000

Paddy6 5,128 16,203

SugarcaneRuipa7 13,000 6,500

PaddyKisegese8 10,000 15,188

SugarcaneManda9 20,000 5,000

SugarcaneKisaki10 20,000 10,000

SugarcaneMkulazi11 50,000 25,000

SugarcaneMkulazi12 50,000 25,000

SugarcaneMvuha13 20,000 10,000

SugarcaneMahurungu14 3,000 2,000

SugarcaneIkongo15 12,000 3,000

SugarcanePangani16 3,200 1,200

PaddyLukulilo 8,000 4,000

SugarcaneMkongo18 22,000 7,000

SugarcaneMuhoro

17

19 20,000 16,000

PaddyRufiji Delta20 5,000 13,500

SugarcaneTawi/Utunge21 20,000 5,000

PaddyItete22 10,000 30,000

PaddyKilosa kwa mpepo23 5,000 18,000

PaddyMisegese24 5,000 15,000

PaddyNgohelanga25 6,000 15,000

SugarcaneKitengule1 16,000 2,000

SugarcaneKasulu2 20,000 2,000Kasulu

Kibondo

Kilombero

Ludewa

Morogoro

Mtwara

Musoma

Pangani

Rufiji

Ulanga

KaragweA

B

C

D

E

F

G

H

I

J

K

E

Mpanga-Ngalimila

5

However, there are a number of bottlenecks in the pipeline and most

sites are stuck due to issues with acquiring land title11

The deal pipeline

1

2

3

4

5

6

7

8

9

10

15

Acquire land title

Environ-mental impact assessment

Buildinfrastructure

Engage outgrowers

Begin farming

Obtain permits (e.gwater permit, business license)

Obtain agreements (e.g. PPA, implementation agreement)

1 Bagomoyo site not included in list of 25 sites as deal is close to being complete, but investors are currently

being held back due to issues relating to agreements

11

12

13

14

16

17

18

19

20

21

22

23

24

25

B1

Only Mukulazi site has land title

6

Access to land and an enabling business environment are needed to

ensure investments into 25 sites11

▪ A temporary cross-agency team to accelerate

securing land title, building infrastructure and

conducting agro-ecological studies for 25 land

parcels

Create a Special Lands and Infrastructure Task Force

i

▪ Conduct “pre engagement” training to

educate communities on business, good

agriculture practices and farmer organization

Conduct community engagement

ii

Action Description Result

▪ Create standard meritocracy assessment criteria to award sites to investors

▪ Create prototype Term Sheet including

“investment incentive package”, terms and

conditions and KPIs

Develop standard tender assessment criteria and Term Sheet

iii

▪ Dedicated unit within TIC responsible for

attracting investors, coordinating applications,

addressing complains and monitoring

compliance

Uplift mandate of TIC and Investor Complain Bureau

iv

Together with selected interventions – ensuring availability of rice seed and developing

industry associations – we believe that 25 deals can be pushed through the pipeline by 2015

▪ 25 sites ready for investment

▪ CCROs for smallholders

▪ Communities readyfor engagement with investors

▪ 25 high quality commercial agriculture investors

▪ Efficient “one stop center” for investors, and avenue to address investor issues

7

The Special Land and Infrastructure Task Force will be a

cross-agency bodyi

Chairperson: PMO

Members:

▪ MAFC

▪ MLHHSD

▪ Min of Works

▪ Min of Water

▪ Min of Finance

▪ Min of Energy and Minerals

▪ Min of Industry Trade and Marketing

▪ POPC

▪ NEMC

▪ TIC

▪ RUBADA

▪ National Land Use Planning Commission

▪ SAGCOT

▪ Sugar Board of Tanzania

Organization of the Task Force

Oversight: PDB

Working model

▪ Task Force will break cross-agency silos by ensuring that the right people are in the room at the same time

▪ Scheduled to be in operation to Jan 2015, when construction of “to-farm” infrastructure for the last 5 sites commences

▪ Appointment letter will be sent to relevant Directors, Commissioners, and Director Generals, who will appoint individuals from their organization/unit to the Task Force

▪ Consist of both permanent (to Jan 2015) and temporary members

▪ Most members will be seconded to the Task Force from their relevant agencies on a part-time basis (exact number of days per week TBD)

▪ Incentives to ensure attendance to be reviewed

8

The mandate of the Task Force will be to secure titles and build

infrastructure and ensure environmental suitabilityi

Mandate of the Task Force

▪ Ensure consistency of boundaries in map of different agencies▪ Conduct community engagement and inform them of development plans▪ Conduct reconnaissance and agriculture survey to identify and demarcate land

for investment▪ Gazette area to change status of land from village land to general land ▪ Conduct compensation and resettlement▪ Titling of land

Secure land title

▪ Determine infrastructure needs and plan for "to farm" infrastructure development (access roads, electricity, bridges)

▪ Finalize budget needed for infrastructure development▪ Syndicate infrastructure plans with DPs and determine potential areas for

collaboration▪ Tendering process for the construction of infrastructure▪ Oversee construction of infrastructure

Build infrastructure

Ensure soil and water suitability

▪ Conduct soil survey and develop detailed land management plans▪ Establish mechanism (e.g. virtual library) to share relevant soil and water data ▪ Model environmental impact based on existing data▪ Generate necessary environment information (SEA and/or IEA) for investment ▪ Develop monitoring and reporting mechanism to ensure environmental

compliance

9

There will be at least 4 visits to each site, prior to investors coming

in, to ensure sufficient community engagementiiii

Visit no. Purpose of visit Length of visit Team conducting visit

▪ Meet with District Council and Village Assembly to inform them of investment plans

▪ Reconnaissance survey to confirm availability of land and infrastructure needs

8 days ▪ Subset of Task Force

▪ Verification of Land Use Plans▪ Community consultant on Customary

Certificate of Right of Occupancy▪ Demarcate site and erect beacons

7 days ▪ Subset of Task Force▪ Technical team

Conduct▪ Soil survey▪ Environmental analysis▪ Social analysis▪ Training needs assessment

14 days ▪ Soil survey team▪ Environmental

analysis team▪ Social analysis team▪ Training needs team

“Pre-engagement” training on the issues of ▪ Environmental sustainability▪ Conducting businesses▪ Farmer organization▪ Good agriculture practices

16 days ▪ Consultant team

1

2

3

4

Additional visit to conduct other activities (e.g. compensation and resettlement) will take

place as necessary

10

A standardized proposal evaluation criteria, Term Sheet and M&E

process will be developed to expedite investments

iiiiiiSteps with planned

changes

Description ▪ Existing TIC process

for advertising and

tendering sites for

investment will be

used for the 25 sites

▪ New set of

assessment criteria,

in a detailed

scorecard including:

– Company

background

– Economic value

of project

– Level of technical

sophistication of

project

– Community

involvement plans

– Provision of

smallholder

financing

▪ Includes detailed

sets of

responsibilities for

both the

government (e.g.

provide titled land,

provide stable

policy environment

etc.) and the

investor (e.g.

capital investment,

build on farm

infrastructure, aid in

M&E etc.)

▪ Company to submit

report every 3

months

▪ TIC and MAFC to

conduct site survey

every 3 months to

ensure

implementation of

project is going

according to plan

▪ Strict sanctions and

penalties for non-

compliance

Agency in

charge▪ TIC ▪ TIC ▪ TIC, NISC ▪ TIC & MAFC

No. of days

in step

▪ 30 days ▪ 6 days ▪ 4 days ▪ Every 3 months

Tender sites for

investors to bid on

Assess proposals

and award tender

Sign Term Sheet

and additional

incentives

Monitoring and

evaluation of

project

New TIC process to tendering and awarding sites, using best practice timeframes

11

Drafts of list of target investors, assessment criteria, term sheet, and

M&E criteria have been developed in the labiiiiii

Assess proposals and award tender

Tender sites for investors to bid on

Sign Term Sheet and additional incentives

Monitoring and evaluation of project

▪ Detailed scorecard to assess applications of potential investors, with weighted scores for each criteria

▪ Prioritized list of both international and local potential investors to send invitations and notifications of tender announcements to

▪ List of responsibilities of both government and investors to be detailed out by relevant agencies and approved by NISC

▪ Draft criteria to be assessed in M&Eprocesses, based on assessment scorecard

▪ To be finalized by a consultant

Screen shots

Description

12

Drafts of the assessment criteria, Term Sheet and M&E have been

developed, and will be finalized after syndication with stakeholders

Responsibilities of the government Responsibilities of the investor

▪ Facilitate acquisition of tilted land and Land for Equity deal (i.e. Acquire 20% shares in the project for subsequent sale to the public, and oversee acquisition by out-growers of a further 5% shares)

▪ Aid in community engagement. e.g. Create community awareness; Facilitate conducive environment for compensation and resettlement; Support EIA for out-grower schemes; Facilitate establishment of farmers’ organizations; Provide funds for community engagement

▪ Facilitate the procurement of required permits/approvals. e.g. Company Registration; Residence permits class A & B for a restricted number of staff

▪ Issue incentives. e.g. Exemption of import duties during project implementation, corporate tax exemption, withholding tax on dividends (dependent on merit of project)

▪ Monitor implementation of investor’s Business Plan

▪ Provide a stable policy environment, including ensuring transparency on import and export permits or market liberalization policies; Coordinate discussion forums regularly

▪ Provide investment capital, including injecting equity of not less than 30% of total project cost

▪ Develop on-farm infrastructure e.g. irrigation facilities, roads

▪ Provide suitable technology, management and trained manpower

▪ Adhere to laws and regulations. e.g. Pay land rent annually as stipulated; Carry out Environmental Impact Assessment/Strategic Environmental Assessment

▪ Conduct responsible community engagement. e.g. Provide community support to out-grower schemes (inputs, extension services, technology transfer); Prepare and implement a program for skills transfer/training of Tanzanians; Abide by all obligations under out-grower or contract farming

▪ Aid in M&E e.g. Provide periodic implementation reports to the government; Submit audited final accounts to TIC or any other relevant authority

Summary of draft Term Sheet

iiiiii

Steps to finalize Term Sheet

Send draft term sheet to relevant agencies (TIC, TRA, TPSF, MOF, Agriculture Council of Tanzania, SAGCOT center, RUBADA)

Conduct workshop to gather feedback on Term Sheet

Modify Term Sheet based on feedback

Send Term Sheet to NISCTechnical Committee

Finalize Term Sheet based on Technical Committee feedback

NISC to give final approval on Term Sheet

Term Sheet example

13

Current bodies need to be improved in order to facilitate

investments

iviv

TO…Proposed changes

Investors Complaint Bureau

FROM…Current mandate

▪ Bureau disciplined to meet monthly ▪ Meets on an ad hoc basis, subject to the Prime Minister’s availability

▪ Implement online tracking system to show complains that need to be addressed and how long they have been in the pipeline

▪ No transparency on complaints in the pipeline that needs to be addressed

▪ No mandate to grant approvals or oversee applications in line ministries

▪ Unit implements online tracking system with line ministries to show where applications are sitting, relevant person in charge and how long application has been pending

▪ A facilitation body that assists investors in necessary applications

Tanzania Investment Centre

▪ Dedicated unit, overseen by PDB, to receive and take ownership of all applications (forwards them to line ministries and ensures that applications are processed in due time)

▪ Current “14 day system” that automatically grants approval if line ministries do not respond within 14 days is not enforced

▪ Automatically raises issues to Investors Complain Bureau if applications have taken longer than allocated time

▪ Raises other complaints e.g. sudden policy changes, to Investors Complain Bureau

14

The Agriculture Lab already accelerated initiatives to close the

Bagamoyo Eco-Energy project11

Large scale iconic project in Tanzania,

with high potential impact

▪ Production of 150,000T of sugar,

11,000cbm ethanol and 32MW

electricity ▪ 2,300 direct jobs, 10,000 indirect jobs

▪ 2,000 outgrowers producing about 300-

400tonnes of sugar

At risk because of bureaucracy and Government inefficiency

The lab used a “pressure cooker” to resolve issues

Ensured AG Chambers provided immediate feedback on Land lease and Right of Occupancy

Negotiated water rights from 5 years to 30 years on behalf of Investor

Part of working group to accelerate Implementation and Shareholder’s Agreement

Raised issue to the President to increase pressure and awareness

15

The development of the rice and sugar industries require increasing

the availability of rice seeds, and developing industry associations

▪ Lack of coordination amongst

the players in the rice and

sugarcane value chain,

leading to weak lobbying

power and industry

representation

▪ Work with existing stakeholders

(e.g. TARIPA) to facilitate players in

the industry to develop rice and

sugar associations

▪ Lack of good quality rice

seeds suitable for Tanzania to

meet commercial and

smallholder farm targets

▪ Private sector players have

lack of incentive to produce

rice seeds due to seed saving

practices

▪ MAFC to engage the Agriculture

Seed Agency (ASA) and private

seed companies to produce

certified seeds

▪ Creation of the “Rice Seed Sub-

Fund” under the Input Fund to

provide soft loans to rice seed

companies

SolutionsIssues

11

16

Commercial rice production will allow Tanzania to be a large exporter

of rice

0.3

0.8

1.7

1.2

4.3

1.0

1.8

1.5

BAU

increase

Total 2015

consumption

Total 2015

production

BRN

production

2020

consumption

+3.1

+0.9

2020

production

BRN

production

BAU

increase

2012

production

Assumptions:

▪ Constant growth rate of 4% CAGR for consumption and 7% for BAU production, based on historical growth rates;

▪ 1st year of harvest: 2 ton/ha for outgrowers, 4 ton/ha for nucleus farm, 50% of outgrower area in production, 40% of nuclear are in production

▪ 2nd year of harvest: 3 ton/ha for outgrowers, 5 ton/ha for nucleus farm, 60% of outgrower area in production, 70% of nuclear are in production

▪ 3rd year of harvest: 4 ton/ha for outgrowers, 6 ton/ha for nucleus farm, 70% of outgrower area in production, 90% of nuclear are in production

▪ 4th year of harvest: 6 ton/ha for outgrowers, 8 ton/ha for nucleus farm, 80% of outgrower area in production, 100% of nuclear are in production


▪ 6th year of harvest onwards: 10 ton/ha for outgrowers, 4 ton/ha for nucleus farm, 50% of outgrower area in production, 100% of nuclear are in production

ESTIMATES

11Production from BRN projects

Production and consumption of rice, Million tons

▪ Export of rice could more than triple from 0.9 million MT to 3.1 million MT from 2015 to 2020

17

Production and consumption of sugar, Million tons

▪ Export of rice could more than triple from 0.9 million MT to 3.1 million MT from 2015 to 2020

Commercial sugarcane production will allow Tanzania to be a large

exporter of sugar11

0.3

3.8

0.7

4.6

0.60.50.3

2020

production

2020

consumption

+3.9

-0.1

BRN

production

Total 2015

production

BRN

production

0.2

BAU

increase

0.1

2012

production

BAU

increase

Total 2015

consumption

▪ Tanzania could move from a net importer to a large net exporter of sugar, supplying close to 4 million MT to the international market

ESTIMATESProduction from BRN projects

Assumptions:

▪ Constant growth rate of 4% CAGR for consumption and 7% for BAU production, based on historical growth rates;

▪ 1st year of harvest: 5 ton/ha for outgrowers, 8 ton/ha for nucleus farm, 50% of outgrower area in production, 40% of nuclear are in production

▪ 2nd year of harvest: 6 ton/ha for outgrowers, 9 ton/ha for nucleus farm, 60% of outgrower area in production, 70% of nuclear are in production

▪ 3rd year of harvest: 7 ton/ha for outgrowers, 10 ton/ha for nucleus farm, 70% of outgrower area in production, 90% of nuclear are in production



▪ 6th year of harvest onwards: 11 ton/ha for outgrowers, 11 ton/ha for nucleus farm, 50% of outgrower area in production, 100% of nuclear are in production

18

The implementation of commercial deals will take place in waves

Paddy

Sugar cane

Lessons from Wave 1 will be carried into Wave 2 and 3

No. of ha 33,000 45,000130,000

No. of deals 2 35

No. of tons (of which by 2015)

333,000

(46,000)

447,000

(0)

1,292,000

(0)

No. of ha 90,000 114,000185,000

No. of deals 3+11 75

No. of tons (of

which by 2015)

1,265,000

(150,00)

1,240,000

(0)

2,030,000

(0)

ESTIMATES

Wave 1 (pilot)Now – Apr 2014

Sites: Lukulilo, Mkongo, Mpanga-Ngalimila,

Muhoro, Tawi/Utunge, Bagamoyo

Wave 2Aug 2013 – Oct 2014

Sites: Kiberege, Kisaki, Misegese, Mvuha,

Ruipa, Itete, Kilosa kwa mpepo,

Kisegese, Mkulazi, Ngohelanga

Wave 3Dec 2013 – Apr 2015

Sites: Kihansi, Mahurungu, Mkulazi,

Pangani, Rufiji Delta, Ikongo, Kasulu,

Kitengule, Kumsenga/ Kibwie, Manda

1 Includes Bagamoyo site

19

Commercial farming


25 Commercial


1

78 Professionally


2

275 Collective


3

20

Existing irrigation schemes face a number of challenges resulting

in low yield and incomes for rice smallholders

� Poor availability

and access to

inputs by

smallholders

� Existence of poor

quality inputs in

the market

� Poor application

or use of inputs

� Little usage of

improved/high

yielding varieties

� Inadequate usage

of mechanisation

among

smallholder

farmers

� Poor or

unavailability of

storage facilities

� Poor processing

facilities

� Poor marketing

structure

� Unreliable outputs

markets

� Lack of

accountability for

underperformance

of government

officials

Key issues

Extension services

Land and infrastructure

Inputs Market

� Land mapping not

carried out for small

plots in selected

irrigated areas

� Inadequate funding for

smallholder irrigation

development

� Inadequate skills to

manage smallholder

irrigation schemes

� Underdevelopment of

irrigation potential

area with improved

irrigation infrastructure

� Underutilization of

irrigation land

� Low supervision

of crop

management at

scheme level

� Low knowledge of

rice management

of farmers and

extension officers

� Lack of transport

facilities to

extension officers

and irrigation

technicians

Yields and incomes are low

2

21

Structure of Irrigators Organisation (IO)

General Meeting

Executive Committee

Internal Auditor

Treasurer Secretary

Planning and Finance Sub-Committee

Agriculture & Environment Commitee

Construction Operation & Maintenance Commitee

Block leaderships

Private Service Provider

Technical Manager

Warehouse Operator

Extension Officer

Irrigation Technician

Technical Management TeamNew to structure

2

Technical Management Team

22

The private service provider will play a catalytic role in this model


Executive Committee (IO)

Technical Manager

Roles and responsibility▪ Build capacity of irrigators’ organization (IO) and smallholder

farmers to take over the management after 2 years. ▪ Provide various trainings related to leadership skills, financial

management, record keeping, agronomic skills, post-harvest handling, marketing etc

▪ Organise bulk purchase of inputs in collaboration with IO▪ Organise storage of paddy for collective marketing▪ Work together with IO to look for potential buyers▪ Link the IOs warehouses with the Commodity Exchange (COMEX).▪ Work with IO to identify and engage high grade processors for

better marketing▪ Identify and engage mechanization services▪ Recruit technical team, including Technical Manager, Extension

Officer, Irrigation Technician and Warehouse Operator ▪ Hire consultants, and other business development services (BDS)

providers to provide various business development services to the IO and all users of the scheme

▪ Conduct different studies/research work including market surveys, baseline surveys, inventory of warehouses and processing facilities in the target area

▪ Contact branding companies and Market Information Service providers

▪ Link IOs to financial institutions


Incentives required to perform▪ Timely payment

Performance managed by▪ Local Government Authority

Qualifications▪ At least 2 years experience working with small holder

farmers in Tanzanian environment▪ Must have technical capacity to cover at least one

district out of 8▪ Must have skills to organize smallholder farmers and

link them to markets

Relationship with other key stakeholders

2

23

4.1

3.6

4.2

4.3

3.9

3.9

3.4

4.2

Iringa R

Kilombero

Kilosa

Kyela

Mbarali

MorogoroR

MpandaDC

Mvomero

We have selected the following districts to pilot the smallholder

irrigation schemes for paddy

Smallholder paddy pilot districts

Mpanda

Mbarali

Kyela

Iringa Rural

Kilombero

Morogoro

Rural

MvomeroKilosa

11

8

8

2

35

4

7

3

Iringa R

Kilombero

Kilosa

Kyela

Mbarali

Morogoro R

Mpanda DC

Mvomero

Number of schemes Current yield (MT/ha)

2

24

There are a number of tasks that need to be carried out along the value

chain/by each stakeholder to enable this model to work

▪ MAFC to convene a 2 days awareness creation seminar on the model

to key stakeholders in 4 regions and 8 districts

▪ MAFC to conduct a one day seminar to each of the 8 districts

▪ LGA to sensitize targeted communities in 78 schemes

▪ LGA to establish and strengthen Irrigators Organisation (IO)

▪ Targeted 78 schemes to confirm and apply for the services

▪ MAFC to prepare TOR for private service provider and tender

documents for 78 schemes

▪ MAFC to advertise tender and shortlist private service providers to

implement the model

▪ MAFC & LGA to do joint recruitment of private service providers

▪ LGA to conduct orientation of private service providers on the model

and site possession

▪ Private service provider to provide services as per TOR

▪ Cabinet to resolve establishment of the Legal Framework for Irrigation

Development

▪ Ministries responsible for Irrigation and Civil Service to establish the

National Irrigation Commission for accelerated irrigation development

in Tanzania

Sensitization on the Model

1

Implementation of the Model

2

2

25



▪ National Land Use Planning Commission to develop Village Land Use

Plans in 78 schemes

▪ Ministry of Lands to establish registries for District and Village Land

Registries for 8 districts

▪ Ministry of Lands to provide equipment and materials for District and

Village Land Registries

▪ Ministry of Lands to prepare and issue CCROs to farmers in 78

schemes

▪ PMO-RALG to establish District Irrigation Development Department

(DID) at LGA

▪ DED to conduct baseline survey (social, soil, topo, water resource,

agronomy, economic, environmental studies)

▪ DED & ZIO to prepare tender document and advertise (construction

of irrigation infrastructure and IO office)

▪ DED and ZIO to recruit contractor for the construction/rehabilitation of

irrigation infrastructures and IO Office

▪ Contractor to construct/rehabilitate irrigation infrastructure and IO

Offices in 78 schemes

▪ Zonal Irrigation Office & LGA to supervise the construction of irrigation

infrastructure and IO Office

▪ District Council to prepare tender documents and sign contract for

construction/rehabilitation of warehouses

2

Land Use Planning and Titling

3

Construction of irrigation infrastructure, warehouses and farm roads

4

26



▪ District Council to recruit contractors for construction/rehabilitation of

warehouses in 78 schemes

▪ Contractor to construct/rehabilitate warehouses in 78 schemes

▪ Tanzania Building Agents to supervise construction of warehouses

▪ District Council to prepare tender documents for

rehabilitation/upgrading of farm roads

▪ District Council to recruit contractors to rehabilitate/upgrade farm

roads

▪ Contractor to rehabilitate/upgrade farm roads

▪ District Irrigation Engineer to supervise rehabilitation/upgrade of farm

roads

▪ Strengthening of LGA

▪ Strengthening of Zonal Irrigation Office

▪ Training institutions to retrain extension officers and irrigation

technicians in 78 schemes

▪ Extension officer/Input companies to establish farmers field school

▪ Training institutions to train lead farmers on GAP (Good Agricultural

Practices) - 5 farmers per scheme

▪ Lead farmers/Extension Officer to train farmers at scheme level

▪ Private service provider to provide transport logistics (motorbikes)

and working facilities to extension officer and irrigation technician in

78 schemes

2

Construction of irrigation infrastructure, warehouses and farm roads (cont.)

4

Capacity building of extension service providers

5

27



▪ Executive Committee (IO)/ Management to establish demand for inputs ▪ Seed companies to produce the selected improved seed for 78 schemes▪ Technical Manager and Executive Committee (IO) to identify, negotiate and

enter into procurement contract with input suppliers ▪ Technical Manager and Executive Committee (IO) to negotiate with LGA for

government input subsidy ▪ Technical Manager and Executive Committee (IO) to identify financial

institutions and conditions for loans▪ Technical Manager to facilitate negotiations between the financial

institutions and IO for loans▪ Technical Manager and Executive Committee (IO) to identify and contract

provider of mechanization services

▪ Private service provider to identify and prepare inventory of existing warehouses, owners and processing facilities

▪ Private service provider to conduct market survey▪ Executive Committee (IO) to sign contract with warehouse operator▪ Private service provider to procure basic warehouse equipment▪ Private service provider to recruit warehouse workers▪ Technical Manager to sign contract with processors and buyers▪ Private service provider to establish market information system▪ Technical Manager to identify and contract branding companies

2

Contracting input suppliers, mechanisationand financial institutions

6

Warehouses Management and Market Linkages

7

28



▪ Cabinet to resolve establishment of Commodity Exchange in

Tanzania and approve establishment of Commodity Exchange of

Tanzania secretariat under Ministry of Industry and Trade (MIT)

▪ Commodity Exchange of Tanzania secretariat to collect all studies on

COMEX including the Roadmap

▪ Commodity Exchange of Tanzania secretariat to prepare system

design

▪ Commodity Exchange of Tanzania secretariat to establish a trading

floor using consultants

▪ Rice to be among the commodities to be traded in Commodity

Exchange of Tanzania

▪ Service provider to link rice warehouses to Commodity Exchange

2

Establishment of commodity exchange and inclusion of rice as priority

8

29

By 2015, the lab aims to increase yield to 8MT/ha, impacting 60,000 ha

and 70,000 smallholder households2

Productivity

Income (TZS mil/ha)

2013

4MT/ha

2014

6MT/ha

2015

8MT/ha

2013

1.6

2014

2.2

2015

2.8

30

1 Based on ~80% commercialization rate for farmers

2 Based on recommended seed and fertilizer usage

▪ With the proposed

model, farmer’s income

is expected to increase

by 71% under optimum

condition

▪ In the case where

conditions may not be so

favourable, farmer can

still expect income

increase by 40% under

the proposed model

It is expected that smallholder farmers will have increased

income with the new approach

Current situation

Expected condition under proposed model

Cash profit (‘000 per ha): 2,760 2,248

Yield of ~8 tons per ha

~10% lower yield due to unforeseen circumstances

▪ Under the current

practices, a typical

smallholders in irrigated

area is earning cash

profit of TZS1.6 million

per ha

SOURCE: Team’s analysis

2

Yield (tons per ha): 4.0–

Marketed amount (tons per ha): 3.2X

Amount consumed

on-farm1 (tons per ha): 0.8–

Farm-gate price (‘000 TZS per ton): 800–

Cash revenue (‘000 TZS per ha): 2,560–

Cash profit (‘000 per ha): 1,610

Cash cost2 (‘000 per ha): 950–

Marketed amount (tons per ha): 6.4 5.8X

Yield (tons per ha): 8 7.2–

Amount consumed

on-farm1 (tons per ha): 1.6 1.4–

Farm-gate price (‘000 TZS per ton): 800 800–

Cash revenue (‘000 TZS per ha): 5,120 4,608–

Cash cost2 (‘000 per ha): 2,360 2,360–

RICE EXAMPLE

31

78 existing smallholder rice irrigation schemes will be impacted under

the new model, impacting 70,000 smallholder farmers over 60,000ha

4.1

3.6

4.2

4.3

3.9

3.9

3.4

4.2

Iringa R

Kilomb…

Kilosa

Kyela

Mbarali

Morog…

Mpand…

Mvom…

8 districts are selected for the first phase

Mpanda

Mbarali

Kyela

Iringa Rural

Kilombero

Morogoro

Rural

Mvomero Kilosa

11

8

8

2

35

4

7

3

Iringa R

Kilombero

Kilosa

Kyela

Mbarali

Morogoro R

Mpanda DC

Mvomero

Number of schemes Current yield (MT/ha)

Productivity

Smallholder income (TZS mil/ha)

2013

4MT/ha

2014

6MT/ha

2015

8MT/ha

2013

1.6

2014

2.2

2015

2.8

32

Proposed modelExisting structure

� Currently, IO is responsible for management of irrigation service

� Smallholder farmers operate individually and have poor linkages with other key stakeholders

The model will introduce a private service provider in each district to

manage the schemes while building Irrigator Organisations’ capacity over

the course of 2 years

Ministries, PMO-RALG and Local

Government Authority

Irrigators Organisation

(IO)

Smallholder farmers

Financial Institution

Input Supplier & Mechanisation

Buyers

Processor

Warehouse

� Private service provider will be hired to provide technical and management support to the IO

� IO will be facilitated by private service provider to be the aggregation medium linking farmers to the key stakeholders

Ministries, PMO-RALG and Local



(IO)

Smallholder farmers



Buyers

Processor

Warehouse


Change agent

33

The private service provider will play a catalytic role along the value chain


Technical Manager

Warehouse Operator

Extension Officer



� The private service provider is hired on annual contract, renewable depending on performance

� The private service provider will recruit technical managers, warehouse operators, irrigation technicians and extension officers to form the Technical Management Team that supports the IO

� Organizing bulk purchase of inputs in collaboration with IO

� Identify and engage mechanization services

� Link IOs to financial institutions

� Land tenure not secured in selected irrigated areas

� Prepare inventory of warehouses and processing facilities

� Organizing storage of paddy in a given warehouse for collective marketing

� Working with IO to identify and engage high grade processors for better marketing

� Conduct different studies/research work including market and baseline surveys

� Working together with IO to look for potential buyers

� Contact branding companies and Market Information Service providers

� Link the IOs warehouses with the Commodity Exchange (COMEX)

� Bringing best practices and introducing professional management to the IO� Provision of various trainings related to leadership skills, financial management,

record keeping, agronomic skills, post-harvest handling, marketing for IO to be able to take over the management independently after 2 years

� Hire consultants and other business development services (BDS) providers to provide various business development services to the IO and all users of the scheme

InputsExtension services

Extension services

Extension services

Capacity building of IO

34

For the model to work, some key activities have been identified

2013 2014 2015

Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Responsible

Private ServiceProvider

Private ServiceProvider

5) Capacity Building Of Extension ServiceProviders

ExecutiveCommittee (IO),Technical Manager

6) Contracting InputSuppliers, MechanisationAnd Financial Institutions

LGA4) Construction ofInfrastructure

7) WarehousesManagement AndMarket Linkages

Ministry ofIndustry and Trade

3) Land Use PlanningAnd Titiling

Key Activities

MAFC, LGA2) ImplementationOf Model

8) Inclusion OfRice In CommodityExchange

MAFC, LGA1) SensitisationOf Model

Ministry of Lands

35

Total budget required for the smallholder rice irrigation schemes to work

is TZS333.9 bil for 2013 – 2015

TZS252,756 mil TZS68,701 mil TZS12,435mil

16 749

8 8064 507

77 845

9 027

04 548 3 275 3 439

134 160

31 595

0

19 45415 997

4 489

0

20 000

40 000

60 000

80 000

100 000

120 000

140 000

160 000

2013 2014 2015

Bu

dg

et

req

uir

ed

(T

ZS

mil

)

Private sector

Public (DE)

Public (RE)

DP (DE)

DP (RE)

36

Overview

Recommendations

37

Charter - Smallholder model for rice

Objective

Rationale

▪ Demand for rice is increasing at national and regional levels. We seek to make

Tanzania a rice granary for the Eastern Africa region.

▪ For the first wave, we have prioritised the following areas based on selected criteria:

– Morogoro

– Mbeya

– Rukwa/Katavi

– Ruvuma

▪ Given the need for Big Results Now in the next two years, we focus on ongoing

irrigation initiatives with big government commitment i.e. SAGCOT areas

Key deliverables

i Lab charter – Case for change

ii Existing situation

iii Stakeholder mapping

iv Data gathering – comparison with best practices

vi Constraints – budget, human resources, environment

Expected impact (KPI and targets)

▪ Yield from 4 MT/ha to 8 MT/ha

▪ Smallholder income from TZS1.6mil/ha to

TZS2.7mil/ha

▪ Production from 240,000 MT to 480,000 MT

▪ 70,000 existing smallholder households impacted

▪ 60,000 hectares of area covered

Owner(s)

▪ Ministry of Agriculture, Food Security and

Cooperatives

▪ Prime Minister’s Office

▪ Local Government Authority

Funding and other support

▪ Government of Tanzania

▪ Development Partners

▪ Private Sector

Stakeholders / key syndication required

▪ Ministry of Agriculture, Food Security and

Cooperatives, Ministry of Land, Prime Minister’s

Office, Local Government Authorities

▪ Smallholder farmers/ organisations

▪ Development Partners

▪ NGO/ CBO/ Private sector

▪ Input suppliers

▪ Processors

▪ Buyers

▪ Financial institutions

vii Individual KPI

v Lab recommendation – 3 feet

To increase production, productivity and marketing for smallholder rice farmers in irrigation schemes

38

0

200 000

400 000

600 000

800 000

1 000 000

1 200 000

1 400 000

1 600 000

1 800 000

2010/11 2011/12 2012/13 2013/14 2014/15

Production (MT)

RiceProduction

Requirement

Self sufficiency

ratio

179%

138%

171%177%

182%

SOURCE: MAFC, Team’s projection

Rice in Tanzania is already self sufficient with projection that further

growth in rice production will be exported

39

Currently, there are several major programmes impacting the paddy crop

in Tanzania (1/2)

Existing programme Description Owner Area Cost

Policy and human resource programme

Japanese grant Ministry of Agriculture, Food Security and Cooperatives

7 in SAGCOT area and 13 in other regions

USD 15,000,000

Eastern Africa Agriculture Productivity Programme (EAAPP)

East African Regional Programme to support Research Technological Development

ASARECA All regions of Tanzania in the rice subsector

USD 4,000,000

Accelerated Food Security Programme

Input subsidy Ministry of Agriculture, Food Security and Cooperatives

All regions of Tanzania in the rice subsector including SAGCOT area

USD 160,000,000

40

Ministry of Agriculture, Food Security and Cooperatives

Agriculture Council of Tanzania (Tanzania agricultural partnership programme)

Tanzania, IFAD1, AfDB2, AGRA

Owner

Currently, there are several major programmes impacting the paddy crop

in Tanzania (2/2)

All regions USD 61,800

50 Districts in Tanzania Mainland

USD 12,000,000

Whole of Tanzania

USD 150,000,000

1 International Fund for Agricultural Development (IFAD) aims to combat rural hunger and poverty in developing countries through low interest loans and

direct assistance 2 African Development Bank (AfDB) Group aims to spur sustainable economic development and social progress in its regional

member countries (RMCs), thus contributing to poverty reduction

Area Cost

District Irrigation Development Fund (DIDF/ASDP)

Tanzania Agriculture Partnership

Marketing Infrastructure, Value Addition and Rural Finance Support program (MIVARF)

Existing programme

Irrigation development at the LGA level

Stimulate agricultural growth in Tanzania through commercial oriented activities

Increase financing, development of market infrastructure and agro-processing

Description

41

Existing irrigation schemes are plagued with challenges along the value

chain resulting in low yield and income

� Poor access to

inputs by

smallholders

� Existence of poor

quality inputs in

the market

� Inadequate

availability and

distribution of

inputs

� Poor application

or use of inputs

� Little usage of

improved/high

yielding varieties

� Inadequate usage

of mechanisation

among

smallholder

farmers

� Poor or

unavailability of

storage facilities

� Poor processing

facilities

� Poor marketing

structure

� Unreliable outputs

markets

� Lack of

accountability for

government

officials for

underperformance

� Land tenure not

secured in selected

irrigated areas

� Inadequate

investment in


development

� Ineffective

management of


schemes

� Underdevelopment of

irrigation potential

area with improved

irrigation infrastructure

� Underutilization of

irrigation land

� Low supervision

of crop

management at

scheme level

� Low knowledge of

rice management

of farmers and

extension officers

� Lack of transport

facilities to

extension officers

and irrigation

technicians

Key issues

Extension services


Inputs Market

Yields and incomes are low

42

Key issues along the value chain Land and infrastructure

Extension services

Inputs Market

Issue Challenges Recommendation Stakeholder

Land tenure not secured in selected irrigated areas

� To prepare land use plans for villages

with irrigation schemes

� Mapping rice fields and issuing CCROs

to individual farmers

� Capacity building to district authorities to

establish Department of Irrigation

� Farmers in some villages do not have

legal rights over their farms where

these schemes are found not to have

land use plans

� Without Certificate of Customary

Right of Occupancy (CCROs),

farmers are not able to access credit

facilities

� Local Government Authorities do not

have sufficient capabilities to

facilitate village land use planning as

well as issuance of CCROs

� Village

Government

� District Councils

� National Land

Use Planning

Commission

� Ministry of

Lands, Housing

and Human

Settlements

Inadequate investment in smallholder irrigation development

� Inadequate capacity of farmers to

invest in the planning and

construction of irrigation

infrastructure

� Inadequate construction skills of

farmers

� Low level of funding by the

Government and low rate of

investment by private sector in

irrigation investments

� Climate change causes shortages of

water in recent years

� To support the improvement of traditional

irrigation schemes infrastructures

including construction of dams where

feasible and the software

� Promote awareness for the beneficiary

contribution to the improvement of their

irrigation scheme infrastructures

� Train farmers on irrigation techniques

covering water management and support

district staff to ensure improved

agronomic practices

� Support development of water storage

facilities to ensure reliable water supply

where possible

� Irrigators

Organisation

� Government of

Tanzania

� Non-

Governmental

Organisation

� Community

Based

Organisations

43

Key issues along the value chain Land and infrastructure

Extension services

Inputs Market

� Inadequate skills on operation and

maintenance resulting in water use

inefficiency

� Low capacity of organisations and

poor governance

� Inadequate environmental

consideration during planning and

implementing irrigation schemes

� Some of these scheme have

deteriorated and where efforts for

rehabilitation or upgrading of

traditional schemes has been done

by the government, majority of them

are semi-finished due to

underfunding

� Establish a professional management

requirement

� Strengthen the capacity of irrigators

organizations for effective monitoring

and management of irrigation schemes

� Institute a legal framework that will

require all farmers owning land in an

irrigation scheme to be members of the

irrigators’ organization

� Institute a mechanism that will enable

Irrigators Organisations to prepare

constitutions and bylaws and their

effective enforcement

� Institute mandatory formal transactions

on transfer of land from one farmer to

another in an irrigation scheme

� Establish a mechanism for service

providers in the private sector to provide

services for management of irrigation

infrastructure where farmers have

demonstrated inadequate capacity

� Establish mechanisms for effective

representation of scheme management

systems into river basin management

sub-systems

� Support the rehabilitation, remodeling

and upgrading of semi-finished irrigation

schemes on the basis of cost sharing

� Irrigators

Organisation

� Government of

Tanzania

� Non-

Governmental

Organisation

� Community

Based

Organisations


Ineffective management of smallholder irrigation schemes

44

Key issues along the value chain

� Ineffective involvement of the private

sector in large scale commercial

irrigation undertakings

� The identified irrigation potential area

has not been accurately and

exhaustively mapped and

demarcated

� Farmers lack irrigation skills

� Challenge to introduce the cost

sharing and recovery mechanisms

� To promote the demand-driven irrigation

scheme identification

� Undertake mapping and demarcation of

the potential land for new irrigation

schemes development

� Provide assistance for the development

of the area targeted for irrigation

expansion in collaboration with other

stakeholders

� Assist in the mobilization, training and

organization of smallholder farmers for

new irrigation schemes

� Support in the management of newly

developed irrigation schemes

� Establishment of effective cost sharing

and recovery mechanism

� Irrigators

Organisation

� Government of

Tanzania

� Non-

Governmental

Organisation

� Community

Based

Organisations

� Farmers producing one crop per year

while there is potential to produce

twice

� Farmers to be sensitized to produce a

second crop where possible

� Irrigators

Organisation

� Government of

Tanzania

� Non-

Governmental

Organisation

� Community

Based

Organisations


Underdevelop-ment of irrigation potential area

with improved irrigation infrastructure

Underutiliza-tion of irrigation land


Extension services

Inputs Market

45


� Increase number of extension officers to

fill the gaps in the schemes (One

extension officer for each scheme)

� Increase the number of irrigation

technicians (One irrigation technician for

each scheme)

� Government of

Tanzania

� Local

Government

Authority


Low supervision of crop management at scheme level


Extension services

Inputs Market

▪ Few number of extension officers

and irrigation technicians in the

scheme as compared to the total

requirement because:

– Poor recruitment by the

government of the diploma and

certificate trainees

– Few are employed as compared

to the requirement

– Increased numbers of schemes

increasing the demand

– Poor allocation of the current

number of extension officers

– Dropouts of extension officers

and irrigation technicians due to

retirement and attending higher

learning institutions

– Reallocation of extension officers

and irrigation technicians due to

deficiencies arising in other

areas

46


� Many extension officers and irrigation

technicians are insufficiently trained

in irrigated rice technology basing on

the Principles of Farmer Field School

and Integrated Pest Management

(FFS/IPM)

� Some of extension officers were

trained long time before the current

rice culture development

� Weak research/extension linkage

� Few farmers are trained on use rice

management and water management

� Retraining of extension and irrigation

technicians

� Recall the extension officers allocated to

the respective areas for rice technology

training

� Train farmers on rice irrigation and water

use management

� Government of

Tanzania

� Local

Government

Authority

� Insufficient transport facilities and

inputs and working gears for field

training and demonstration

� The extension officers and irrigation

technicians be given transport and

working gears

� Government of

Tanzania

� Local

Government

Authority


Low knowledge of rice management

of farmers and extension officers

Lack of transport facilities to extension officers and irrigation technicians


Extension services

Inputs Market

47


� Difficulties to access credit for

procuring inputs due to tough terms

and conditions (stringent collateral

requirements; prohibitive interest

rates; high bank charges and fees;

loan processing bureaucracy

discourages) that cannot be met by

the farmers and the agro dealers

� Currently the Government inputs

subsidy is not as smart as it is

supposed to be. This is because

most of the some of the farmers who

are selected to receive inputs

vouchers are poor to the extent that

they cannot afford topping up the

vouchers

� Low price of agricultural produce

make farmers fail to afford inputs. In

most cases farmers use proceeds of

crops to purchase inputs

� Smallholder farmers should market their

crop produce through Warehouse

Receipt System where it is easy to link

them with financial institutions (banks,

SACCOS, inputs distributors etc.)

� Farmers in irrigation schemes be

provided with inputs subsidy vouchers

� Smallholder farmers are sensitized to

market their crop produce through

Warehouse Receipt System where they

can access loans from lending

institutions while waiting for the prices to

go up

� Ministry of

Agriculture,

Food Security

and

Cooperatives

� District

authorities

� Private Sector

Organisation

� Irrigators

Organisation

� Many counterfeit inputs are sold in

many agro dealer shop in the country

� Strengthen the enforcement of the

existing inputs laws (Seed Act, Fertilizer

Act and Plant Protection Act) and also

reviewing them to combat the emerging

tricks used by defaulters

� Irrigators Organisation to promote inputs

in bulk from reliable suppliers

� Ministry of

Agriculture,

Food Security

and

Cooperatives

� Input suppliers


Poor access to inputs by smallholders

Existence of poor quality inputs in the market

Land and

infrastructure


Extension services

Inputs Market

48


� Poor roads infrastructure: rural

feeder roads connecting the main

roads and highways with villages lack

regular maintenance, resulting into

not being passable throughout the

season

� Inefficient secondary distribution

network: Agro dealers are mostly

located at urban areas and along the

main roads

� District councils take deliberate efforts to

maintain feeder/rural roads to enable

inputs to be transported close to farmers

in irrigation schemes at all times they

need

� Government of

Tanzania

� District

authorities

� Input suppliers

� Incorrect application/use of inputs:

Majority of smallholder farmers

cannot use/apply inputs correctly

even if they know the importance of

inputs use due to inadequate

technical knowledge of farmers as

well as agro dealers

� Poor fertilizer recommendation rates

(one size fits all)

� Train farmers on good agricultural

practices which includes proper use of

inputs especially fertilizer and agro-

chemicals

� Train agro-dealers on handling of inputs

and technical issues for them to advise

farmers when buying inputs from their

shops

� Department of Research in the Ministry

of Agriculture need to conduct soil

analysis in all the selected irrigation

schemes and review the existing

fertilizer recommendations for specific

locations for better application of fertilizer

� Government of

Tanzania

� District

authorities

� Non

Governmental

Organisations


Inadequate availability and distribution of inputs

Poor application or use of inputs

Land and

infrastructure


Extension services

Inputs Market

49


� Many farmers use their own saved

seeds (mixed/local varieties) which

may not be high yielding

� Promote use of few selected high

yielding seed varieties such as SARO 5.

Availability of improved rice seeds can

be attained through sensitization e

farmers in groups or individual to

produce Quality Declared Seeds (QDS)

and sell to agro-dealers or direct to

farmers in same locality

� Ministry of

Agriculture,

Food Security

and

Cooperatives

(Agriculture

Seed Agency)

� Farmers

(produce Quality

Declared Seeds

(QDS))

� Tanzania Official

Seed Certificate

Institute (TOSCI)

� Use of hand hoes by farmers in the

schemes in farm operations

(cultivation, weeding etc.)

� Establishment of privately owned

mechanization service centres to enable

smallholder farmers use tractors/ power

tillers

� District

authorities

� Irrigators

Organisation

� Private sector

service provider


Little usage of improved/high yielding varieties

Inadequate usage of mechanisationamong smallholder farmers

Land and

infrastructure


Extension services

Inputs Market

50


� Warehouses are owned by millers

which are tied to processing facilities,

i.e. conditions for storage are tied to

mandatory processing in the mill.

Farmers have no much choice to

choose a milling machine once he

has stored paddy in the mill (even if

the mill has poor quality)

� Warehouses are owned by villages or

Local Government Authorities are not

well kept or underutilised

� Each scheme should have a warehouse

and a professional manager

� Identify and upgrade existing

warehouses (200-400 tons capacity) in

the selected schemes to practice the

Warehouse Receipt System. Lease

village warehouses to farmer

organizations on long term contracts

� Establish big warehouses (20,000 Mt) in

strategic locations. Preferably in each

district to be linked the commodity

exchange

� Promote the use of Warehouse Receipt

System

� Upgrade the existing warehouses to

qualify for Tanzania Warehouse

Licensing Board licencing

� Farmers

organizations/

Irrigators

Organisations

� Most smallholder farmers sell paddy

and not rice i.e. no value addition

� Upgrade the existing processing facilities

� Encourage private sector and farmer

organizations to go for medium to large

processing facilities

� Encourage private sector to construct

large scale processing facilities at district

level near the big warehouses under

PPP or entirely by private sector

� Government of

Tanzania

� Private Sector

� Farmers

organisations


Poor or unavailability of storage facilities

Poor processing facilities


Extension services

Inputs Market

51


� Most of the farmers sell their paddy

individually

� Farmers are selling crop during

harvesting period and get lower

prices

� There are few cases of farmer

organizations which practice

Warehouse Receipt System or

collectively

� The wholesale buyers want to buy

rice but farmers want to sell paddy

� Most farmers lack market information

other than from traders

� Lack of central depository of market

data and stocks to help government

make informed decision like export

ban

� Lack of linkage to the international

market

� District crop cess is not ploughed

back to the agriculture sector

� Lack of accountability of the

authorities

� The government should consider

establishment of a commodity exchange

which will give small scale farmers an

opportunity to sell their rice globally

� Construct in each of the big warehouses

to be managed by Commodity

Exchange and there should be a big

processing facility nearby .The sites for

the warehouses should be mapped by

GPS and allocated by the Local


� Strengthen farmer organizations and

build their capacity to become

competitive in a market place -

introduce collective marketing concept to

the farmer organization (associations or

co-op) at scheme level

� Use Warehouse Receipt System as

collateral for getting credit from the

banks

� The government using National Food

Reserve Agency to consider inclusion of

paddy as one of the food security crops

to buy

� Reintroduce Market Development

Bureau (MDB)

� Farmers

organizations/

Irrigators

Organisations

� Tanzania

Warehouse

Licensing Board

� Local

Government

Authority

� Mixed Crop

Board

� National Food

Reserve Agency

� Commodity

Exchange


Poor marketing structure


Extension services

Inputs Market

52


� Most farmers cannot access formal

credit. As a result they take credit

from local sources at very high cost

sometimes 200%. They pre sell their

crops before harvesting to finance

their field operations and other family

needs

� Link farmers through their organizations

to financial institutions with affordable

terms

� Farmers

organizations/

Irrigators

Organisations

� Financial

institutions

� Unorganized outputs markets

(farmers selling their produce at low

prices). This reduces demand for

inputs

� Irrigators Organisation to hire

professional management

� Warehouse Receipt System be

promoted in the schemes so that

farmers in their organizations are linked

with financial institutions (banks,

SACCOS etc) for loans while their

produce is in the warehouse. This will

prevent farmers selling their produce

while the crop is still in the field or

immediately after harvesting

� District

authorities

� Tanzania

Warehouse

Licensing Board

� Financial

institutions

� Non

Governmental

Organisations

� Private Sector


Poor access to crop finance to facilitate

farming operations

Unreliable outputs markets


Extension services

Inputs Market

53


� Most government officials

misinterpret laws and interfere with

market system, e.g. forcing farmers

to use Warehouse Receipt System

for crops

� District Commissioners do not allow

movement of crops from districts

� Regional Commissioners imposing

and uplifting export ban arbitrarily

� Government to create good business

environment with clear policies in place

� Government of

Tanzania


Lack of accountability for government officials for underperfor-mance


Extension services

Inputs Market

54

Overview

Recommendations

55

Lab has prioritised 8 districts based on a set of criteria selection

Mpanda

Mbarali

Kyela

Iringa Rural

Kilombero

Morogoro

Rural

Mvomero

Kilosa

56

Kilosa district MOROGORO

� 8 irrigation schemes

� 3,004 smallholder

households

� 2,373 ha

� Yield from 4.2MT/ha to

8MT/ha

� Production from

9,925MT to 19,000MT

Kilosa district

SchemeDeveloped

area (ha) Households Yield (MT/ha)Existence

of IO

Existence

of IO Office

Existence

of IO Office

Existence of warehouse

and mechanisation centre

Aliqadiriya

Salama

Children

Assoc

160 160 4 No No No No

Chanzuru 400 725 4 No No No No

Ilonga -

Kilosa

120 600 4.5 No No No No

Lumuma-

Kilosa

600 326 3.8 No No No No

Madiani 200 200 4 No No No No

Mvumi 293 173 5 Yes Yes No No

Rudewa 500 720 4.5 No No No No

Sonjo 100 100 3.5 No No No No

58

MOROGOROMvomero district


� 786 smallholder

households

� 732 ha


8MT/ha

� Production from

3,004MT to 5,900MT

Mvomero district

SchemeDeveloped


of IO

Existence

of IO Office

Existence

of IO Office



Kigugu 480 506 4 No No No No

Mbogo 100 100 4 No No No No

Mkindo 152 180 4.5 Yes No No No

60

MOROGOROMorogoro rural district



households

� 1,100 ha


8MT/ha

� Production from

4,100MT to 8,800MT

Morogoro rural district

SchemeDeveloped


of IO

Existence

of IO Office

Existence

of IO Office



Bonye 200 200 3.8 No No No No

Magogoni 100 100 3.8 No No No No

Mbarangwe 200 125 4 Yes No No No

Tulo/

Kongwa

600 1,440 3.5 No No No No

62

Kilombero district MOROGORO



households

� 25,140 ha


8MT/ha

� Production from

88,890MT to

201,000MT

SchemeDeveloped


of IO

Existence

of IO Office

Existence

of IO Office



Ikule 210 352 3.5 No No No No

Kihansi 1,000 1,000 4.5 No No No No

isegese-

Idete-Mtega

wa Simba

Prison

22,000 22,000 3.5 Yes No No No

Mang'ula

Youth

300 300 3 No No No No

Mkangawal

o

250 250 3.5 No No No No

Mkula 100 92 4 Yes Yes No No

Siginali 80 210 3.5 No No No No

Udagaji 1,200 380 3.5 No No No No

Kilombero district

64

MBEYA



households

� 20,176 ha


8MT/ha

� Production from

82,525MT to

161,000MT

Mbarali district

SchemeDeveloped


of IO

Existence

of IO Office

Existence

of IO Office



Chamoto

Batania

530 246 4 No No No No

Chimba

Chimba -

Mpolo

702 587 3.8 No No No No

Chosi-

Chimala

570 311 3 No No No No

Gonakuva

gogolo

150 347 3.5 Yes Yes No No

Gwiri 500 836 3.5 Yes Yes No No

Herman 530 269 4.5 No No No No

Ibohora 200 108 4 No No No No

Igomelo 312 302 4.3 Yes Yes No No

Igumbilo-

Isutu

475 194 4.5 No No No No

Ipatagwa 542 304 4 Yes Yes No No

Mbarali district

SchemeDeveloped


of IO

Existence

of IO Office

Existence

of IO Office



Kapyo 329 609 3.8 No No No No

Kimani 500 500 5 No No No No

Mbuyuni-

Kimani

1,500 1,500 4.5 Yes Yes No No

Langwira 250 250 4 No No No No

Lyanyula 768 799 4 No No No No

Madibira 3,300 3,000 4.5 Yes Yes No No

Maendeleo 795 349 4 No No No No

Mahango-

Ushirika764 260 3.5 No No No No

Majengo 650 374 4.6 No No No No

Mashalla 400 400 4 No No No No

Mbarali district

SchemeDeveloped


of IO

Existence

of IO Office

Existence

of IO Office



Matebete 470 330 3.75 No No No No

Mayota 150 150 3.5 No No No No

Motombaya 600 404 4 Yes Yes No No

Mswiswi-

Azimio

300 300 3.8 No No No No

Mswiswi-

Kongolo

600 347 4 No No No No

Mwendamt

itu

100 3,018 3.5 No No No No

Njalalila 320 586 4 No No No No

Njombe 519 127 3 Yes Yes No No

Ruanda

Majenje

450 226 4 Yes Yes No No

Songwe

Imalilo

700 700 3.8 No No No No

Mbarali district

SchemeDeveloped


of IO

Existence

of IO Office

Existence

of IO Office



Uhambule/

Habibu CA

200 200 3.2 No No No No

Uhambule/

Utengule

500 500 3.6 No No No No

Ukwaheri 200 200 3.6 No No No No

Ukwavila 400 400 3.8 No No No No

Uturo 900 582 5 Yes Yes No No

Mbarali district

69

MOROGOROKyela district



households

� 629 ha


8MT/ha

� Production from

2,621MT to 5,000MT

SchemeDeveloped


of IO

Existence

of IO Office

Existence

of IO Office



Ikumbilo 420 880 4 No No No No

Ngana 209 165 4.5 No No No No

Kyela district

71

RUKWAMpanda district



households

� 2,625 ha


8MT/ha

� Production from

9,819MT to 21,000MT

SchemeDeveloped


of IO

Existence

of IO Office

Existence

of IO Office



Iloba 200 200 2 No No No No

Kakese 500 4,273 4 No No No No

Karema 755 2,573 4 No No No No

Mwamapuli

-Mpanda

DC

500 3,108 4.12 No No No No

Mwamkulu 100 3,340 3 No No No No

Ugala 220 576 3 No No No No

Uruira 350 565 4 No No No No

Mpanda district

73

IRINGA



households

� 6,783 ha


8MT/ha

� Production from

24,338MT to 54,000MT

Iringa rural district

SchemeDeveloped


of IO

Existence

of IO Office

Existence

of IO Office



Cherehani

Mkoga

121 121 4 No No No No

Idodi 350 448 5 No No No No

Ipwasi

Ndorobo

3,000 665 3 No No No No

Mafuruto 500 656 4.5 No No No No

Magozi 600 600 3.5 No No No No

Makuka 300 370 4 No No No No

Mapogoro 112 448 4.5 Yes No No No

Mapogoro-

Kibaoni

400 815 3 Yes No No No

Mkombozi 1,000 427 4 No Yes No No

Mlambalasi 100 150 5 No No No No

Pawaga-

Mlenge

300 200 4.5 Yes Yes No No

Iringa rural district

75

Irrigators Organisation (IO)

Roles of Irrigators’ Organisation

i) Establishment

ii) Registration

� An Irrigators’ Organization major role is to participate in scheme development; operation and

maintenance of irrigation schemes; and collection and management of irrigation service

charges

� Current irrigators’ organizations are weak and unable to provide the required services to

irrigators to the extent that they cannot reap expected benefits from the investment

IOs are registered as Irrigators Association

(IAs) under the Ministry of Home Affairs in

order to operate and maintain the irrigation

facilities

IO to be registered as a legal entity under

the Association Act with its own

constitution to be able to access formal

rights such as water rights, land tenure

and public services from the government

such as development assistance,

technical advice, and training

programmes

� Commitment of the irrigators should be

confirmed in writing in a signed letter to the

District Council.

� This letter defines the obligations of the

Irrigators Organisation as per Comprehensive

Guidelines for Irrigation scheme development.

iii) Formal commitment to the District Council

76

Detailed stakeholder mapping under proposed structure

IRRIGATORS ORGANISATION

Zonal Irrigation

and Technical Services

Unit

Ministry of Agriculture, Food Security and

Cooperatives

Local Government

Authority (District Council)



Local Buyers

Smallholder Farmer

Ministry of Lands, Housing and Human Settlements Development

Ministry of Water

Ministry of Works

Ministry of Industry and Trade

Research and

Training Institutions


PMO-RALG

Commodity

Exchange

Processor

Change agent

77

Roles and responsibilities of key stakeholder

Roles and responsibility

Ministry of Agriculture, Food Security and Cooperatives

Performance managed by

Qualifications


▪ Facilitating the development of sustainable agriculture

▪ To supervise policy and regulatory function

▪ To backstop LGA technically

▪ Joint recruitment of service provider

▪ Conduct sensitisation seminars at Zonal and District level

▪ Fast track establishment of Zonal Irrigation Commision

Incentives required to perform

▪ Adequate resources (at least 10% of National Budget)

▪ Adoption of developed technologies

▪ Increased accountability under D by D

▪ Minister of Agriculture

▪ N/A

MAFC

Research and Training

Institutions

Zonal Irrigation and

Technical Services Unit

Local Government

Authority (District Council)

78




Zonal Irrigation and Technical Services Unit (ZITSU)


Qualifications


▪ Planning and design of irrigation systems

▪ Irrigation infrastructure construction and supervision

▪ Irrigation research and technology promotion

▪ Technical backstopping of the LGA (on all technical aspects related to Irrigation Department)

▪ Transport and working facilities

▪ Customised training programmes

▪ Attractive remuneration package

▪ Director of Irrigation and Technical Services under MAFC

▪ N/A

ZITSU

MAFC

LGA

79




Local Government Authority (LGA)


Qualifications


▪ Implement agriculture policies and regulatory functions

▪ Supervise extension officers and irrigation technician

▪ Construction and repair of irrigation infrastructure

▪ Monitor and evaluate irrigation interventions

▪ Facilitate issuance of CCRO’s

▪ Contract service providers

▪ Adequate resources

▪ District Executive Director (DED)

▪ N/A

LGA

Ministries

ZITSU



80




Irrigators Organisation (IO)


Qualifications


▪ Overall management of an irrigation scheme

▪ Supervise farmers in scheme development improvement

▪ Collection and management of irrigation service charges

▪ Any other roles as provided in the Constitution

▪ Annual General Meeting (AGM)

▪ IO to be registered as a legal entity under the Association Act with its own constitution


Processor

LGA


Smallholder Farmers


Input Supplier &

Mechanisa-tion

▪ Training in management of IO▪ Office space▪ Sustainable irrigation scheme▪ Income from different sources for management

purpose

81




Smallholder Farmers


Qualifications


▪ To produce rice under good agricultural practices

▪ To comply to the constitution and its bylaws

▪ To sell their surplus produce

▪ Irrigators Organisation (IO)

▪ Owns a piece of land in the irrigation scheme

▪ To be a member of IO

▪ Affordable inputs▪ Improved irrigation infrastructure▪ Reliable market▪ Assured land tenure


Smallholder farmers

82

Structure of Irrigators Organisation (IO)

General

Meeting

Executive

Committee

Internal

Auditor

Treasurer Secretary

Technical

Management

Team

Planning

and Finance

Sub-

Committee

Agriculture

&

Environment

Commitee

Construction

Operation &

Maintenanc

e Commitee

Block

leaderships

Private

Service

Provider

Technical

Manager

Warehouse

Operator

Extension

Officer

Irrigation

Technician


83

Roles and responsibilities of key stakeholder in Technical Management

Team





Qualifications


▪ Build capacity of irrigators’ organization (IO) and smallholder farmers as a whole

to take over the management after 2 years.

▪ Provision of various trainings related to leadership skills, financial management,

record keeping, agronomic skills, post-harvest handling, marketing etc

▪ Organizing bulk purchase of inputs in collaboration with IO

▪ Organizing storage of paddy in a given warehouse for collective marketing

▪ Working together with IO to look for potential buyers

▪ Link the IOs warehouses with the Commodity Exchange (COMEX).

▪ Working with IO to identify and engage high grade processors for better marketing

▪ Identify and engage mechanization services

▪ Recruit technical team, including Technical Manager, Extension Officer,

Irrigation Technician and Warehouse Operator

▪ Hire consultants, and other business development services (BDS) providers to

provide various business development services to the IO and all users of the

scheme

▪ Conduct different studies/research work including market surveys, baseline

surveys, inventory of warehouses and processing facilities in the target area

▪ Contact branding companies and Market Information Service providers

▪ Link IOs to financial institutions

▪ Local Government Authority

▪ At least 2 years experience working with small holder

farmers in Tanzanian environment

▪ Must have technical capacity to cover at least one district

out of 8

▪ Must have skills to organize smallholder farmers and link

them to markets

▪ Timely payment

Private

Service

Provider

Executive

Committee

(IO)

Technical

Manager

Research

and Training

Institutions

LGA

84



Team


Technical Manager

Qualifications


▪ To manage the business part of the scheme on behalf of IO

and report to Executive Committee

▪ Prepare business plan and submit to the Executive Committee

▪ Supervise the technical team

▪ To manage the warehouse operation

▪ To organise input supply

▪ To look for rice markets

▪ Prepare annual accounts and reports

▪ At least Diploma in Farm Management,

Degree in Agribusiness or any other

relevant/related field


▪ Service provider

▪ Attractive salary

▪ Office space and facilities

▪ Transport

▪ Performance bonus

Technical

Manager

Private

Service

Provider

Irrigation

Technician

Extension

Officer

Warehouse

Operator

85



Team



Qualifications


▪ Supervision on management of irrigation infrastructure and

irrigation water utilisation

▪ Supervise construction

▪ At least a diploma certificate in irrigationPerformance managed by

▪ Technical Manager


▪ Customised training programmer

▪ Attractive remuneration package

Irrigation

Technician

Technical

Manager

86


Team


Warehouse Operator

Qualifications


▪ To control and monitor the quality of rice stored in the

warehouse

▪ To record and document all necessary information related to

the stock stored

▪ To fumigate and control pest within and around the warehouse

▪ To manage the security guard and all labourers involved

during loading and offloading

▪ To collect storage fees from members

▪ To control the stock getting in and out of warehouse

▪ Resident in the villages around the IO

▪ Trained in warehouse management

▪ Preferably member of IO



▪ Technical Manager and IO Committee

▪ Attractive package of salary

▪ Performance based incentives

Warehouse

Operator

Technical

Manager

87


Team


Extension Officer

Qualifications


▪ Advise farmers on GAP (Good Agricultural Practices)

▪ Link research and farmers

▪ Supervise farmer training at farm level

▪ Monitor and evaluate production performance

▪ Data collection on production inputs used and yields

▪ Prepare and submit reports to technical manager

▪ At least a diploma in Agriculture/Crop

Production



▪ Technical Manager

▪ Transport

▪ Allowances

▪ Retraining and seminars on rice

▪ Working gears such as laptops

Extension

Officer

Technical

Manager

88

Roles and responsibilities of key stakeholder within the IO



General Meeting


Qualifications


▪ This is the highest organ of IO

▪ To make resolutions on all bylaws and IO guidelines

▪ To review and approve annual budget

▪ To hire and fire technical management staff including

Technical Manager

▪ To approve work plans and contracts

▪ Approve and amend Constitution

▪ To elect and expel the IO members

▪ Other duties as provided in Constitution

▪ Rehabilitated irrigation schemes

▪ Professionally managed schemes

▪ High recognition by LGA and Central Government

▪ Relevant Registerer

▪ N/A

Executive

Committee

Technical

Manager

89

Executive

Committee

Treasurer Secretary




Executive Committee

Performance managed byQualifications


▪ Supervision of all scheme activities

▪ To make decisions of the issues related to the scheme

▪ Implementation of the Constitution

▪ Signing of all contracts and legal documents

▪ Recognition and respect

▪ Exposure visit

▪ General Meeting▪ N/A

General

Meeting

Internal

Auditor

Technical

Manage-

ment Team

Planning

and Finance

Sub-

Committee

Agriculture &

Environment

Commitee

Construction

Operation &

Maintenance

Commitee

90




Secretary of the IO


▪ To keep all records of the meetings

▪ Preparation of scheduled meetings of the Executive

Committee and AGM

▪ Collection of all revenues from farmers as agreed

▪ Communications with other entities related to the Executive

Committee

▪ Paid some percentage of the total collectons

▪ Executive Committee

Qualifications

▪ Secondary education and above

▪ Not in a higher position in any of the

Government or political party

▪ Basic knowledge in book keeping

Executive

Committee

Secretary


91




Treasurer of the IO


▪ Receive and keep the collected revenues and grants

▪ Banking and keeping of financial records

▪ Payments of all bills as regards to transactions of the

scheme

▪ Preparation of statements of income and expenditure

▪ Salary as agreed by AGM


Qualifications

▪ Member of the scheme

▪ Good record of worthiness

▪ Basic knowledge in book keeping and

accounting

Executive

Committee

Treasurer


92




Auditor


▪ To audit accounts of IO

▪ Advise Executive Committee on the management of IO

account

▪ Prepare audit report for the audited account and submit to

Executive Committee (copied to LGA)



Qualifications

▪ Qualified Auditor

Executive

Committee

Auditor


93




Block leaders


▪ Supervise farmers in the blocks

▪ Ensure technical compliance

▪ Supervise infrastructure, operations and maintenance

▪ Supervise fee collectives

▪ Link between farmers and irrigation scheme management

▪ Recognition and respect


Qualifications

▪ Member of the block

▪ Progressive farmer


Block

leaders

Smallholder

farmers

Planning and

Finance

Sub-

Committee

Agriculture &

Environment

Commitee

Construction

Operation &

Maintenance

Commitee

94

Relationship between Irrigators Organisation with key stakeholders

Local Government Authorities (LGA)

▪ Provision of grant required for development based activities such as construction of irrigation infrastructure, warehouse rehabilitation, IO office, etc


Smallholder farmers

▪ All irrigation scheme farmers to be registered and sign an agreement to confirm compliance to by-laws which will guide the management of the scheme

Employees of IO

▪ Tripartite agreement between IO, employee and LGA or Zonal Irrigation Office

▪ Key employees of the IO are:

– Professional manager

– Warehouse operator

– Irrigation technician

– Extension officer

Service providers

▪ Service providers will be providing essential services such as:

– Mechanisation for ploughing, levelling harvesting and water management

– Training for trainers and farmers

– Capacity building from the Business Development Services (BDS) providers such as MWIVATA and RUDI

– Input suppliers such as seed, fertilisers and agrochemical producers

– Processors to mill paddy into rice

– Financial institutions to provide loans and financial support

– Local and international buyers

95

The Irrigators Organisation’s Constitution should contain specifics

as below

1. Particulars of the organisation

2. Definition of words

3. Objectives

4. Membership and termination

5. Rights, roles and responsibilities of members

6. Finance and properties of the organisation

7. Organisation’s meetings

8. Structure, leadership roles and responsibilities

9. The power of the organisation

10. Dissolution of the organisation

11. The guardian of the organisation

12. By-laws of the organisation

96

Income statement of a typical rice smallholder RICE EXAMPLE

1 Based on ~80% commercialization rate for farmers

2 Based on recommended seed and fertilizer usage

Current situation

Expected condition under proposed model

Cash profit (‘000 per ha): 2,760 2,248

Yield of ~8 tons per ha

~10% lower yield due to unforeseen circumstances

SOURCE: Team’s analysis

Yield (tons per ha): 4.0–

Marketed amount (tons per ha): 3.2X

Amount consumed

on-farm1 (tons per ha): 0.8–

Farm-gate price (‘000 TZS per ton): 800–

Cash revenue (‘000 TZS per ha): 2,560–

Cash profit (‘000 per ha): 1,610

Cash cost2 (‘000 per ha): 950–

Marketed amount (tons per ha): 6.4 5.8X

Yield (tons per ha): 8 7.2–

Amount consumed

on-farm1 (tons per ha): 1.6 1.4–

Farm-gate price (‘000 TZS per ton): 800 800–

Cash revenue (‘000 TZS per ha): 5,120 4,608–

Cash cost2 (‘000 per ha): 2,360 2,360–

▪ Under the current

practices, a typical

smallholders in irrigated

area is earning cash

profit of TZS1.6 million

per ha

▪ With the proposed

model, farmer’s income

is expected to increase

by 71% under optimum

condition

▪ In the case where

conditions may not be so

favourable, farmer can

still expect income

increase by 40% under

the proposed model

97

Economics of Irrigators Organisation

Small(<500 ha)

Medium(500-1,000ha)

Large(>1,000ha)

6 001 600

12 294 515

21 953 812

Year 1 Year 2 Year 3

Profit for IO

33 235 160

70 828 952

123 611 881


Profit for IO

79 545 160

169 157 940

291 949 269


Profit for IO

98

Economics of Irrigators Organisation – Small (250 ha)

Number of smallholder households:

Area (ha):

Inflation per year:

250

250

5%

44.1

110.3 168.4

231.0

298.5 347.9

426.3

2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20

Profit for IO (TZS mil) (Small Irrigation Scheme)

INCOME STATEMENT:

2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20Revenue:

Registration fee 1,250,000 - - - - - -Storage fee (warehouse) 2,500,000 4,200,000 6,615,000 8,682,188 10,939,556 13,400,956 16,081,148 Penalty 625,000 500,000 375,000 250,000 125,000 125,000 125,000 Shares 1,250,000 44,125,000 110,250,000 168,394,544 231,039,002 298,501,443 347,875,931 Irrigation Services Fee 40,000,000 63,000,000 88,200,000 92,610,000 97,240,500 102,102,525 107,207,651

45,625,000 111,825,000 205,440,000 269,936,731 339,344,059 414,129,924 471,289,730

Expenditure:

Water bills 1,125,000 1,125,000 1,125,000 1,125,000 1,125,000 1,125,000 1,125,000 Storage cost 3,750,000 5,200,000 7,207,500 8,841,094 10,569,778 12,400,478 14,340,574 Warehouse supervision allowances 500,000 525,000 551,250 578,813 607,753 638,141 670,048 Administrative cost • Fuel 2,800,417 2,940,438 3,087,459 3,241,832 3,403,924 3,574,120 3,752,826 • Motorbike maintenance 700,104 735,109 771,865 810,458 850,981 893,530 938,207• Stationeries 500,000 525,000 551,250 578,813 607,753 638,141 670,048 • Travelling 500,000 525,000 551,250 578,813 607,753 638,141 670,048 • Salaries 28,600,800 30,030,840 31,532,382 33,109,001 34,764,451 36,502,674 38,327,807 Purchase of motorbikes to replace old motorbikes 23,369,247 Total 1,500,000 1,575,000 37,045,456 38,897,729 40,842,615 66,253,993 45,028,984 Net Balance 44,125,000 110,250,000 168,394,544 231,039,002 298,501,443 347,875,931 426,260,746

99

Economics of Irrigators Organisation – Medium (750 ha)


Area (ha):

Inflation per year:

750

750

5%

INCOME STATEMENT:

2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20Revenue:Registration fee 3,750,000 - - - - - -

Storage fee (warehouse) 7,500,000 12,600,000 19,845,000 26,046,563 32,818,669 40,202,869 48,243,443

Penalty 1,875,000 1,500,000 1,125,000 750,000 375,000 375,000 375,000

Shares 3,750,000 135,375,000 336,900,000 526,399,955 730,152,971 949,150,915 1,114,715,533

Irrigation Services Fee 120,000,000 189,000,000 264,600,000 277,830,000 291,721,500 306,307,575 321,622,954

136,875,000 338,475,000 622,470,000 831,026,518 1,055,068,140 1,296,036,360 1,484,956,929Expenditure:

Water bills 3,375,000 3,375,000 3,375,000 3,375,000 3,375,000 3,375,000 3,375,000

Storage cost 8,250,000 12,600,000 18,622,500 23,523,281 28,709,334 34,201,435 40,021,722

Warehouse supervision

allowances 500,000 525,000 551,250 578,813 607,753 638,141 670,048

Administrative cost

• Fuel 8,401,250 8,821,313 9,262,378 9,725,497 10,211,772 10,722,360 11,258,479

• Motorbike maintenance 2,100,313 2,205,328 2,315,595 2,431,374 2,552,943 2,680,590 2,814,620

• Stationeries 500,000 525,000 551,250 578,813 607,753 638,141 670,048

• Travelling 500,000 525,000 551,250 578,813 607,753 638,141 670,048

• Salaries 75,136,800 78,893,640 82,838,322 86,980,238 91,329,250 95,895,713 100,690,498

Purchase of motorbikes to

replace old motorbikes 70,107,742

Total 1,500,000 1,575,000 96,070,045 100,873,547 105,917,224 181,320,827 116,773,740

Net Balance 135,375,000 336,900,000 526,399,955 730,152,971 949,150,915 1,114,715,533 1,368,183,190

135.38

336.90

526.40

730.15

949.15 1 114.72

1 368.18

2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20

Profit for IO (TZS mil) (Medium Irrigation Scheme)

100

Economics of Irrigators Organisation – Large (1,500 ha)


Area (ha):

Inflation per year:

1,500

1,500

5%

INCOME STATEMENT:

2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20Revenue:Registration fee 7,500,000 - - - - - -

Storage fee (warehouse) 15,000,000 25,200,000 39,690,000 52,093,125 65,637,338 80,405,738 96,486,886

Penalty 3,750,000 3,000,000 2,250,000 1,500,000 750,000 750,000 750,000

Shares 7,500,000 272,250,000 676,875,000 1,063,408,073 1,478,823,924 1,925,125,124 2,264,974,935

Irrigation Services Fee 240,000,000 378,000,000 529,200,000 555,660,000 583,443,000 612,615,150 643,245,908

273,750,000 678,450,000 1,248,015,000 1,672,661,198 2,128,654,262 2,618,896,013 3,005,457,729 Expenditure:

Water bills 6,750,000 6,750,000 6,750,000 6,750,000 6,750,000 6,750,000 6,750,000

Storage cost 15,000,000 23,700,000 35,745,000 45,546,563 55,918,669 66,902,869 78,543,443

Warehouse supervision

allowances 500,000 525,000 551,250 578,813 607,753 638,141 670,048

Administrative cost

• Fuel 16,802,500 17,642,625 18,524,756 19,450,994 20,423,544 21,444,721 22,516,957

• Motorbike maintenance 4,200,625 4,410,656 4,631,189 4,862,749 5,105,886 5,361,180 5,629,239

• Stationeries 500,000 525,000 551,250 578,813 607,753 638,141 670,048

• Travelling 500,000 525,000 551,250 578,813 607,753 638,141 670,048

• Salaries 144,940,800 152,187,840 159,797,232 167,787,094 176,176,448 184,985,271 194,234,534

Purchase of motorbikes to

replace old motorbikes 140,215,483

Total 1,500,000 1,575,000 184,606,927 193,837,274 203,529,137 353,921,077 224,390,874

Net Balance 272,250,000 676,875,000 1,063,408,073 1,478,823,924 1,925,125,124 2,264,974,935 2,781,066,855

272.25

676.88 1 063.41

1 478.82

1 925.13 2 264.97

2 781.07

2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20

Profit for IO (TZS mil) (Large Irrigation Scheme)

101



Sensitization on the Model

1

Implementation of the Model

2

▪ MAFC to convene a 2 days awareness creation seminar on the model (4 regions and 8 districts- Regional Commissioner, District Executive Director, District Agriculture and Irrigation Cooperative Officer, Council chair, Zonal Officer, Regional Administrative Secretaries and District Commisioner)

▪ MAFC to conduct a one day seminar to each of the 8 districts

▪ LGA to sensitize targeted communities in 78 schemes

▪ LGA to establish and strengthen Irrigators Organisation (IO)

▪ Targeted 78 schemes to confirm and apply for the services

▪ MAFC to prepare TOR for private service provider and tender documents for 78 schemes

▪ MAFC to advertise tender and shortlist private service providers to implement the model

▪ MAFC & LGA to do joint recruitment of private service providers

▪ LGA to conduct orientation of private service providers on the model and site possession

▪ Private service provider to provide services as per TOR

▪ Cabinet to resolve establishment of the Legal Framework for Irrigation Development

▪ Ministries responsible for Irrigation and Civil Service to establish the National Irrigation Commission for accelerated irrigation development in Tanzania

102



Land Use Planning and Titling

3

▪ National Land Use Planning Commission to develop Village Land Use Plans in 78 schemes

▪ Ministry of Lands to establish registries for District and Village Land Registries for 8 districts

▪ Ministry of Lands to provide equipment and materials for District and Village Land Registries

▪ Ministry of Lands to prepare and issue CCROs to farmers in 78 schemes


4

▪ PMO-RALG to establish District Irrigation Development Department (DID) at LGA

▪ DED to conduct baseline survey (social, soil, topo, water resource, agronomy, economic, environmental studies)

▪ DED & ZIO to prepare tender document and advertise (construction of irrigation infrastructure and IO office)

▪ DED and ZIO to recruit contractor for the construction/rehabilitation of irrigation infrastructures and IO Office

▪ Contractor to construct/rehabilitate irrigation infrastructure and IO Offices in 78 schemes

▪ Zonal Irrigation Office & LGA to supervise the construction of irrigation infrastructure and IO Office

▪ District Council to prepare tender documents and sign contract for construction/rehabilitation of warehouses

103



Construction of irrigation infrastructure, warehouses and farm roads (cont.)

4

▪ District Council to recruit contractors for construction/rehabilitation of warehouses in 78 schemes

▪ Contractor to construct/rehabilitate warehouses in 78 schemes

▪ Tanzania Building Agents to supervise construction of warehouses

▪ District Council to prepare tender documents for rehabilitation/upgrading of farm roads

▪ District Council to recruit contractors to rehabilitate/upgrade farm roads

▪ Contractor to rehabilitate/upgrade farm roads

▪ District Engineer to supervise rehabilitation/upgrade of farm roads

▪ Strengthening of LGA

▪ Strengthening of Zonal Irrigation Office


5

▪ Training institutions to retrain extension officers and irrigation technicians in 78 schemes

▪ Extension officer/Input companies to establish farmers field school

▪ Training institutions to train lead farmers on GAP (Good Agricultural Practices) - 5 farmers per scheme

▪ Lead farmers/Extension Officer to train farmers at scheme level

▪ Private service provider to provide transport logistics (motorbikes) and working facilities to extension officer and irrigation technician in 78 schemes

104



Contracting input suppliers, mechanisationand financial institutions

6

▪ Executive Committee (IO)/ Management to establish demand for inputs

▪ Seed companies to produce the selected improved seed for 78 schemes

▪ Technical Manager and Executive Committee (IO) to identify, negotiate and enter into procurement contract with input suppliers

▪ Technical Manager and Executive Committee (IO) to negotiate with LGAfor government input subsidy

▪ Technical Manager and Executive Committee (IO) to identify financial institutions and conditions for loans

▪ Technical Manager to facilitate negotiations between the financial institutions and IO for loans

▪ Technical Manager and Executive Committee (IO) to identify and contract provider of mechanization services

Warehouses Management and Market Linkages

7

▪ Private service provider to identify and prepare inventory of existing warehouses, owners and processing facilities

▪ Private service provider to conduct market survey

▪ Executive Committee (IO) to sign contract with warehouse operator

▪ Private service provider to procure basic warehouse equipment

▪ Private service provider to recruit warehouse workers

▪ Technical Manager to sign contract with processors and buyers

▪ Private service provider to establish market information system

▪ Technical Manager to identify and contract branding companies

105




8

▪ Cabinet to resolve establishment of Commodity Exchange in Tanzania and approve establishment of Commodity Exchange of Tanzania secretariat under Ministry of Industry and Trade (MIT)

▪ Commodity Exchange of Tanzania secretariat to collect all studies on COMEX including the Roadmap

▪ Commodity Exchange of Tanzania secretariat to prepare system design

▪ Commodity Exchange of Tanzania secretariat to establish a trading floor using consultants

▪ Rice to be among the commodities to be traded in Commodity Exchange of Tanzania

▪ Service provider to link rice warehouses to Commodity Exchange

▪ MAFC to establish a credible Agriculture Statistical Bureau

106

Macro level Gantt Chart

2013 2014 2015

Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

Private Service

Provider

3) Land Use Planning

and Titiling

MAFC, LGA

MAFC, LGA1) Sensitisation of Model

2) Implementation

of Model

Executive

Committee (IO),

Technical Manager

6) Contracting Input

Suppliers, Mechanisation

and Financial Institutions

Responsible

7) Warehouses

Management and

Market Linkages

Activity

Ministry of

Industry and Trade

8) Inclusion of

Rice In Commodity

Exchange

Private Service

Provider

5) Capacity Building

Of Extension Service

Providers

4) Construction of

Infrastructure

Ministry of Lands

LGA

1

2

3

4

5

6

7

8

107

Sensitisation of the model

2013

Jul Aug Sep

27 28 29 30 31 32 33 34 35 36 37 38 39

Action

PartyActivity

MAFC 92.8

Sensitise

communities

at schemes

LGA

Establish &

strengthen

IO

LGA 780

(TZS mil)

Awareness

seminar on

model with

regional &

district

leaders

MAFC 65.0

78

Seminar at

district level

Assumption: Inflation rate at 5% per annum

Cost

2013 -2015

1

108

Implementation of the model

2013 2014 2015

Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

IOSchemes to confirmand apply

Second year contractFirst year contract

(TZS mil)ActionPartyActivity

1270.0MAFC,PresidentsOffice,PublicService

Establish NationalIrrigation Commission

MAFC

CabinetResolve establishmentof Legal Frameworkfor IrrigationDevelopment

PrivateServiceProvider

24,946.1

6.0

9/8/13 9/8/14 9/8/15Recruitment of privateservice providers

3.8

MAFC &LGA

10.5

MAFC

Conduct orientation toprivate serviceproviders

Advertise tenderand shortlistprivate serviceproviders

39.0

Prepare TOR & tenderdocuments for privateservice provider

7.8

Provide services asper TOR

LGA


Cost2013 – 2015

2

109

Land use planning and titling

2013 2014

Jul Aug Sep Oct Nov Dec Jan

3,600.0Ministryof Lands

Establish Districtand Village LandRegistries

468.0

Ministryof Lands

1,400.0

ActivityActionParty (TZS mil)

Develop VillageLand Use Plans

NationalLand UsePlanningCommission

74.1Ministryof Lands

Provide equipmentand materials forDistrict and VillageLand Registries

Prepare andissue CCROs tofarmers


Cost2013 – 2015

3

110


2013 2014

Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr

76,800.0ContractorConstruction of warehouses

780.0District

Council

Recruit contractor for construction of warehouses

1,152.0District

Council

Prepare tender for construction of warehouses

ActionPartyActivity

500.0MAFCStrengthening of Zonal Irrigation Office

Upgrading of farm roads

780.0District

Council

Recruit contractor for upgrading farm roads

Contractor

1,152.0District

Council

Prepare tender for upgrading farm roads

5,100.9

768.0Tanzania

Building

Agents

Supervision of construction of warehouses

51.0

1,152.0DED & ZIO3Prepare tender and advertise for construction

of irrigation infrastructure & IO office

Supervise upgrading of farm roads

5,184.0DED2Conduct baseline survey

District

Engineer

50.0PMO-RALGEstablish DID1 at LGA

2,490.8

Strengthening of LGA LGA 2,706.7

Recruit contractor for construction of irrigation

infrastructure & IO office

DED & ZIO 780.0

Construction of irrigation infrastructure & IO office Contractor 164,025.0

Supervision of construction of irrigatiom

Infrastructure & IO office

ZIO, LGA &

Consultant

(TZS mil)

1 DID stands for District Irrigation Development Department 2 DED stands for District Executive Director

3 ZIO stands for Zonal Irrigation Office


Cost

2013 - 2015

4

111


2013 2014 2015

Q3 Q4 Q1 Q2 Q3 Q4 Q1

340.6TrainingInstitutions

(TZS mil)

Establish farmers fieldschool

Activity

2,915.3PrivateServiceProvider

Provide transport logisticsand working facilities toextension officers andirrigation technicians

ExtensionOfficer/InputSupplier

340.6

ActionParty

Train lead farmers onGAP (Good AgriculturalPractices)

756.6

Train lead farmers onGAP (Good AgriculturalPractices)

648.0PrivateServiceProvider

Retrain extension officersand irrigation technicians

Lead farmers/ExtensionOfficer


Cost2013 - 2015

5

112

Contracting input suppliers, mechanisation and financial institutions

2013 2014 2015

Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

Facilitate loan negotiation

between IO and financial

institutions

196.7Technical Manager

& Executive

Committee


& Executive

Committee

Negotiate with LGA for

input subsidy

Identify financial

institutions & conditions

for loans

Technical Manager

& Executive

Committee

ActionPartyActivity


& Executive

Committee

Enter into procurement

contract with input

suppliers

Identify & contract

provider of mechanization

services

(TZS mil)

29,357.7ASA and private

seed companies

Produce improved

seeds

73.8


-Executive

Committee (IO)/

Management

Establish demands

for inputs


Cost2013 – 2015

6

113

Warehouses management and market linkages

2013 2014 2015

Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

-Private

Service

Provider

Prepare inventory

of existing

warehouses and

processing facilities

-

Identify and

contract branding

companies

Sign contract with

warehouse operator

Executive

Committee

(IO)

-

Procure basic

Warehouse

equipments

Private

Service

Provider

-

Recruit warehouse

workers

Private

Service

Provider

-

Technical

Manager

-

Activity

Establish market

information system

Action

Party (TZS mil)

Private

Service

Provider

-

-Private

Service

Provider

Conduct market

survey

Sign contract with

processors and

buyers

Technical

Manager

Cost2013 – 2015

7

Cost for the warehouses management and market linkages activities are borne by the private service provider as per the contract


114


2013 2014

Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug

PrivateServiceProvider

Establish a credibleAgriculture StatisticalBureau

MAFC -

Establishment ofCommodity Exchangeof Tanzania secretariat

ActionPartyActivity

-

Collect all studies onCommodity Exchangeincluding roadmap

MIT

Prepare system design MIT

-

Establish trading floorusing consultants

MIT

MIT

Rice to be traded inCommodity Exchange

MIT -

Linking rice warehousesto Commodity Exchange

(TZS mil)


Cost2013 - 2015

2,076.3

8

115

Total budget required for the smallholder rice irrigation schemes to work

is TZS333.9 bil for 2013 – 2015

TZS252,756 mil TZS68,701 mil TZS12,435mil

16 749

8 8064 507

77 845

9 027

04 548 3 275 3 439

134 160

31 595

0

19 45415 997

4 489

0

20 000

40 000

60 000

80 000

100 000

120 000

140 000

160 000

2013 2014 2015

Bu

dg

et

req

uir

ed

(T

ZS

mil

)

Private sector

Public (DE)

Public (RE)

DP (DE)

DP (RE)

Assumption: 5% inflation per annum

116

Optional model - Block farming via equity

Benefits

▪ The benefits of the block farm professionally managed are. THIS IS A WEALTH CREATION MODEL

▪ This model is applicable to both small holder and commercial out grower model

– The farmers still maintain the ownership of their land. Each farmer has a CCRO which s/he uses to buy shares in their new company

which will manage the farm.

– The farmer organization is registered as a company limited by shares. The farmers with farms in the block are the shareholders

– Farmers are relieved from the hassles of farm activities and they get extra income by employing professional managers

– The whole block grow one agreed variety with a market value

– The professional management organizes bulk inputs and the farm operations on GAP, new technologies like SRI are adhered and

use of pivotal irrigation.

– Productivity of paddy 8 tons / ha or ( 30 bags per acre) is assured and farming become COMPETITIVE and production is increased

– Farmers get more income from the same area of land . Production increase more than 300%.

– The farmers organization can as well engage effectively with other value chain actors and become more competitive in a market place

Current Situation

Each farmer has a small plot of different shapes and

sizes

Block Farming with Professional management

200 Farmers with farms close to each other merge

their farms to form a BLOCK farm which is managed

as a one farm

117

Block farming model development process

Steps Steps cont …

▪ The farmers are sensitized to understand the model and voluntarily AGREE to CHANGE (Investing in People and Not things)

▪ All the farmers’ plots are surveyed using GPS and each gets a CCRO. The small scale farmer legally owns his/her farm and is empowered to use it to become rich

▪ The farmers with farm plots in one area form a farmer group and agree to AGGREGATE their plots into ONE BLOCK FARM

▪ Several farmer groups form a farmer organization which is registered as a Company or a TRUST

▪ The farmer organization employs a Professional manager to manage the scheme.

▪ The farmer organization/ company under professional management applies for loan from the bank to cover all farm operations

▪ The professional manager employs people to perform farm operations. Every hard working person in the village/ scheme gets employment. This means a farmer will be paid to work on his/her own farm

▪ If there is a labor shortage people can be employed from other villages

▪ The produce from the scheme is stored in a WAREHOUSE and marketed collectively

▪ The big volumes of paddy/rice gives a scale for the bargaining power of farmers is increased and the prices are competitive;

▪ The Scheme warehouses will be be a marketing centre or linked to a commodity exchange

▪ The equity in the company is divided among farmers /shareholders according to the number of acres each farmer has in the block

▪ The revenue from the sale of rice from the block is divided according to the shares the farmer owns in the company

118

Commercial farming


25 Commercial


1

78 Professionally


2

275 Collective


3

agriculture lab - agriprofocus · 2014-10-29 · farming deals for paddy and sugarcane 1 78...

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