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Tanzania:Southern Highlands Food Systems

Soya Bean

Value Chain Analysis

Consultant’s Report (Main)R Trevor Wilson

1 October 2013

Captions for Front Cover Illustrations

(All Photographs by Trevor Wilson)

Clockwise from top left

Soya bean seeds ready for planting: Arusha, 30 August 2013

Preparing land for soya: Farm 8 Nachingwea, 26 December 1961

Well grown healthy soya: Kisolanza south of Iringa, 26 August 2013

Baling soya straw for livestock feed: Farm 4 Nachingwea, 5 May 1961

Maize flour reinforced with soya: Local supermarket, 29 August 2013

Tanzania Southern Highlands Food Systems i

WHAT THEY SAY

Future prospects for the soybean in Tanzania are absolutely bright

Mmbaga 1975

I am very happy that I planted soybeans, even though not many farmers plant it. I am happy because it

has fetched me more income than the normal beans

Marcianna Nyirarukundo, a mother of three children in Kayonza district, Rwanda:

Soy is one of the few plants that provides a complete protein as it contains all eight amino acids

essential for human health

http://www.soyatech.com/soy_facts.htm

In comparison to many of today’s major food sources, soybeans are truly a nutritional superpower.

They contain the highest amount of protein of any grain or legume, and substantial amounts of fat,

carbohydrates, dietary fiber, vitamins, minerals and a virtual drugstore of phytochemicals useful for

the prevention and treatment of many chronic diseases

http://www.soyatech.com/soy_health.htm

Soya meal, the residue after the extraction of the oil, is a very rich protein feeding stuff for livestock

Purseglove 1972

Cocoa, coffee, rice, palm oil and soya bean underpins environmental destruction and biodiversity loss

Donald 2004

http://www.soyatech.com/soy_facts.htm

http://www.soyatech.com/soy_health.htm

ii Soya Bean Value Chain Analysis

List of Contents

WHAT THEY SAY i

ACKNOWLEDGEMENTS vi

CURRENCY EXCHANGE RATE vi

ABBREVIATIONS AND ACRONYMS vii

GLOSSARY OF KISWAHILI WORDS AND PHRASES ix

EXECUTIVE SUMMARY xi

1. INTRODUCTION 1

1.1 Background of the Study and Objectives 1

1.2 Methodology 2

1.3 Brief Overview of the Value Chain 2

1.3.1 Why soya? 2

1.3.2 The value chain 3

2. END-MARKETS 6

2.1 National Market 6

2.2 Export Markets 7

3. THE SOYA BEAN VALUE CHAIN 9

3.1 Overview 9

3.2 The Value Chain Map 9

3.2 Technology Generation 12

3.3 Input Supply and Demand 12

3.4 Production 16

3.4.1. Overview 16

3.4.2. Area planted and unit area yields 16

3.4.3. Genetic resources 18

3.4.4. Soya bean output 20

3.4.5. Profits from production 23

3.5 Processing 23

3.5.1 Overview 23

3.5.2 Marketing 25

3.5.3 Home use 25

3.5.4 Fortified foods and other speciality products for human use 26

3.5.5 Animal feed 29

3.5.6 Hindsight 31

3.6 Wholesale and Retail Distribution 31

3.7 Target Group Considerations 31

Tanzania Southern Highlands Food Systems iii

4. SYSTEMIC CONSTRAINTS AND UPGRADING OPPORTUNITIES 33

4.1 Related to Business Enabling Environment 33

4.1.1. Doing business 33

4.1.2. Legislation and regulations 33

4.1.3 Land rights and land markets 35

4.1.4 Government policy for the soya bean and general crop production 35

4.1.5 Food safety and quality 38

4.1.6 Public infrastructure 39

4.2 Related to Vertical and Horizontal Linkages and Value Chain Governance 40

4.2.1 Integration 40

4.2.2 Governance 41

4.3 Related to Support Services 41

4.3.1 Overview 41

4.3.2 The Cereals and Other Produce Board 41

4.3.3 Value chain finance 42

4.3.4 Insurance 43

4.3.5 Research services 43

4.3.6 Extension services 44

4.3.7 Seed supply 45

4.3.8 Market information 45

4.3.9 Transport 46

4.3.10 International and Non-Governmental Organizations 48

5. VISION AND STRATEGY FOR IMPROVED COMPETITIVENESS AND GROWTH 49

5.1 Vision 49

5.2 Strategic Issues Synthesis 49

5.2.1 Existing policies, strategies and programmes 49

5.2.2 SWOT analysis 51

5.3 Value Chain Competitiveness Strategy 51

5.4 Proposed Strategy Components 52

5.4.1 Sustainable use of land, water and other natural resources 52

5.4.2 Public and private sector investment and financing 53

5.4.3 Improved efficiency in production, marketing and processing 54

5.4.4 Support services (research, extension, training and dissemination of information)

54

5.4.5 Capacity building and empowerment all along the chain 54

5.4.6 Chain governance, regulatory and institutional arrangements 55

5.4.7 Cross-cutting and cross-sectoral issues 55

ANNEX 1 TERMS OF REFERENCE

ANNEX 2 WORK PROGRAMME

ANNEX 3 STAKEHOLDERS MET

ANNEX 4 DOCUMENTS CONSULTED

ANNEX 5 TIMELINES – THE RISE AND FALL OF A MINOR PROTEIN/OILSEED CROP,

1907-2013

iv Soya Bean Value Chain Analysis

ANNEX 6 PRODUCTS CONTAINING SOYA BEANS IMPORTED INTO TANZANIA

ANNEX 7 PARTIAL LIST OF SOYA BEAN PROCESSORS AND PRODUCTS IN TANZANIA

ANNEX 8 POULTRY FEED MANUFACTURING ENTERPRISES IN TANZANIA

ANNEX 9 SOME ACTIVITIES OF THE SOYA NI PESA PROJECT IN THE ROMAN

CATHOLIC DIOCESE OF NJOMBE

ANNEX 10 INTERNATIONAL FUNDING OBTAINED BY TANFEEDS OF MOROGORO

Tanzania Southern Highlands Food Systems v

List of Tables

Table 1 Development conditions and projected demand for soya beans in Tanzania 6

Table 2 Simple listing of supply and service participants in the Soya Bean Value Chain 11

Table 3 Participants and functions in the Soya Bean Value Chain 11

Table 4 Banks operating and providing loans in the Southern Highlands 16

Table 5 Genetic resources of soya bean in use at various times in Tanzania, 1957-2013 18

Table 6 Recent soya bean production and potential area and output increase in Tanzania regions 21

Table 7 Targets for area planted, output, proportion processed and exported and seed production

of soya beans, 2010-2020 22

Table 8 Theoretical gross margin analyses for smalholder soya production in the

Southern Highlands 23

Table 9 Theoretical gross margin analyses for participants in the soya bean value chain 30

Table 10 Projected targets with full implementation of TSDS, 2010-2020 37

Table 11 Components and activities of the Tanzania Soybean Development Strategy (TSDS) 49

Table 12 Existing policies, strategies and programmes of relevance to the soya bean value chain 50

List of Figures

Figure 1 A well grown crop of soya at Makuta Farm south of Iringa 3

Figure 2 Value and amount of exports of soya beans from Tanzania, 1961-2011 8

Figure 3 The Soya Bean Value Chain in Tanzania 10

Figure 4 Agro-vet retail outlet in Tunduma selling a range of seeds, fertilizers and

crop health products 14

Figure 5 Area planted to soya bean in Tanzania, 1961-2011 17

Figure 6 Comparison of world annual average soya bean yields with those in Tanzania 17

Figure 7 Soya bean genetic resources in Tanzania: lines under test at Uyole

Agricultural Research Institute) 20

Figure 8 Soya bean genetic resources in Tanzania: good nodulation on the Dina variety

and poor germination and slow growth in Squire possibly caused by poor nodulation,

both in Ihemi cluster) 21

Figure 9 Trends in annual production of soya bean in Tanzania, 1961-2011 22

Figure 10 Representative examples of pathways followed from point of production to final use

for soya bean and its products 24

Figure 11 Steps involved in home processing of raw soya beans to soya milk

as described by a smallholder lady farmer 26

Figure 12 A range of soya products produced in Dar es Salaam in the retail outlet

of the processor 27

Figure 13 An electric powered expeller of the type that can be used for soya bean processing 28

Figure 14 Soya oil and expeller cake processed in Morogoro from local whole soya beans 30

Figure 15 Doing business in Tanzania 33

Figure 16 The food safety policy of Power Foods Ltd, Dar es Salaam 38

Figure 17 Traffic anarchy at a weighbridge on the Dar es Salaam-Morogoro trunk road 39

Figure 18 Wholesale prices of food crops in Tandala market, Dar es Salaam for the period

June 2012-June 2013 47

vi Soya Bean Value Chain Analysis

List of Boxes

Box 1: The Southern Agricultural Growth Corridor of Tanzania (SAGCOT) 4

Box 2: Let them eat cake – supplements and concentrate feed manufacture 15

Box 3: Small is beautiful – an Arusha home-based initiative supplying foods fortified with soya 28

Box 4: Is bigger better? – a Dar es Salaam medium scale enterprise producing soya foods 29

Box 5: Sound and fury – over regulation and under enforcement of crop trade activities 34

Box 6: ‘KILIMO KWANZA’ – The Principal Points and the Ten Pillars 36

Box 7: Objectives of the Tanzania Soybean Development Strategy 37

Box 8: Onwards and ever upwards -- Interchick, a vertical integration model for poultry production

and processing 40

Box 9: Uyole Agricultural Research and Training Institute 44

Box 10: Put your money where your mouth is - incentives available to investor

under the Tanzania Investment Act 53

§ § § § § § § § § § § § § § §

ACKNOWLEDGEMENTS

Thanks are due first to all those participants in the soya bean value chain who agreed to meet and have

discussions with the Consultant (having for the most part met and had discussions with innumerable

predecessors) and sharing their views as well as their hopes and fears with him: many of these are listed

in Annex 3 which provides a listing of the people met during the course of the study.

Many documents have been written on soya beans and their value chain. This report has drawn deeply

on these earlier documents and in particular for its strategic interventions on the Tanzania Soybean

Development Strategy.

The Consultant responsible for writing this report thanks Michael Winklmaier, Chief Technical Adviser

of the Southern Highlands Food Systems Programme and his office staff for all the help provided over the

course of the study. He also thanks Diana Templeman, FAOR Tanzania for her support before and during

the study, Joan Kimirei, National Consultant for assistance during an extended trip up-country and Peter

Jimbuku driver extraordinary and general factotum.

§ § § § § § § § § § § § § § §

CURRENCY EXCHANGE RATE

US$ 1.00 = Tanzania Shillings (TSh) 1600 approximately in September 2013

Tanzania Southern Highlands Food Systems vii

ABBREVIATIONS AND ACRONYMS

AfricaRice Africa Rice Center (formerly the West Africa Rice Development Association (WARDA))

AGG Agricultural Green Growth

AKIRIGO Kilombero High Quality Rice Growers Organization

ALM Agricultural Sector Lead Ministries

ARI Agricultural Research Institute

ASA Agricultural Seeds Agency

ASARECA Association for Strengthening Agricultural Research in Eastern and Central Africa

ASDP Agriculture Sector Development Programme

ASDS Agricultural Sector Development Strategy

AVRDC World Vegetable Research Centre (acronym from previous title of Asian Vegetable

Research and Development Centre)

BRELA Business Registrations Licensing Agency

CAADP Comprehensive African Agriculture Development Programme

CAMARTEC Centre for Agricultural Mechanization and Rural Technology

CGIAR Consultative Group for International Agricultural Research

CIAT Centro Internacional de Agricultura Tropical (International Centre for Tropical

Agriculture)

CPD Continuing Professional Development

CRDB Cooperative Rural Development Bank

CRS Catholic Relief Services (also sometimes known as Caritas)

DAADP Comprehensive African Agriculture Development Programme

DRC Democratic Republic of Congo

DRT Department of Research and Training

EAC East African Community

EAGC Eastern Africa Grains Council

EAIRO East African Industrial Research Organization

EBT Exim Bank (Tanzania)

FAO Food and Agriculture Organization

FBO Faith Based Organization

FDI Foreign Direct Investment

FEWS NET Famine Early Warning Systems Network

GAPEX General Agricultural Products Export Company (GAPEX)

GDP Gross Domestic Product

GM Genetically modified, Genetic modification

IITA International Institute of Tropical Agriculture

IRDP Institute of Rural Development Planning (IRDP)

IRRI International Rice Research Institute

KATRIN Kilombero Agricultural Research and Training Institute

MATI Ministry of Agriculture Training Institutes

MFI Microfinance Institutions

MITM Ministry of Industries, Trade and Marketing

MKUKUTA National Strategy for Growth and Reduction of Poverty II (NSGRP II: MKUKUTA is the

Swahili acronym)

MLFD Ministry of Livestock and Fisheries Development

MUCCOBS Moshi University College of Cooperative and Business Studies

MWI Ministry of Water and Irrigation

NADO Njombe Agricultural Development Organization

NALPIG National Agriculture and Livestock Extension Policy and Implementation Guidelines

NARS National Agricultural Research System

viii Soya Bean Value Chain Analysis

NBC National Bank of Commerce

NBS National Bureau of Statistics

NGO Non-Governmental Organization

NMB National Microfinance Bank

NMC National Milling Corporation

NPS National Panel Survey

NSCU National Soybean Coordinating Unit

NSRGP National Strategy for Growth and the Reduction of Poverty

OCHA United Nations Office for the Coordination of Humanitarian Affairs

OFC Overseas Food Corporation (the “Groundnut Scheme”)

ORP Oilseeds Research Programme

OUT Open University of Tanzania

PASS Private Agricultural Sector Support Programme

PHS Plant Health Service

PMO-RALG Prime Minister’s Office-Regional Administration and Local Government (PMO-RALG)

PPP Public-Private Partnership

R&D Research and Development

RATIN Regional Agricultural Trade Intelligence Network

RUDI Rural and Urban Development Initiatives

RUTF Ready to Use Therapeutic Food

SACCOS Savings and Credit Cooperative Society

SADC Southerna Africa Dvelopment Community

SAGCOT Southern Agricultural Growth Corridor of Tanzania

SIDO Small Industries Development Organization

SME Small and Medium Enterprises

SPS Sanitary and Phytosanitary

SUA Sokoine University of Agriculture

SUIT Special Units for Implementation

TAC Tanganyika Agricultural Corporation

TAFMA Tanzania Animal Feed Manufacturing Association

TASTA Tanzania Seed Traders Association

TBS Tanzania Bureau of Standards

TDV Tanzania Development Vision 2025

TFDA Tanzania Food and Drugs Authority

TIB Tanzania Investment Bank

TIN Tax Identification Number

TIRDO Tanzania Industrial Research Development Organization

TOSCI Tanzania Official Seed Certification Institute

TPB Tanzania Postal Bank

TPRI Tropical Pesticides Research Institute

TRA Tanzania Revenue Authority

TSDS Tanzania Soybean Development Strategy

USAID United States Agency for International Development

UDSM University of Dar es Salaam

UNICEF United Nations Children’s Fund

USDA United States Department of Agriculture

WARDA West Africa Rice Development Association

WEF World Economic Forum

WFP World Food Programme

ZARDEF Zonal Agricultural Research and Development Fund

ZSC Zonal Steering Committee

Tanzania Southern Highlands Food Systems ix

GLOSSARY OF KISWAHILI WORDS AND PHRASES

(most of these in the text are placed between single quotation marks)

dagaa sun dried small fish, mostly from Lake Victoria (a much valued human food that

is also used as a major protein source in animal feeds: sometimes quaintly

translated as “sardine” to distinguish it from commercial fishmeal)

kilimo kwanza agriculture first

lishe literally “feed”: in this context, cereal flours fortified with soya

soya ni pesa soya is money

tuborishe chacula let’s improve food, let’s make food better

ugali thick maize porridge

uji thin maize gruel

x Soya Bean Value Chain Analysis

Tanzania Southern Highlands Food Systems xi

EXECUTIVE SUMMARY

The soya bean value chain extends from the primary producer to the consumer whether this latter be a

human being making use of soya and its products to improve his or her diet or an animal whose diet is

being improved by its owner. Producers are overwhelmingly in the traditional systems who grow a small

area of soya mainly as a diversification crop and use the product for their own consumption or for sale to

contribute to household income. There is little large scale production although there is increasing interest

by this class of farmer who not only sees the crop as a means of diversification but also as a contributor

(through nitrogen fixation) to improved soil fertility and better structure. Large farmers are also aware

of the current and future industrial demand for a high quality protein to be incorporated in to animal feeds.

The limited area of production is exacerbated by fluctuating but generally low yields that are due in the

smallholder sector to poor crop management and little use of fertilizer and on both small and large scale

farms by the limited availability of quality seed and the absence of adapted varieties (only two varieties

are officially certified for use in Tanzania). The Southern Highlands – particularly the area around Songea

and Njombe for smallholder production and the “Ihemi Cluster” south of Iringa for large scale production

– are the foci of most soya cultivation. There is increasing demand for soya for use as a fortifier in human

foods and there is an active cadre of small to medium scale entrepreneurial processors (mostly women)

servicing this requirement. Similarly there is a growing demand for soya as an ingredient in animal

(especially poultry) feeds. Much of the demand for animal feed is met by imports of meal or cake from

India and from neighbouring Zambia, Malawi and Uganda. Current national production is estimated

(more likely guessed) at 5000 tonnes per year from about 5000 ha of land. The official Tanzania Soybean

Development Strategy projects (unrealistically) production of 2.0 million tonnes of soya from 1.4 million

ha with 40 per cent being used for processing and 35 per cent for export by 2020. The potential for greatly

increased production and for export is, nonetheless, enormous. Tanzania has natural resources suitable

for soya bean production and the country is well placed geographically to supply external demand. It has

so far failed to capitalize on its natural comparative advantage and there have been virtually no exports

of beans or meal.

The value chain includes a large assemblage of participants at several levels. These include smallholder

and large scale primary producers, brokers (who put producers in contact with potential purchasers, agents

(who buy and sell often to order for processors), dealers (who buy and sell often without handling any

product), small and medium scale processors (and their staff and labourers) who use soya as an additive

to staple foods, animal feed manufacturers, importers, wholesalers, institutional customers (World Food

Programme, Save the Children, retailers (supermarkets and small shops) and consumers. To these may

be added suppliers of inputs, research and extension workers and policy makers. There are as few as two

links between the producer and the plate but there may be up to ten transactions before the final product

gets to the consumer. Most participants seem to operate on low margins although the biggest profits

appear to be between the processor and the wholesaler and the wholesaler and retailer. Sales of product

are almost all by individual bargaining in one-on-one situations but local prices – which fluctuate

considerably within and between years – are known to both sellers and buyers and deals are usually

concluded quickly and amiably. Very little use is made of new technology at smallholder producer level

but large scale producers are generally well mechanized throughout the production cycle and make use

of appropriate fertilizers. Technology in the small producer enterprises is also basic including mostly

manual operations for packaging, sealing containers and labelling. Many of the smaller processors have

not yet adopted bar coding as a means to differentiate their products and assure traceability.

A recent analysis of global food security placed Tanzania in 99th place among 105 countries with four of

the six countries below it being contiguous (Burundi, Democratic Republic of Congo) or near (Ethiopia,

Chad) neighbours. According to the World Bank Tanzania ranks 127 out of 183 countries in doing

business with the regional average being 137. Concurrently the World Economic Forum finds Tanzania

xii Soya Bean Value Chain Analysis

to be one of 37 factor-driven economies and ranks it 120 (down from 113 the previous year) out of 142

and cites the major reasons for this lowly position, in order of priority, as access to finance, corruption,

tax rates, inadequate infrastructure, inflation and inefficient government bureaucracy. This does not bode

well for encouraging external nor internal investment in new or the expansion of existing businesses.

Tanzania is widely regarded as a country with a heavy regulatory burden that is only lightly implemented.

Participants in agricultural value chains are subject to an onerous regime of form-filling and permissions.

Multiple – and often conflicting – legal instruments under the jurisdiction of multiple ministries and other

official bodies impinge upon the agricultural, trading and marketing sectors. In general, however, value

chain participants are ignorant of the laws or choose wilfully to ignore them, being virtually safe from

sanction as they know the responsible authorities are in no position (financially and materially) to enforce

them. The Tanzania Soybean Development Strategy (such a strategy or policy has been developed for

each crop and livestock species in the agricultural sector) is designed to stimulate soya bean production.

In addition to aspiring to a production of 2.0 million tonnes in 2020 it is the aim of the to increase soya

bean consumption from 0.5 kg per person per year to 15.0 kg per year, increase local soya bean processing

into various products, ensure a significant increase in the contribution of soya bean to poverty reduction,

malnutrition, employment and national GDP and increase Tanzania’s competitiveness as a soya bean

producer and exporter in Africa and worldwide. The strategy emphasizes the importance of competitive

markets including commercialization, value added products and sustainable development and is said to

be amongst many of Tanzania’s initiatives to invite and open doors for private sector investments.

Weak horizontal and vertical linkages affect the whole chain. Participants and enterprises do not

cooperate or coordinate (indeed the latter seems to be a totally alien concept). The capacity to influence

domestic policy as well as more mundane aspects such as collective access to inputs and other service is

thus limited. In summary both horizontal and vertical integration remain marginal. The soya bean value

chain can be considered to be a “market-type governance” with many producers and many traders and

local retailers. Relationships among stakeholders in the value chain are mainly determined by the price

at which the product is sold. Coordination is required for the whole chain encompassing all participants

to generate communication and trust. The Southern Highlands Soya Bean Value Chain is largely driven

by market forces with respect to prices and their up- and down-stream effects on supply and operations

throughout the chain. The major issues include lack of governance, poor supervision of lower-end

associations, many small participants and small transactions, lack of market coordination, unclear and

conflicting roles and mandates in district councils, weak industry associations and inadequate or non-

enforcement of operating procedures.

Research on soya beans has been very limited. Extension services are poor with not very well trained and

poorly equipped staff. The ratio of service providers to service receivers is low. The transfer of extension

services from the centre to local authorities in the name of devolution has had an even further negative

effect on the provision of services.

Among the strengths of soya beans are near organic production suitable for niche markets, cheap local

high quality protein (40-45 per cent), oil (23 per cent) in strong demand worldwide, very suitable as

nitrogen fixer for inclusion in cereal rotations, as human food high in lecithin, calcium, phosphorous and

fibre, low in saturated fats, free of cholesterol, suitable for “fortifying” traditional staple foods, stores well

and is an almost ideal protein source in animal feeds, especially poultry.

Counteracting the strengths are weakness which that the value chain is weakly developed and fragmented,

there are few producer or processor organizations, the crop is relatively unknown in Tanzania, there is

little “management” by producers, there are inadequate road services in remote areas that lead to high

transport costs over long distances, very little research and extension on varieties and agronomy and there

are very few adapted varieties (only three are authorized for release in Tanzania) and a lack of quality

seeds.

Tanzania Southern Highlands Food Systems xiii

Opportunities exist in the organization of segments or of whole value chain into groups/associations to

strengthen powers (“empowerment”), there is rising internal demand for human food (awareness of health

benefits, individual consumption and population growth), Tanzania’s yung population (promises more

consumption in future), value can be added to basic product through differentiation, the crop is a

potentially important supplier of quality protein to human and animal diets, there is good potential for

rapid growth and agriculture is a national priority (‘kilimo kwanza’ = agriculture first).

Threats to development are high interest rates and unstable macroeconomic environment (exchange rates

and inflation), climate change may affect some aspects of production, imports have a negative effect on

local value added processing, there is competition from large overseas producers and there is little real

government support.

The problems of the industry are widely known as are the solutions. The quandary is to apply the latter

to the former. If this can be done the Vision could be:

By 2025, a more efficient and sustainable soya bean chain supplying raw materials for

fortification of human food and high quality protein for incorporation into animal feeds. It also

creates additional employment and contributes to increased incomes, reduced poverty, improved

food security and a better quality of life for all Tanzanians.

Strategic elements to improve the competitive status of the soya bean value chain include:

! improving knowledge, skills and information throughout (and before) the chain

(agriculture in schools, producer training, business training);

! promotion and strengthening of groups and associations throughout the chain to

encourage vertical and horizontal integration and to provide the industry with a “voice”;

! improving existing and providing new physical infrastructure to support the growth of

profitable agriculture and generate employment;

! development, equitable deployment and retention of human resources especially in the

livestock extension and animal health delivery services;

! promotion and adoption of science and technology including research and development

for high quality and nutritious food;

! strengthening and introduction of investment in infrastructure including for farm level

agroprocessing and physical market infrastructure;

! collection, collation and transparent and widespread dissemination of market information

including volumes of trade and prices;

! promotion of fair and competitive farm gate prices;

! strengthening of the links between farmers and markets and higher up the chain for

domestic, regional and global markets;

! promoting private sector investment and encouragement of public-private partnerships

(although great faith is placed on privatization and private sector investment it is not a

panacea)

! increasing the amount, broadening the range and improving the quality of processed soya

(fortified) products;

! ensuring that Tanzania’s soya products are produced (and can be verified as having been

produced) to international standards of food safety;

! facilitating access to finance and credit including links to capital and short term markets

and introducing insurance for crops;

! mitigating and adapting to the effects of climate change (research programmes to improve

existing and develop new technologies);

xiv Soya Bean Value Chain Analysis

! promotion of measures to cushion producers from the effects of drought and

strengthening of the Famine Early Warning System (FEWS);

! ensuring that land tenure arrangements for both traditional producers and those wishing

to invest in large scale production are favourable to long term investment; and

! implementing the National Strategy on Agriculture and HIV/AIDS to support increased

white meat production.

Strategic areas that need to be addressed include:

! sustainable use of land, water and natural feed resources;

! public, private and public/private sector investments and financing;

! improvement of the productivity and efficiency of production (including provision of

improved genetic material (varieties)), marketing and processing (and especially for small

scale processing of fortified human foods);

! rendering more effective the support services including research, extension, training and

dissemination of information;

! general capacity building (including linking large farmers to outgrower schemes) and

empowerment all along the chain;

! chain governance, regulatory and institutional arrangements; and

! cross-cutting and cross-sectoral issues.

Tanzania Southern Highlands Food Systems 1

White Meat (pigs and poultry) and Soya Bean subsectors have subsequently been added: throughout this1

report we have preferred to use “soya bean” rather than “soybean” other than in direct quotes or citations.

1. INTRODUCTION

1.1 Background of the Study and Objectives

The Southern Highlands Food Systems (SHFS) Development Programme comprises two projects – URT

132 “Food Systems Development in Tanzania” and URT 133 “Advisory Services Capacity Development

in Support of Food Security in the United Republic of Tanzania”. These were combined in 2010 with the

object of improved implementation. Both projects are closely aligned with the Government of Tanzania’s

Agricultural Sector Development Strategy (ASDS) that is designed to put in place a policy environment

more favourable to private investment in agriculture and provide sector-specific policies having a bearing

on agricultural productivity and profitability.

The overall project outcome for URT 132 is defined as “Public and private organisations and food chain

actors have improved capacity to coordinate, plan and support food chain and business development in

the rice, maize, edible oil and red meat sub-sectors of the Southern Highlands” . In order to achieve this1

outcome, the project has five major outputs:

! Output 1: Sub-sector specific strategies and priorities identified;

! Output 2: Public-private sector coordination and capacity strengthened;

! Output 3: Best practises for new market mechanisms promoted;

! Output 4: Food-chain innovation capacity strengthened; and

! Output 5: Strategies to improve capacity utilization of agro-processing facilities identified

The envisaged outcome for URT 133 is “Enhanced capacity of advisory service providers and farmers in

farm management and marketing to enable them to respond better to market opportunities”. This project

is also expected to contribute to Government restructuring efforts by focussing on market oriented

extension. The interventions are expected to enhance farm profitability and competitiveness and the

income derived from farming operations through four outputs:

! Output 1: Awareness of policy makers and programme managers to market oriented

agricultural extension and knowledge of “good practices” heightened and realized;

! Output 2: Capacity of advisory service providers in farm management and marketing at

central, district and ward levels developed;

! Output 3: Capacity of smallholder farmers and farmer groups developed; and

! Output 4: Linkages between producer groups, private agricultural service providers and

financial institutions and market outlets established.

Value chain analysis thus cuts across both projects and their outputs.

The major objectives of the study were to:

! identify strengths and bottlenecks in production, processing, marketing and the

institutional environment of the Tanzania soya bean industry and establish links amongst

performance drivers along the value chain with efficiency/competitiveness issues;

! present and take part in a validation workshop with public and private sector stakeholders

on the results of the assessment;

! propose strategic interventions to government and private sector stakeholders regarding

the improvement of organization and performance of the soya bean chain with a view to

increasing efficiency and competitiveness; and

! prepare a publishable report on the “Tanzanian Soya Bean Value Chain Analysis”.

2 Soya Bean Value Chain Analysis

Neonotonia wightii (Am.) Lackey (formerly Glycine javanica L.), known as ‘fundofundo’ in parts of2

Tanzania, is a native herbaceous perennial with a strong taproot and trailing, climbing and twining stems: it is a

constituent of high animal feed value in many pastures in drier areas.

1.2 Methodology

The soya bean value chain analysis was undertaken in the period 9 August to 15 November 2013,

including a field mission in Tanzania from 13 August to 24 September 2013 in support of the Food and

Agriculture Organization (FAO) Programme “Tanzania Southern Highlands Food Systems”. The Mission

was conducted according to Terms of Reference furnished by FAO (Annex 1). During a comprehensive

work programme (Annex 2) meetings and discussions were held with stakeholders across the whole

spectrum of the sector (Annex 3) and many documents were consulted (Annex 4).

In brief the methodology of the study comprised:

! a thorough review of the literature and study of secondary data covering, inter alia, trends

in production, consumption and trade, yields, prices, concentration of production,

capacity utilization and description of the linkages within the soya bean value chain;

! limited collection of primary data through a series of field visits and detailed discussions

with stakeholders in both the public and private sectors;

! identification of key constraints limiting sector competitiveness and development; and

! identification and elaboration of policy options.

The range and breadth of the literature sources in Annex 4 show the wealth of data on the soya bean food

chain. Much of it, however, predates the mid 1980s and much of it is qualitative. There is such disparity

among quantitative data sources that its reliability and indeed its usefulness is open to doubt: data

presented in this report should thus be considered indicative rather than definitive.

1.3 Brief Overview of the Value Chain

1.3.1 Why soya?

The soya bean Glycine max (L.) Merr is a legume native to East Asia . It is classed as an oilseed and not2

as a pulse by FAO. Soya exhibits variable growth from heights of less than 0.2 to 2.0 m (Figure 1). Pods,

stems and leaves are covered with fine hairs. The leaves fall before the seeds mature. Seeds are very

variable in size and colour.

Among the multiple reasons for increasing the area of soya are: it provides a cheap source of locally

grown protein (40-50 per cent) and quality oil (~ 23 per cent) with high commercial value; soya is an

important human nutritional supplement especially for certain “at risk” groups as it is free of cholesterol,

high in calcium, phosphorous and fibre, low in saturated fats and contains isoflavones (anti-cancer

compounds; the current and expanding role of soya as an ingredient in commercial livestock feed; an

increasing number of small and large scale farmers growing or wanting to grow soya; rapidly increasing

long term national and global demand; nitrogen-fixing properties and effects on soil fertility and structure;

an excellent break crop in predominantly cereal rotations; fewer pests and diseases than other legumes

(although is a potential and increasing problem; grain resists ingress of water and stores well at low

moisture contents; suitable soils and climate in many parts of the country and especially in the Southern

Highlands; and international support for research for improved soya varieties and agronomy.

This combination of factors endows soya with the capacity for rapid and widespread expansion of

production.


Figure 1 A well grown crop of soya at Makuta Farm south of Iringa (Photo: Trevor Wilson)

1.3.2 The value chain

Soya bean is, and always has been, a minor crop in Tanzania. It contributes, nonetheless, to national and

household food supply, provides income, adds diversity to arable production systems and (as it is a

legume) fixes nitrogen that improves soil fertility and condition. Much of Tanzania is suitable for

cultivation of the soya bean and it is indeed grown in most areas. Favoured areas, however, are the

Southern Highlands (Iringa, Mbeya, Rukwa and Ruvuma Regions), Morogoro Region, the southern Lindi

and Mtwara Regions and the northern Arusha, Kilimanjaro and Manyara Regions. Most soya is grown

by smallholder farmers under rainfed conditions in small plots using local or “nondescript” varieties that

are produced from home saved seed and using traditional husbandry methods. Some larger mechanized

farms in the Ihemi Cluster of the Southern Agricultural Growth Corridor of Tanzania (SAGCOT) (Box

1) already grow, or have well advanced plans to grow, soya bean: these are or will be partially integrated

operations with some degree of processing and organized marketing. Soya bean contributes little to

Agricultural Gross Domestic Product (GDP) at present but has great potential to bestow much more.

Annual production of grain soya in the early twentyfirst century has been in the range of 3000-5000 tonnes

from a cultivated area of 5000-6000 ha.

Production of soya bean is effectively entirely for the domestic market but the supply is considerably less

than the demand. There are formal imports, mainly from India and neighbouring countries to overcome

the deficit and there are also some “informal” imports from Tanzania’s contiguous states.


Box 1: The Southern Agricultural Growth Corridor of Tanzania (SAGCOT)

“SAGCOT is about doing things differently to get things done and to make a real difference.

This is about business as unusual.”

SAGCOT is an agricultural public-private partnership that is designed to develop the Corridor’s agricultural

productivity and profitability. SAGCOT was initiated at the World Economic Forum (WEF) Africa summit of

2010 with the support of founding partners including farmers, agribusinesses and companies from across the

private sector together with the Government of Tanzania. The SAGCOT Investment Blueprint was launched

nationally by Prime Minister Pinda in Dar es Salaam and internationally by H.E. President Kikwete at the WEF

in Davos in 2011.

SAGCOT’s mandate is to mobilize private sector investment. SAGCOT’s general objective is to foster

inclusive, commercially successful agribusinesses that will benefit the region’s small scale farmers. In so doing,

it will improve food security, reduce rural poverty and ensure environmental sustainability. The specific

objectives are to:

! provide opportunities for smallholder producers to engage in profitable agriculture including

fostering strong links between smallholders and commercial agribusinesses, through

outgrower schemes;

! strengthen smallholder producer associations; and

! increase the area under irrigation.

The risk sharing model of a Public-Private Partnership (PPP) approach has been demonstrated to be successful

in achieving these goals and SAGCOT marks the first PPP of such a scale in Tanzania’s agricultural history.

The corridor concept developed by SAGCOT aims to link the central infrastructure ”spine” of road and rail

(running from the port of Dar es Salaam through Morogoro, Iringa and Mbeya to the Democratic Republic of

Congo (DRC) Malawi and Zambia) to targeted areas of high agricultural potential (the Clusters). In this way

a focussed, efficient critical mass of commercial farming (small scale, emerging or large scale) and agribusiness

can be developed.

The Investment Blueprint showcases investment opportunities in the Corridor and lays out a framework of

institutions and activities required to reap the development potential of the region. In addition to the Blueprint

the SAGCOT Greenprint focuses on Agricultural Green Growth (AGG) and identifies five priorities to create

an enabling environment for increasing green investment opportunities (conservation agriculture or precision

agriculture are such opportunities) via:

! agricultural extension;

! support for local organizations;

! systematic land and water use planning;

! producing guidelines for investment in land and agriculture; and

! a pro-AGG investment generation programme.

The SAGCOT Centre Ltd was opened for business in October 2011. The first cluster to be developed was

Kilombero where a Rice Partnership is being developed with the support of both the private sector and the

international community (especially USAID’s Feed the Future programme). The Kilombero Rice Partnership

brings together small and large scale rice farmers, including Kilombero Plantations Ltd and AKIRIGO (a small

scale farmers’ apex organisation), local, national and international agribusiness and research, extension and

demonstration operations. A Sugar Partnership is also under development in the Kilombero Cluster. The

SAGCOT Centre is now considering the Ihemi Cluster based loosely around Mafinga some 70 km south of

Iringa on the main north-south highway. The two crops selected for early development of their value chains are

soya beans followed by (Irish) potatoes. Expansion of soya bean cultivation provides one of the major

opportunities for cultivation in the Southern Agricultural Growth Corridor offering potential for import

substitution as well as for earning foreign exchange through export to regional and wider markets.


Soya is extremely important in human nutrition and is especially useful as a supplement for children and

the sick. It is also a major protein component of commercial livestock feed particularly for monogastrics.

For most applications some form of processing is required before it can be used. In Tanzania, however,

soya is not a traditional food and the transformation technology is not known. Smallholder adoption of

soy bean as a crop would be facilitated by integration of consumption into local diets but dissemination

of processing and cooking methods would be required to achieve this.

Actual or potential soya markets in Tanzania include household consumption, small and medium scale

food processors, small and medium-to-large scale animal feed processors and – in the future – exports.

Local production is dominated by small farmers who cannot benefit from economies of scale and often

make “emergency” sales for immediate needs. Small traders buy at the production point and move the

product to processors and consumers in a generally ill-defined chain. Small traders dealing in small

amounts that are subject to physical and biological degradation do little to improve the end product.

The present situation with regard to animal feed production is that processors continue to use local low

cost fishmeal (‘dagaa’) as the main protein ingredient. The associated human health risks (due to

Salmonella contamination) and the taint (“fishy taste”) imparted to poultry meat are widely accepted.

‘Dagaa’ is a lower quality protein than soya bean meal, a fact that is encouraging some feed manufacturers

to turn to international soya markets where standardized quality beans and meal are available. Import

substitution should be a further driver to increased domestic soya bean production.

The sector is extremely undeveloped with few or no horizontal or vertical linkages in the chain. Low or

sporadic demand for soya and its products and tenuous market linkages do not encourage farmers to invest

in soya production. Some beans are sold in local markets to a few consumers for use to fortify local foods

but demand for home consumption is extremely limited. Some small and medium scale soya foods and

animal compound processors already make use of domestic production. Often, however, purchases are

very small (from small scale producers) or sporadic (from medium scale producers) which inhibits their

potential function as production drivers. Processor problems are exacerbated by others that include

product quality, inappropriate buildings, qualified labour, old machinery, excessive utility costs (coupled

to unreliability of supply) and operating capital that have a negative impact on efficiency and profitability.

Direct Government research since Independence on soya bean has been limited but this continues at Uyole

in the Southern Highlands. Some new varieties have been released and others are being developed and

tested. Sokoine University of Agriculture (SUA) has also undertaken limited research on the crop. In

common with the research community as a whole, attempts to improve soya production and processing

have suffered from limited funding and outmoded equipment for many years and research and

development (R&D) have suffered as a result. Extension services for soya are particularly weak and

devolution of these from the central Ministry and its branches to local authorities (who are even more

constrained for funds than the ministry and its specialized institutions) has been a brake on expanded soya

production. Some seeds and fertilizer and crop health inputs are available at many small private outlets

throughout the highlands and indeed over most of the country but these are not specific to the soya bean..

Broad opportunities exist for enhancing the soya bean value chain from the producer to the consumer.

There is increasing interest in the crop not only from the Government of Tanzania itself but also from

international development agencies and Non-Governmental Organizations (NGO) as well as the private

sector. Models need to be developed that can be applied and multiplicated throughout the Southern

Highlands. Promoting and building the technical and financial capacity of civil society organizations

(making use of existing producer, trader and processor organizations (such as Njombe Agricultural

Development Organization (NADO), Rural and Urban Development Initiatives (RUDI) and the single-

crop Kilombero High Quality Rice Growers Organization AKIRIGO)) and assisting in the creation of new

ones as models for soya bean production, marketing, processing and use could yield huge dividends.


2. END-MARKETS

2.1 National Market

More than 99 per cent of soya beans grown in Tanzania derive from small scale traditional producers

characterized by low use of inputs and the consequent low output. Demand for soya and its products is

projected to increase in the medium to long term (Table 1) with rising incomes, adoption of more

“western” lifestyles and urbanization and the demand for animal feed will show a concomitant increase.

This will enable Tanzania to approach the output and demand of other African countries. Total soya use

is predicted to increase from the 2010-level of 0.5 kg per person to 15.0 kg by 2020.

Table 1 Development conditions and projected demand for soya beans in Tanzania

Marketsegment

Conditions and market potential for time horizons

Short term (1-4 years) Medium term (5-10 years) Long term (10-20 years)

Developmentconditions

Potential(t/year)

Development conditionsPotential(t/year)

Development conditionsPotential(t/year)

Fortified food Corn-soy blend for

WFP and others

5 000 25 g/d for half of 43% of

food deficit population (22

million)

100 620 25 g/d for half of 43% of

food deficit population (44

million)

216 000

Poultry feed Immediate substitution

of 30% of fish protein

in feed

5 400 Substitute all fish protein

with soya

18 000 Double consumption (rising

incomes and cheaper food

36 000

Increase extrusion

capacity from 8000 to

20 000 t/year

Increase extrusion capacity

to 150 000 t/year

Fullfat expeller soya

TSh 900/kg, defatted

TSh 800/kg

Fullfat expeller soya TSh

800/kg, defatted TSh 700/kg

Pig feed Promotion of soya

protein

1 000 Promotion of soya protein 5 000 Promotion of soya protein 10 000

Dairy feed Promotion of soya

protein

1 000 Promotion of soya protein 5 000 Promotion of soya protein 10 000

Whole grains 1 000 2 000 3 000

Source: adapted from M M A 2010

National demand for food, in parallel with production, is dominated by the mass of poorer Tanzanian rural

and urban households. Their buying habits have been conditioned for generations by the supply of low

quality food. A growing mainly urban middle income group is, however, beginning to be discriminative

in its buying habits and demanding better quality for which it is willing to pay a premium price. The

market for “value added” and processed soya products in Tanzania is still very limited. In response to

demand there already exists a small processing industry that is owned entirely by the private sector. The

range of products is generally small as is the production capacity. Some manufacturers specialize in

supplying a very restricted market within the overall niche market.

Niche markets require the lower links of the chain to be connected to specific markets that are closely

matched with the needs of each niche. The existing niche markets for soya products in Tanzania are those

led by existing and emerging supermarkets and some elite retail shops through branded and packaged

products which they allow onto their shelves. Possible niche markets include organic and health foods


and geographically differentiated ones with the last being distinguished by an institution, a company or

even a village. An entry point for geographic brand differentiation would be to develop, secure and

activate intellectual property rights for distinctive varieties of food products. The set of value enhancing

activities that is preliminary to entering this niche entails the prior creation and sharing of intangible assets

in the form of geographical indicators. A geographical indicator in this context is similar to a trademark

and can act as a certification that the product possesses specific qualities or enjoys a certain reputation

arising from its geographical origin. It the food source can be appropriately protected as intellectual

property it can provide farm groups with a sustainable competitive advantage

There is increasing demand for protein for inclusion in animal feeds with current demand being estimated

at 150 000 tonnes per annum. Currently there is considerable use of ‘dagaa’ but this is of variable quality

and the amount of sand in the product causes wear to machinery. Prices of ‘dagaa’ have also increased

which makes soya meal a safer alternative at a possibly lower cost. The dried fish are also likely to be

contaminated by salmonella bacteria salmonella that can cause food poisoning in people. Thus soya meal

is a preferred source of protein (and has several other nutritional advantages that are discussed later in this

report). As the local production is insufficient to supply this demand segment feed manufacturer import

by sea from India and by road from Zambia Meat consumption in Tanzania.

Increased globalization and the influence of information technology mean that more and more local

consumers have access to knowledge on health and safety issues related to food products. It is thus

important that livestock feed industries are aware of and respond to this trend. They should then produce

feeds with the desired raw materials to ensure that the final products possess acceptable standards that can

guarantee demand. If the Tanzania livestock industry is to improve its access to markets and achieve

international recognition the use of acceptable feed ingredients is one of several critical attributes that will

ensure consumer confidence.

2.2 Export Markets

The soya bean and its meal derivative are among the most important agricultural traded products in the

world. During the 52-year period 1961 to 2012 world production of soya beans rose about 10-fold from

26.9 million tonnes per year to 253.1 million tonnes per year on a harvested area that increased less than

5-fold from 23.8 million ha to 106.6 million ha (FAO 2012). In 2010 the amount of soya bean exports

around the world was 83.4 million tonnes valued at US$ 39.7 billion tonnes (US$ 425/tonne) and soya

beans occupied second place in world trade in terms of value. In addition to whole beans, 64.5 million

tonnes of soya cake were exported valued at US$ 22.7 billion (US$ 353/tonne) with this product

occupying eighth place in value in world trade (FAO 2012). The United States of America, Brazil,

Argentina and China were by far the largest producers of the crop in 2012. The first three of these

countries were also the largest exporters. China was by far the largest importer of soya and its products

followed by Japan, The Netherlands, Germany and Mexico. Current global demand for soya beans is

driven by the need for protein meals for the dairy and meat industries, World prices are mainly influenced

by those pertaining in Argentina and Brazil and at the Port of Rotterdam. The world price increased by

48 per cent in 2007/2008 due to a stagnant supply and a globally heavy demand and is expected in the

medium term to continue because of shrinking carryover stocks. Expansion of the area cultivated to soya

in South America and improvements in yield can be expected to stabilize prices up to a projected 2017-

2020.

There are no official data for exports of soya from Tanzania. The county has, however, long exported

soya beans either for comparative breeding trials in other countries or as an item of commerce (Figure 1).

In the 1960s much of the Tanzania crop, and much of this from the farms of the Overseas Food

Corporation (OFC, the “Groundnut Scheme”), was exported to the Far East. A few years later the

Japanese attempted to negotiate a concession to grow soya for export to their own country.


Figure 2 Value and amount of exports of soya beans from Tanzania, 1961-2011 (FAO 2012)

The major potential for Tanzanian soya exports is to other countries of the Southern Africa Development

Community (SADC). The needs and status of these regional countries varies. The status of Mozambique,

for example, is uncertain, Malawi and Zambia are marginal net exporters, production in Burundi and

Rwanda is for domestic consumption, Uganda is a major net exporter whereas Kenya is a major net

importer. Oman has imported oilseed flour and meal worth US$ 94 000 from Tanzania (equivalent to a

market share of 2.1 per cent) of which US$ 51 000 was for soya flour and meal and US$ 43 000 for other

oilseeds and products. There have been limited exports to China. Current export destinations can be

expected to continue to take Tanzania soya for some time but further penetration of these and of additional

markets – and the potential is enormous – is fundamental to the long term future of soya in Tanzania.


3. THE SOYA BEAN VALUE CHAIN

3.1 Overview

The value chain describes the range of activities required to move a commodity through the various stages

that bring if from the first point of production to the last point of consumption. This usually involves (an

often complex) combination of physical change, inputs from various producer services, transfer of

ownership and delivery. Commodity value chains are increasingly recognized as providing a solid

framework for the analysis of the public and private sector participants within them as well as the overall

performance of particular markets.

The soya bean value chain from supply and use of inputs, via production and processing to marketing and

retailing and on to the consumer is confounded by many technical and institutional impediments. The

chain is fragmented, unorganized, disorganized, uncontrolled (in spite, in some links, of being over-

regulated) and uncoordinated. There is an unknown but, in terms of total smallholder families, few

households involved in primary production. A very few large farms grow soy beans on a regular basis

but more of this type of production is expected. Brokers or traders operate across most links of the chain.

Some processing is done at household level and there is a (growing) number of small and large scale

commercial processors who produce both human food and animal feed with soya as an ingredient. Human

food containing soya or soy bean meal is sold in some supermarkets and smaller retail outlets. Soya in

animal feeds is used by the manufacturer or sold retail to individual livestock farmers mainly in the poultry

layer or broiler segment. The horizontal and vertical linkages of the value chain are generally weak and

uncompetitive and in need of support to strengthen them.

The soya bean value chain includes whole beans and soya bean meal. Both items are produced mainly

for the domestic market (but see Figure 2 for long term exports). Imports are almost all soya bean meal

for the livestock feed industry and small amounts of oil for cooking. Processed products are derived after

some form of treatment to extract protein (the primary case in Tanzania) or oil. Soya bean meal is the

material remaining after solvent extraction or mechanical expelling of oil from the bean and has a protein

content of about 50 per cent. The meal is “toasted” (a misnomer because the heat treatment is with moist

steam) and then ground in a hammer mill before being incorporated into animal feed. Participants in the

chain include primary producers, traders, processors, wholesalers and retailers and consumers. Most

participants are rather specialized and their functions relate to one or a very few links in the value chain.

3.2 The Value Chain Map

The value chain map (Figure 3) shows that the whole is suspended from the end user. If the link to the

rest of the chain were to be broken the whole would be susceptible to collapse. This situation is more or

less true for all other links in the chain. Each link takes the product from its immediate predecessor and

“processes” it to an output that is used by the next link. Nominally, the value of product increases at each

stage until it reaches the consumer.

It is possible to provide a succinct list of most of the participants in the chain (Table 2) but pivotal roles

are played by the middle links through which all products must pass. Many participants in the chain

(Table 3) occupy more than one role. Further up the chain some processors are also wholesalers and

retailers and operate in both the domestic and export markets. Primary producers may sell beans directly

through a market, to a trader or to a processor or may use a combination of all three outlets. A trader can

sell to another trader, directly to a wholesaler or retailer or to a processor or, again, may broaden his option

by using a combination of these channels. Processors, especially the smaller enterprises, may buy beans

directly from farmers or from traders and sell the products to wholesalers or retailers.


Figure 3 The Soya Bean Value Chain in Tanzania


Table 2 Simple listing of supply and service participants in the Soya Bean Value Chain

Core actors Service suppliers

Producers (smallholder farmers, farmer groups, large

scale farmers with possible outgrowers)

Traders and agents

Processors

Wholesalers

Retailers (shops, supermarkets)

Importers (soya meal from India and Zambia)

Research

Training and Education Institutions

Extension service

Inputs (seed, fertilizer, plant health products)

Transport

Financial services

Associations (producer, trader, processor)

Cereal and Mixed Crops Board

Table 3 Participants and functions in the Soya Bean Value Chain

Participant Functions

Producers Most soya beans are grown by traditional smallholders, mostly located in the Southern

Highlands with another group around Babati in Manyara Region, who use little technology.

Some small scale farmers are receiving support from NGOs in technology and group formation.

Large scale grower are concentrated in the so-called Ihemi Cluster of SAGCOT around Mafinga

(some already have “outgrowers” and others have plans to develop an outgrower programme.

There are other large scale producers in Arusha and Kilimanjaro Regions.

Traders Primary buyers or brokers and secondary buyer-agents operate throughout the country wherever soya isgrown. Trading usually takes place at the point of production. A majority of traders have close links withthe processors.

Processors Some large scale and numerous small and medium scale processors operate mainly in Dar es Salaam andArusha with limited presence elsewhere in the country. Processing is for inclusion in human foods asfortifiers. Numerous (as many as 500 with trading licences) small private retailers sell small quantitiesof feed and feed additives and supplements. Main products are Chick Starter (and a more expensiveversion containing a coccidiostat), Layers, Broiler Starter, Broiler Growers and Broiler Finisher: in 2013all is in the form of mash although some firms have or will shortly have pelleting capacity. There is noregular production of pig compound feeds. Many small producers buy ingredients and mix their ownconcentrate feed.

Wholesalers Most processors act as their own wholesalers although there is a limited number of independent specialistdealers.

Retailers Processors often act as their own retailers. Supermarkets are the main retail outlets although soya fortifiedfood product are also occasionally on sale in small urban and rural shops. Retailing of soya beans isusually done by recognized but informal businesses.

Input suppliers Little use is made of modern inputs by smallholders. Seeds are available in very limited quantities throughUyole, the Agricultural Seeds Agency (ASA) and other suppliers. Fertilizer and crop health products areavailable at agro-dealer shops. MAFC and the municipalities provide limited extension services.Financial services are extremely limited and available only to a favoured few.

Research Public sector research on soya is very limited. Uyole Agricultural Research Institute Mbeya has a singleresearcher working on soya. It also has responsibilities in training and extension. Some large farmersundertake their own “research”, mainly in the form of variety observation plots: one farmer iscollaborating with the Centro Internacional de Agricultura Tropical (CIAT, International Centre forTropical Agriculture) in this kind of trial.

Every link in the chain relies on goods and services in order to fulfil its role(s). At the various stages,

goods and services include land, labour, soya beans and meal, input suppliers for fertilizers and plant

health products, transport, energy and finance. Also required are clearly defined and enunciated standards

and a regulatory framework under – and applied by – law. Many of these requirements continue to be

weak or non-existent in Tanzania.


3.2 Technology Generation

Technology in soya bean production includes inputs such as seeds of improved varieties, fertilizer, crop

health products (weed killers and pest control items for insects, fungi, viruses and bacteria), machinery

use for agricultural operations and for processing and proper and hygienic presentation of products at the

retail level. Technology has a key role in improving competitiveness and especially vis-à-vis near

neighbours operating in and competing for the same environment.

Soya bean production in the Southern Highlands is of two types. The one, dominant, is based on

traditional systems that use very little modern technology on individually small areas ranging from a few

hundred square metres to upwards of one hectare in area. The other, subordinate at least for the present,

is a large scale “modern” system with areas of up to 100 ha that uses a range of inputs and operates with

modern machinery.

Several technological interventions suitable for small scale are available but for the most part they are not

used by producers and probably not even communicated to them by technical staff. Some are somewhat

sophisticated or too expensive for use at the present state of development of soya bean cultivation. Low

adoption of available technologies is caused by poor extension services, difficulties in gaining access to

the technologies (cost/location) and the low level of knowledge among most soya bean producers.

The Agricultural Research Institute-Uyole (properly the Southern Highlands’ Zone Agricultural Research

and Development Institute) has the mandate for applied research for the Southern Highlands. It is

committed to undertaking research and facilitating the adoption of appropriate technologies in the region.

Its impact is limited, however, by low staffing levels and limited budgets. Similarly the official extension

services suffer from the same problems.

Adoption of known, improved, but not over ambitious management and technological practices could,

however, bring about spectacular increases in the output and quality of soya beans and their derived

products. Amongst such practices are:

! use of seeds of high yielding varieties (these are rare in Tanzania);

! inoculation of seeds with suitable strains of Rhizobium to encourage strong growth

(suitable strains are, in the main, still to be identified for particular soya varieties and

local environments);

! timely planting, weeding and harvesting;

! use of correct fertilizers for legume crops;

! application of crop health products (arthropods, fungi, viruses and bacteria) when

indicated; and

! storage under suitable conditions of temperature and vermin control. Failure to overcome

the lack of use of available, effective, cheap and simple technology will inevitably result

in even further loss of competitiveness as the peers of Tanzania’s crop producers and

processors in neighbouring countries, especially Kenya, Uganda and Zambia, are making

widespread use of it.

3.3 Input Supply and Demand

The most important inputs for soya bean production are perceived to be:

! seeds;

! fertilizers and crop health products;

! fixed and mobile equipment and tools;

! credit.


Limited access to inputs including credit and poor dissemination and uptake of knowledge on management

are recognized constraints to development of the smallholder sector. There is no mention of soya in either

the ASDP Performance Report or the National Panel Survey (NPS) for 2010/2011. According to the NPS

the f arming sector is characterized by extremely limited use of modern inputs. Fertilizer use declined

after the phasing out of subsidies in 1991-1994 but since the return of limited subsidies fertilizer use has

increased again. Only 32.1 per cent of farmers used fertilizer in 2010/2011, much of this being organic

(i.e. farmyard manure) but, on the positive side, the regions with highest fertilizer use were Ruvuma and

Mbeya. It must be noted, however, that the Southern Highlands (Ruvuma, Mbeya and Iringa) are the

major focus for the National Agricultural Input Voucher Scheme whereby 51 per cent of farmers used

chemical fertilizers with 65.3 per cent of these using a voucher to purchase inputs. Even where it is used,

fertilizer application across all crops is in the range 5 kg/ha to 8 kg/ ha whereas annual nutrient depletion

is 61 kg/ha. Tanzania has some of the worst soil nutrient depletion in the region, making the case for more

fertilizer use all the more compelling. Use of insecticides and fungicides decreased from 17 per cent in

2002/2003 to 14 per cent in 2007/2008. The percentage of farmers purchasing seeds dropped from 35 in

2008/2009 to 28 in 2010/2011. Most seed purchases were of local varieties (which has the merit of

maintaining and even enhancing the diversity of the gene pool) with very few farmers buying improved

certified seeds or improved quality declared seeds. Given the status of soya research in the country it is

likely that the use of top quality seeds for this crop is lower than the general average for all crops.

The low level of mechanization among smallholders is both cause and symptom of rural poverty. Given

the generally abundant availability of land, a household’s capacity to maintain and increase its production

through use of a larger land area depends on how much labour it can hire or use labour-saving techniques

such as animal traction, tractors and minimum cultivation as well as the extent to which a market in land

exists and functions properly. A major limitation on farmer productivity (inputs versus yield) is the heavy

reliance on hand hoes – over 95 per cent of households use them as the main cultivating tool -- which

imposes obvious limits on the area that can be cultivated using family labour alone. The use of animal

traction is also limited but, whereas most farmers do not own an ox, some 18 per cent can afford to rent

an ox plough and 18 per cent also hire an ox seed planter. The use of mechanized traction and harvesting

machinery is less than 10 per cent for the former and virtually nil for the latter. Only 14 608 households

(0.3 per cent) use power tillers (“Kubota” in local parlance) and these are mainly for rice.

The majority of farmers are purely subsistence operators. One third of farmers sell part of their crops

(mainly maize and paddy). Postharvest storage is used to gain a better price out of season. Some 67 per

cent of farmers store their product in sacks or open drums whereas 17 per cent store using older traditional

methods. Storing under methods that would decrease postharvest losses such as improved local structures,

purpose-built structures and airtight drums is used by only 6 per cent of farmers.

Access to credit from commercial banks, Savings and Credit Cooperative Societies (SACCOS) or other

formal lenders is still very restricted. In 2010/2011 only 2.2 per cent of farmers said they received credit

for purchase of inputs such as improved seeds, fertilizers or fungicides.

Access to extension services is not quite so limited as access to credit yet it is not widespread. Just over

one quarter of rural producers received advice on production practices. Access seems to be positively

related to wealth. Public extension is supposedly widely available but there is clear inadequate provision.

There are the beginnings of private extension by seed, fertilizer and crop health wholesalers and retailers.

Access to extension services and inputs is better in and near towns where private suppliers with a range

of local and international products are rather common (Figure 4). The few distribution centres in rural

areas, especially in remoter locations, force producers to travel long distances to purchase inputs. Some

inputs are obtainable at rural markets and other informal distribution points but the risks are that the

products are counterfeit or have been diluted and there is little quality control. The imbalance in location

and availability of inputs – both physical and intellectual – is a fundamental problem for the chain.


Figure 4 Agro-vet retail outlet in Tunduma selling a range of seeds, fertilizers and crop health

products (Photo: Trevor Wilson)

Processors of fortified human foods and animal feeds face problems of supply of their basic material – the

whole soya bean. Fortified food processors are mainly small operations who obtain beans from the

Southern Highlands or the Babati area whence the supply is erratic and of inconsistent quality. Transport

costs are also high.

Feed manufacturers, especially the larger ones, have bigger requirements for soya beans. Soya bean meal

is increasingly being used as a protein replacement for fish meal but the local product is not preferred as

better (and more consistent) quality product that is also de-fatted can be obtained more cheaply from India.

The Tanzania Animal Feed Manufacturing Association (TAFMA) represents the animal feed

manufacturers. Several maize and wheat flour millers produce animal feeds and there are several

specialized companies in Dar es Salaam and its environs and many more in the larger towns (Box 2).

Millers who produce feed are, in effect, using a by-product – wheat or maize bran – of their operations

to produce a high value product whereas specialized firms have to obtain their ingredients from a variety

of sources: maize and wheat bran from internal resources, sunflower cake also from the local oil milling

industry (limited amounts of cotton seed cake are also used) and fish meal (made from pounded ‘dagaa’)

mainly from Lake Victoria. Compound feeds are more widely available in the populated areas than in the

remoter parts of the country where most pigs and poultry are found. Many medium scale producers resort

to mixing their own compounds from individual commodities, especially in the rural areas and especially

for pigs.


Tanfeeds has been successful in obtaining large amounts of grant and loan funding from two international3

sources: see Annex 10.

Box 2: Let them eat cake – supplements and concentrate feed manufacture

There is strong and growing demand – poultry feed production increased from 490 000 tonnes in 2001/2002 to

574 90 tonnes in 2006/2007 – for concentrate feeds and supplements from the white meat chain and for table egg

production. Poultry feed comprises a range of products including chick starter, chick special starter (with a

coccidiostat included), layers mash, broiler starter, broiler grower and broiler finisher each of different formulation

sold at a different price. Several industrial scale millers produce livestock feed, in part to add value to the maize

bran that is a by-product of milling. Many large, medium and small scale manufacturers plus many village millers

produce feed as do “home mixers”. Some large millers have automated (computer controlled mix proportions)

20-tonne batch mixers capable of producing pellets (but this is not yet done) as well as meal. The main ingredient

in stock feed is maize bran (usually about 70 per cent of the mix) followed by sunflower cake, fish meal

(powdered ‘dagaa’), locally grown whole (ground) soya beans (although imported de-fatted Indian meal is

preferred as it is of assured quality and cheaper than the local product and is to a great extent replacing fish meal

in rations), meat and bone meal, salt, lime and superlick. Legal requirements for declaration of ingredients and

proximate composition of the mix are in place for display on packaging but are not enforced. The larger firms

usually have analyses done by commercial laboratories, the Tanzania Bureau of Standards (TBS), Tanzania

Industrial Research Development Organization (TIRDO) or SUA. There is interest in increasing the social

contribution of feed firms. International TanFeeds Ltd is a share holding company based in Morogoro whose

main activities are purchase of cereals and cereal byproducts and other ingredients from farmers for processing

as animal feed. The company was formed in 2008 but has been producing feed since 2005. It aims to develop

a value chain starting with small crop farmers, through rural and urban livestock keepers and finally to consumers

of livestock products. Tanfeeds’ mission is to produce high quality feeds in order to promote efficient livestock

production. It envisages adding value to crops and byproducts via high quality animal feed. Maximizing local

feed resources is key to providing a sustainable market for small farmers. The vision is to become a leading

animal feed producer based on efficient use of local resources. Management staff includes specialists in animal

production, nutrition and health. Tanfeeds is in the process of becoming the most modern animal feed company

in Tanzania with the introduction of new machinery and various new processing technologies .3

Obtaining credit for capital and recurrent expenditure is a major problem for processors as it is for

producers. The National Microfinance Bank (NMB) and the Cooperative Rural Development Bank

(CRDB) are the main and largest providers of credit to agriculture in Tanzania. They have branches in

most districts of the Southern Highlands. NMB’s range of products includes loans for farmer groups and

for Small and Medium Enterprises (SME) applicable to processors. Collateral requirements are strict.

Interest rates are based on Treasury Bills plus 1 or 2 per cent and range from 19 per cent for SMEs to 24

per cent for micro enterprises. Both banks provide funds to SACCOS’ and Microfinance Institutions


(MFI). Several other banks, including the Tanzania Postal Bank (TPB), National Bank of Commerce

(NBC) and Exim Bank (Tanzania) (EBT) operate in the Southern Highlands (Table 4) and could be

sources of credit for livestock in the future. Government is in the process of establishing an Agricultural

Bank as proposed in the ‘Kilimo Kwanza’ (Agriculture First) initiative and has made a start with the

Agriculture Window Unit in the Tanzania Investment Bank (TIB). The fact remains, however, that

financing of agricultural production is mainly done by smallholder farmers themselves but there is some

external investment in activities that add value such as manufacture of foods and feeds.

Table 4 Banks operating and providing loans in the Southern Highlands

ItemBank

NMB CRDB TPB NBC EBT

Range of loan amount

(TSh)

300-500 million

per

MFI/SACCOS

300-500 million

per

MFI/SACCOS

Average 1.1

million per

MFI/SACCOS

5-250 million

per

MFI/SACCOS

500 million

per

MFI/SACCOS

Types of products: Whole range of financial products to individual clients: these include savings, loans, money

transfer, payment services etc. Wholesale loans are extended to SACCOSs and MFIs.

Profile of clients NMB, NBC, EBT and CRDB are primarily indirect providers via their links with MFIs and

SACCOSs. TPB has a tendency to provide direct services to individual rural clients.

Portfolio characteristics CRDB volume of loans to agriculture (rural) comprises about 25 per cent of total lending.

NMB has extended significant lending in agriculture whereas TPB, NBC and EBT have

continued to lend to individual farmers as demand arises.

Financing sources and

capital structure

SACCOS and other MFIs are able to generate funds from the banks, NGOs and own

members.

Source: SIDO (Small Industries Development Organization) 2009

3.4 Production

3.4.1. Overview

Earlier sections of this report as well as many other internal and external reports have stressed that soya

production is overwhelmingly the domain of small scale traditional producers. Estimates of up to 99 per

cent of soya beans deriving from the traditional sector are common. The situation may well change in the

future with increasing interest being shown by large scale farmers, especially in the Ihemi Cluster of

SAGCOT south of Iringa but also in the Arusha and Kilimanjaro Regions.

3.4.2. Area planted and unit area yields

There are no reliable long term data on area and yields for soya in Tanzania. Various sources provide

various, often wildly various, “estimates”. Incidental sources of direct information do not provide a

holistic view. Thus in the early 1960s OFC was cultivating 6000 ha of soya on its Nachingwea farms.

The National Grain Legume Research Programme that became operational in 1974/1975 grew 750 ha of

soya on parastatal and prison farms around Nachingwea in that year with plans to expand to 8000 ha.

The longest time series indicate that the area cultivated in the 50-year period 1961 to 2011 was similar

across years in the range 4000 to 6000 ha. A larger area was planted in the early 1960s (when the then

Tanganyika Agricultural Corporation (TAC) – successor to OFC – was active in Nachingwea) followed

by a smaller area in the late 1960s and early 1970s (Figure 5). The decline in area planted is often

attributed to the demise of the parastatal National Milling Corporation (NMC) and General Agricultural

Products Export Company (GAPEX) which had encouraged smallholders to grow soya for export.


Figure 5 Area planted to soya bean in Tanzania, 1961-2011 (FAO 2012)

Long term average yields in Tanzania are said to be around 1.5 tonnes/ha but this may be optimistic.

Higher yields are reported by some research papers but much lower ones by other sources. In

demonstration plots of several varieties in Hai District in 1999 yields were in the range 588 kg/ha-2333

kg/ha. Large scale farmers between Mafinga and Iringa in the Southern Highlands obtain yields of 3 t/ha.

Tanzania yields, however, are much lower than those obtained in other parts of the world (Figure 6).

There is no doubt that considerably higher yields can be obtained with appropriate inputs and husbandry

and up to 4 tonnes/ha should be possible under dryland conditions with good management.

Figure 6 Comparison of world annual average soya bean yields with those in Tanzania


In 1961-1965 the OFC grew about 6000 ha on its 18 farms around Nachingwea: the author of this report4

was responsible for two farms in this period and grew about 1000 ha of soya.

The major factors that have influenced production of oilseeds, including soya bean, in Tanzania are poor

producer prices and the collapse of the domestic and export marketing systems.

3.4.3. Genetic resources

It is said that soya beans were first introduced to what is now Tanzania in 1907 (by an unknown route and

from an unknown source). This date is given by innumerable secondary sources but there is no firm

reference to support the claim. One usually reliable source states that there were introductions from the

USA in 1909 and further introductions from Japan, China and South Africa in 1911 (Table 5, Annex 5) .4

These last are referred to in more detail in a paper published by the then German Agricultural Research

Institute in Amani but there is no reference in this authoritative paper to any earlier introduction to German

East Africa. Another unsubstantiated statement refers to soya beans in Lindi and Mtwara regions during

the German period. No more introductions appear to have been made until 1938 and 1939 when 64

cultivars were established at Amani via direct imports from India, South Africa and the USA together with

a large number of American and Far Eastern cultivars arriving from Rwanda. Soya beans were grown in

the Bukoba area during the period of the Second world war and, according to the source, did well or did

badly.

Table 5 Genetic resources of soya bean in use at various times in Tanzania, 1957-2013

Time period Location Varieties

< 1915 Amani unspecified USA (1909); 11 unspecified Japan, China and South Africa

1938-1939 Amani 64 cultivars USA, India nd South Africa and via Rwanda from “America”

and Far East

1950 Nachingwea Hernon 237 introduced from Rhodesia to replace Dixie variety

(presumably USA variety from 1938-1939 imports)

1957-1963 Nachingwea New adapted varieties for lowland conditions included IH/192

(“Tanzania’s standard line”), 3H/1, 3H/101, 7H/149/1: Hernon 237 x Light

Speckled, Hernon 237 x R184 and Benares x Light Speckled produced

highest-yielding and most agronomically desirable strains: over 5-year

period HLS [Hernon Light Speckled] 219 out yielded parents Hernon 237

by 40% and Light Speckled by 37%

1978 ??? Bossier (from Bossier City, Louisiana, USA) and 3H/1 recommended

1992 Selian Bossier IL, Duiker, Sable, EAI 3715, Still, Delma, SAB/7, PERY 41

1997-2000 ???? 4 unspecified varieties from AVRDC to research organizations for testing

2002-20013 Uyole Uyole Soya 1 (SH1), Uyole Soya 2 (SH2)

2005 Ilonga TGX 1876-4E, TGX 1895-4F, TGX 1895-33F, TGX 1895-49F IITA

varieties developed under TLII project)

2012 Ihemi Cluster Songea (long season, nodulates with local bean rhizobium), Squire (good

rust resistance but poor germination), SB8, SB19, Solitaire, Dina, Pan

Continuing Farmer fields Soya lishe, TGX 1805-8E, Songea, Safari, Bossier, Karea, Kaleya, Ndogo,

landraces described on morphology (seed size and colour, hymen colour)

Likely future Station and farmer

fields

WF-L19, Maksoy 2N, Namsoy 4N x Uganda (for release by Uyole);

Namsoy, Tgx1740-2F, Tgx1987-64F (from N2Africa/Kenya); Squire,

Safari, Spike, Semeki (from SeedCo, Arusha)

Source: compiled by the author


Fuller details of the research system are to be found in Section 4.3.5 Research services.5

N2Africa is a project funded by The Bill & Melinda Gates Foundation by a grant to Plant Production6

Systems, Wageningen University who lead the project together with CIAT-TSBF, IITA and many partners in the

DRC, Ghana, Kenya, Malawi, Mozambique, Nigeria, Rwanda, Tanzania and Zimbabwe.

The OFC “Groundnut Scheme” – presumably accepting that it would get little oil from its eponymous crop

– started soya bean cultivation in 1956 and employed a breeder to improve the country’s gene pool of the

time. Hernon 237 was introduced to replace the Dixie variety (probably from the USA import in 1938).

Breeding new varieties adapted to the lowland conditions of southern Tanzania continued from 1956 to

1963 and several cultivars were released during this period. By 1967 the research arm in Senegal was

testing 23 Tanzania soya varieties for its own conditions and later released some to other West African

countries. Conversely, 10 years later, Tanzania participated in adaptive trials undertaken in many

countries and Tanzanian seeds were tested in a germination trial in Puerto Rico. A programme at SUA

in the late 1970s and early 1980s aimed to breed varieties with enhanced nitrogen fixation capability but

was not pursued in the longer term. Public research on soya bean since the 1970s has been spasmodic and

inconsistent . The Agricultural Research Institute (ARI) at Naliendele in Mtwara Region was made the5

coordinating centre for the Oilseeds Research Programme (ORP) in 1978 but its main emphasis is sesame

and groundnuts. Varietal research has also been undertaken at Ilonga (on at least two discrete occasions,

1960 to 1969 and from 1973 onwards) in Morogoro Region, at the Kilombero Agricultural Research and

Training Institute (KATRIN, 1968 to 1976) in Morogoro Region, at Lyamungu ARI (from 1978) in

Kilimanjaro Region and at Selian ARI in Arusha Region (from 1986) and at the nearby Lambo Estate.

The second breeding programme (Ilonga second phase and Lyamungu) aimed to obtain new varieties with:

! high yield;

! high protein and oil content;

! resistance to lodging and shattering;

! resistance to major diseases;

! good branching habit;

! medium plant height of 60-90 cm;

! ability to set pods at 10-15 cm above the ground; and

! good adaptation to the local environment.

At the turn of the twentyfirst century the International Vegetable Research Centre (AVRDC) provided

seeds of four soya lines to National Research Institutes for further evaluation and future release. In 2013

Uyole ARI is the only public sector institution working on soya bean breeding. Uyole has released two

new varieties (which have not proved successful in the real life situation of either small or large farms)

since 2002 and continues to test new lines (Figure 7) although the human (one researcher), other material

and financial resources allocated to the programme are meagre. Frankly informal and some semiformal

research and observation trials are undertaken by both small and large farmers. In the case of the former

it is clear that the country’s most widely grown variety, Safari, which is not licensed in Tanzania, was first

introduced in unofficial cross border transactions from Zambia by smallholder farmers acting on their own

initiative. Safari, developed by Seed Company Limited in Zimbabwe, is an indeterminate variety with

high seed yield potential similar that is well adapted to the altitudes in excess of 900 metres, is resistant

to lodging, has a long period that is shatter and can thus be harvest with little loss of yield and has good

ground clearance of the bottom pods. Seeds are of medium size with a yellow hilum and are of good

quality. Safari is generally resistant to or tolerant of most soya bean pathogens but its high susceptibility

to Soya Bean Rust – caused by the fungus Phakopsora pachyrhizi – means it may require two or even

three fungicidal sprayings during the growing period. Some observational trials are being undertaken by

large farmers in the Ihemi Cluster with varieties developed in western Kenya provided by CIAT through

the N2Africa Programme .6


Figure 7 Soya bean genetic resources in Tanzania: lines under test at Uyole Agricultural

Research Institute) (Photos: Trevor Wilson)

Soya needs to be inoculated, naturally or artificially, with Rhizobium bacterium for maximum

productivity. Some varieties, and notably the long-season Songea variety in Tanzania, are “promiscuous”

in making use of Rhizobium of other local legumes. It was possibly Songea that was the variety that was

found to be promiscuous in international variety trials in the 1970s. Most varieties, however, are particular

as to their inoculants and the search for variety-specific rhizobia has been a rather constant refrain in soya

variety breeding for a long time in Tanzania. Good nodulation usually leads to string growth and higher

yields whereas lack of nodulation is a major factor in poor germination and poor growth (Figure 8).

The soya bean is reputedly resistant to many common legume pests and diseases and especially those of

the beans grown in Tanzania. It has, however, a specific fungus disease – Soya Bean Rust -- as already

indicated and which can reduce yields by up to 90 per cent. Soya Bean Rust is now the subject of a special

programme being implemented by IITA in Tanzania and its neighbouring countries. Other potential soya

diseases that may need research in the future include Frogeye Leaf Spot, Wildfire, Downy Mildew, Red

Leaf Blotch and Bacterial Blight.

3.4.4. Soya bean output

In the early 1970s the Tanzania Government and the United States Agency for International Development

(USAID) mounted a US $14.9 million seed multiplication project to help to increase food production.

Some 1800 acres (730 ha) were later planted as intercrops in an attempt to increase land productivity.


These targets are clearly beyond the bounds of possibility. The 2010 “data” assume a grain yield of 1.437

tonnes/ha, greatly in excess (possibly 3-fold) of what is actually achieved in the country and there is no indication

on the ground that the cultivated area and crop output is anywhere near the 10-fold increase targeted from 2010 to

2013 although actual output in the latter year may approach 5000 tonnes. The targets for seed imply that only a small

proportion of the projected area will be planted with seeds not saved by the farmers themselves.

Figure 8 Soya bean genetic resources in Tanzania: good nodulation on the Dina variety and poor

germination and slow growth in Squire possibly caused by poor nodulation, both in Ihemi

cluster) (Photos: Trevor Wilson)

National production of soya beans was estimated at 776 tonnes in 1975. Soya bean output in 2007 was

4000 tonnes from 11 000 ha or an average yield of only 364 kg/ha and 4000 tonnes of soya or its products

were imported in that year. Estimates of recent production in five regions, provided by the regional or

district agricultural officers, indicate that these alone are responsible for about 51 per cent of national soya

bean output, that the area potentially available for soya bean (based on areas where maize is cultivated)

is a minimum of 630 000 ha and the potential production in these areas is 1.07 million tonnes (Table 6).

MAFC has established targets for the growth of soya bean production starting from a base of 3500 ha

under cultivation in 2010 and an output of 5000 tonnes of soya beans to a cultivated area of 1.4 million

ha in 2020 and an output of 2.0 million tonnes (Table 7) .7

Table 6 Recent soya bean production and potential area and output increase in Tanzania regions

RegionRecent production Potential

Year Output (tonnes) Area (ha) Output (tonnes)

Mbeya 2005 533 200 000 300 000

Rukwa 2005 11 150 000 225 000

Ruvuma 2005 499

2009 332 150 000 225 000

2010 800

Iringa 2005 105

2006 5940 130 000 200 000

2010 120

Morogoro Presence indicated by farmers/scientists 120 000

Source: MMA 2010 based on MAFC data provided by regional agricultural officers


Table 7 Targets for area planted, output, proportion processed and exported and seed

production of soya beans, 2010-2020

Year Areas (ha) Production (tonnes) Processed (%) Export (%) Seed (tonnes)

2010 3 500 5 000 2 75 35

2011 5 000 8 500 5 65 50

2012 17 500 25 000 10 55 700

2013 35 000 50 000 20 55 1 400

2014 70 000 100 000 30 50 2 800

2015 140 000 200 000 40 50 5 600

2016 280 000 400 000 40 45 11 200

2017 560 000 800 000 40 45 16 800

2018 840 000 1 200 000 40 40 22 400

2019 1 180 000 1 600 000 40 35 28 000

2020 1 400 000 2 000 000 400 35 28 000

Source: MAFC 2010

In the period 1985-2007 the soya bean area increased at an average of 1.4 per cent per year. Long term

production data show that in the period 1961-2011 there was relatively high production in the early 1960s

(when TAC was active in Nachingwea). This was followed by a long period of almost total lack of

interest translated from the reduced area planted at this time and attributed to the failure of NMC and

GAPEX. Production increased again during the 1990s which, succeeding yet another reduction in output,

has culminated in higher output in the second half of the first decade of the twentyfirst century (Figure

9).

Figure 9 Trends in annual production of soya bean in Tanzania, 1961-2011 (FAO 2012)


3.4.5. Profits from production

Considerable fluctuations in the prices received by producers for their soya beans are evident both within

and across years. In 2013 the prices paid to smallholders for small lots of beans have been in the general

range of TSh 400/kg to TSh 800/kg at the farm gate. One new large scale enterprise that was in the

process of setting up a parent stock poultry hatchery in August 2013 bought 600 tonnes from the Songea

area after the 2013 harvest for which farmers received TSh 800/kg to which must be added TSh 153/kg

as transport costs to the Ihemi Cluster. Large farmers in the Ihemi cluster were paid TSh 950/kg for lots

of 150 tonnes and 550 tonnes by the same new organization in August 2013. Soya yields are subject to

wide variation depending on rainfall, soil type (especially pH, as soya beans prefer a slightly acid range

of 6.2 to 5.8 but many Southern Highland soils are more acid than this), altitude (there are few varieties

adapted to particular altitudes), variety, state of inoculation and more general agronomic practices.

Reported yields for smallholder farmers in the 2012/2013 season vary from 0 kg/ha to 1500 kg/ha but

most seem to have been less than 700 kg/ha. Large scale farmers reported yields of 1500 kg/ha to 3000

kg/ha for the 2012/2013 season.

There is thus very little empirical information on which to attempt a gross margin analysis. One such

theoretical attempt for Nyololo village (8 km east of the North-South Highway between Mufinga and

Makambako at an altitude of 1800 metres shows gross margins of TSh 74/ha to TSh 434/ha under a range

of scenarios (Table 8).

Table 8 Theoretical gross margin analyses for smalholder soya production in the Southern

Highlands

Item

Scenario

Medium yield

(1980 kg/ha),

low price

Medium yield

(1980 kg/ha),

medium price

Medium yield

(1980 kg/ha),

medium price

High yield

(2470 kg/ha),

high price

Costs (TSh/kg)

Inputs 92 92 92 97

Labour 209 209 209 165

Transport 8 8 8 6

Total variable costs 309 309 309 268

Revenue (TSh/kg) 383 503 552 701

Gross margin (TSh/kg) 74 194 243 433

Source: adapted from MMA 2010

3.5 Processing

3.5.1 Overview

The soya bean is an excellent source of oil and protein. The International Institute of Tropical Agriculture

(IITA), with headquarters in Ibadan in Nigeria, introduced the soya bean to its food crops research

programme in the late 1970s. By that time, however, much was already known about its properties and

uses. The bean is a rich source of edible oil that does not contain cholesterol and has very low levels of

saturated fats. Oil is extracted for human consumption and industrial uses. Soya bean meal, whether

fullfat or defatted, accounts for nearly 80 per cent of the physical output. Soya oil is an ideal food for


people with cardiac problems and for those who wish to avoid heart disease. It has a high level of lecithin

– an important constituent of all organs of the human body and especially of the nervous tissue, the heart

and liver -- and is a good source of several fat soluble vitamins. Soya bean meal is considered the most

valuable end product of processing and is converted to various protein rich foods and feed products. A

major food product of soya is tofu, also called bean curd, which is made by coagulating soya milk and

pressing the curds into soft white blocks. It is popular in many East and Southeast Asian countries and

beloved of vegetarians and vegans everywhere. Tofu is low in calories, has a relatively high protein

content, contains little fat and is high in iron. Soya is used in industry in the manufacture of margarine,

vegetable ghee, milk, and pastries and is found in paints, varnishes, adhesives and clothing. Soya protein

concentrate, protein isolate and textured protein are constituents of many commercial foods. The

functional properties of soya protein have given rise to many new products and improved the quality of

existing ones. There is also the possibility of using esterified soya bean oils for the production of biofuels.

Soya beans are a highly versatile crop with innumerable prospects for support of many agroindustries.

Processing, for practical purposes, can be considered to start from the moment soya bean leaves its point

of production, either sold by the owner to an agent or stored by him/her personally on the journey to

market. From this point there is a multiplicity of variations in the pathways a bean follows before it ends

up as human food, livestock feed or for industrial applications (Figure 10).

Figure 10 Representative examples of pathways followed from point of production to final use

for soya bean and its products


3.5.2 Marketing

There are no formal markets – where it is possible or mandatory for producers to take or to send their

product either by individual or group bargaining or by standard auction procedures – for soya beans. This

does not mean, however, that there is not an active and sometimes keen trade in the crop. The Southern

Highlands, especially the relatively low altitude (~ 1000 m) Songea area and the more elevated (with

altitudes in excess of 2600 m) of Njombe locality, are a main source of soya beans for the national market,

especially for Arusha and Dar es Salaam.

Trading, in the sense of a professional middleman buying and selling products at some point along the

chain, is an important and, in the Tanzanian context, indispensable link in getting food or potential food

from the producer to the consumer. Such traders are often accused of making excessive margins at the

expense of other links but there is little evidence to support this contention especially for soya beans. The

risks born by traders are, nonetheless, much less than those likely to occur at other points in the chain due

essentially to the short time that the product is in his or her possession. As soya is a minor crop with a

rather narrowly defined market the number of links between producer and processor is truncated in

comparison to more conventional and widely traded crops.

Most soya beans intended for the food fortification sector, whose processing activities are usually based

far from the point of production, pass through the hands of a broker or trader. Traders undoubtedly make

speculative purchases from farmers but in the majority of cases they are buying to order, or on the

presumption of an order, from a processor or processors with whom they have a long term association.

The main locations for these activities are the Southern Highlands and in the Babati area, south of Arusha,

in Manyara Region.

The marketing process for large farms is somewhat different as they prefer to sell their products direct to

an end user. In spite, however, of the theoretical demand from the large number of animal feed

manufacturers around the country they have had difficulty in selling their crop. In at least one case a large

farmer was unable to find a buyer for more than two years. The situation may be alleviated with the entry

in to the chain of the large scale parent stock poultry breeder, to which reference has already been made,

in the Ihemi Cluster.

3.5.3 Home use

Soya is sometimes considered a difficult crop for smallholder producers because it requires some form

of processing before it can be used. Although home processing is rather simple it involves several steps

and, for example in the case of making soya milk (Figure 11), can be very time consuming. The East

African Industrial Research Organization (EAIRO) and USAID evaluated the Brady Crop Cooker – a

mechanical expeller – for use with soya, maize, sorghum and sesame to produce weaning foods, bread

fortifiers, enriched flours and nutritious snacks with flavouring and found that such foods were well

accepted throughout East Africa.

A project that was directed mainly at women and primarily designed to help them with home precessing

was started in the Njombe area in the 1980s but, as with many such initiatives, faded away with the

cessation of project funding. In an indirect line of descent the current ‘Soya ni Pesa’ project financed by

the United States Department of Agriculture (USDA) through Catholic Relief Services (CRS) continues

this work. There is increasing consumption and availability of prepacked products containing soya, partly

as a result of Government publicity and encouragement via the written, oral and visual media. It can be

expected that there will be greater use of technology to increase home processing and consumption of soya

in the future.


Figure 11 Steps involved in home processing of raw soya beans to soya milk as described by a

smallholder lady farmer

3.5.4 Fortified foods and other speciality products for human use

There are multiple possibilities for soya beans to contribute to human nutrition, all the way from the cradle

to the grave. In the 1970s the Tanzania Government in collaboration with the United Nations Children’s

Fund (UNICEF) set up a pilot project in several villages to produce full fat soya flour. At about the same

time, from experiments undertaken in the country, it was considered that soya beans, with a higher lysine

content than groundnuts, were a potential source of protein supplement to cereal diets. Perhaps

consequent on this, soya flour began to be used in porridge at a ratio of 1:3 with maize flour. Bread made

with 10 per cent soya and 90 per cent wheat flour was then common especially in Morogoro Region and

porridge and soya milk were used extensively in school feeding programmes and were highly appreciated.

There seems to have been little long term benefit from and continued use of any of these initiatives.

New demands for soya products are, however, arising. These demands, for example, are for people who

are immuno-compromised (HIV/AIDS), for those who need special diets to replace cow milk (lactose

intolerance) and for speciality items for the aged and infirm. In contrast to the perceived wisdom

regarding the benefits of soya as a food fortifier there is an emerging controversy on the human health

risks associated with over consumption of soy products in respect of hormones and the perceived

economic threats associated with their dissemination into developing countries. The options vary from

area to area and consumer group to consumer group. In Tanzania locally processed products already on

the market include baby food, soy milk powder, pure soy flour, a “power” flour known as ‘lishe’ with soya

milk, rice and maize and other cereal flours, other fortified flours of wheat and maize for staple foods such

as ‘ugali’ and ‘uji’ and for confectionary products (bread, buns, chapatti, cake and biscuits), a drink similar

to coffee and the beans after heat extrusion mixed with cereal grains (Figure 12). In addition to local

produce, the ubiquitous soy sauce, soya bean oil, soya lecithin and yet more soya in one form or another

is present in an amazing range of other imported products such as creamy wheat cereal, mayonnaise,

Worcestershire sauce, organic and non-organic soya drinks, soya milk cappucino, soya milk itself fortified

(with collagen, vitamins, iron and calcium), family porridge, margarine, infant foods from starter via

follow-on through to 1- to 3-year olds, and even peanut butter! These products derive from (usually non-

genetically modified, non-GM) soya beans grown in various parts of the world ranging through North and

South America, Europe and Asia and manufactured in a bewilderingly diverse array of countries in Africa

itself, North America, Europe, the Middle East and East and Southeast Asia (Annex 6).


Figure 12 A range of soya products produced in Dar es Salaam in the retail outlet of the

processor (Photo: Trevor Wilson, August 2013)

Not all, and possibly none, of the identified Tanzania products are fully exploited. The supply of raw

beans in terms of both quantity and quality is problematic as is the purchase of machinery (either

mechanical expellers (Figure 13) or solvent extractors) suitable to Tanzania conditions. Cultural and

culinary barriers arise from the preference of people who prefer to eat food that it knows. In spite of this

there is a burgeoning food fortification industry comprising a considerable number of small to very small

operators (Box 3) – many of whom have received training through SIDO – and a smaller number of

medium to large scale processors (Box 4) supplying current demand and creating opportunities for the

future. Most processing is based in Dar es Salaam or Arusha although nascent specialist businesses are

developing in other parts of the country (Annex 7). Some small operations are not registered for barcodes,

yet barcode technology is gradually bringing about a business revolution particularly to SMEs in other

sectors. Barcodes are an important way forward in contributing to economic growth as they can help to

identify bottlenecks and inefficiencies in the supply chain. They are fundamental in promoting the

competitiveness of local manufactured goods in both national and international markets and enable the

tracing of products. The use of barcodes compels manufacturers to adhere to the quality standards that

are now considered a necessary component in the competitive market and there is a direct relationship

between use of bar codes and the quality products. Barcode technology has greatly contributed to

increased sales of local products in supermarkets and other retail outlets. In the 18 months following their

introduction in Tanzania more than 360 companies adopted the technology for almost 6000 varieties of

goods. The processing industry can be expected to grow in the future and will expand to include many

of the animal feed manufacturers in the country (Annex 8).


Figure 13 An electric powered expeller of the type that can be used for soya bean processing

Box 3: Small is beautiful – an Arusha home-based initiative supplying foods fortified with soya

Esther Daniel Nassary is a micro scale processor with macro sizeambitions who was helped to set up her business by initial and continuingtraining by SIDO. Joshua Products (named for her son born after anunusually long period of four years into her marriage) was set up in 2011.Although still in the process of registration by TFDA and TBS things arehappening. Esther uses an agent in Babati to buy soya from localproducers – who may sell lots of only 20-30 kg – and pays TSh 1700/kgdelivered to the garage under her house that is her “factory”. Rather thango through the long and slow progress of processing towards milk [seeFigure 11] she decorticates her soya, at TSh 200/kg, to remove the outercoating in a local hammer mill. Her range of products includes fortifiedflour, soya drink powder and a soya mix and soya meal with whichcustomers can mix their own fortified foods. Her main product isfortified flour (a mixture of maize, wheat, finger millet, sorghum, rice,millet and 10 per cent soya, mixed by manually) which she sellswholesale to an agent at Tsh 2000/kg (the inner plastic liming is sealedby hand by passing

it across a candle flame, the outer cardboard packagingproduced and printed in Nairobi costs TSh 350) plus thethree other products sold in plastic bottles of 200 g at TSh1500 the unit (the bottle and label costs TSh 280). Herturnover, including about 300 kg of soya is over 3 tonnesper month, to produce which she employs 6 women and 4men). Esther retails some of her own product direct inArusha or travelling by local bus to Moshi and Babati. Shealso sells wholesale to agents who resell in Mwanza,Shinyanga, Babati and Tanga. At one small general store inTanga where Esther’s fortified flour was on sale the ladyowner had paid the wholesaler TSh 3500 pe kg and wasselling it at TSh 45000: she had also paid the wholesalerTSh 3500 for the concentrate products which she sold at TSh 4000. It appears that the main benefits are in thetop links of the chain.


3.5.5 Animal feed

The main potential demand for soya bean products will be the animal feed industry. In the world as a

whole only 2.5 per cent of soya meal is used for human food and industries other than animal feed. Dairy

and beef consume 21 per cent of the word’s soya meal, pigs 25 per cent and poultry 46 per cent. The

combination of price and nutrient characteristics favour soya meal for pigs and especially poultry. Soya

meal is highly digestible and is high in the amino acids that complement those in cereal grains.

There is already limited use of soya cake or meal by some larger feed manufacturers although in

September 2013 there is more intention than action. It is hoped that soya cake or meal will replace, totally

or partially, the ground ‘dagaa’ which is currently the common protein source in locally manufactured

feeds. Local users and potential users of meal are concerned about supply possibilities from internal

sources and have already imported or intend to import meal. Imports have been mainly from India, either

of solvent-extracted (“de-fatted”, crude protein content 44.0 per cent, ether extract 0.5 per cent) or full fat

meal (crude protein 38.0 per cent, ether extract 18.0 per cent). Solvent meal has a slightly higher

digestibility percentage than de-fatted for ruminants but de-fatted meal has 5 per cent greater

metabolizable energy content for poultry – which are the main species using soya meal in Tanzania – than

solvent-extracted. Both meals are similar in the composition of essential amino acids but de-fatted meal

has higher (in some much higher) vitamin contents. Mineral contents are low but similar for

macrominerals in both meals whereas microminerals (iron, copper and zinc) tend to be lower in full than

in de-fatted meal.

Box 4: Is bigger better? – a Dar es Salaam medium scale enterprise producing soya foods

Power Foods Industries Ltd was established in 1993. From very small

beginnings it has become a company to contend with in the manufacture of

fortified foods. Some 28 people are employed in the Dar es Salaam factory

and six ladies travel the country by bus promoting and selling the

company’s products. Anna Moshi, the Managing Director of Power Foods,

was born in the Kilimanjaro Region and was among the first to graduate in

1984 in the then unfashionable discipline of Food Processing. She worked

in the banking sector for 19 years until she had enough money to set up her

business. Her vision for the company is for it to become a leader in the

processing and distribution of high quality nutritious and safe food as a

contribution to the fight against malnutrition among children and other vulnerable groups in Tanzania and across

the world by 2025. In order to help her achieve this vision she has undergone further training in food and

especially fortified food production by SIDO in Tanzania and through two short courses in the USA. In 2000

Anna bought a mechanical expeller in the United Kingdom that was suitable for the treatment of soya beans. She

now produces a range of products (see Annex 7) with soya as

an ingredient. Beans are obtained from Zambia and from

contract farmers in the Morogoro and Songea areas. In

training farmers she works in collaboration with IITA and the

Association for the Strengthening of Agricultural Research

in Eastern and Central Africa (ASARECA). The factory is

capable of processing up to 300 tonnes per year of soya (up

to 3000 tonnes total output) but in 2103 is processing only

100 tonnes. The World Food Programme and Save the

Children were major customers in the past but are so no

longer. The company sells products direct to public and

private sector orphanages and to supermarkets and lager

shops around the country. The two retail outlets owned

directly by the company are also a major source of sales.


One new buyer of soya beans for poultry feed in the Ihemi Cluster purchased 1300 tonnes of whole beans

for processing in July and August 2013 and estimates a requirement of 1000 tonnes per month for

processing over a 10-year time horizon. In Dar es Salaam two of the main (potential) users estimate

requirements of 650 tonnes per month and 300 tonnes per month in the very near future. A feed

manufacturing company in Morogoro (see Box 2) that buys soya locally is already producing soya oil and

using the expeller cake in its own mixed poultry feeds (Figure 14) and estimates a requirement of 200

tonnes in the immediate future with higher needs in the longer term. Use of an expeller as opposed to

solvent extraction also has the advantage that the heat generated in the process denaturises enzymes such

as urease and trypsin inhibitors that would otherwise reduce the nutritional value of the meal and therefore

avoids the necessity of having to toast the meal as a separate operation.

Figure 14 Soya oil and expeller cake processed in Morogoro from local whole soya beans

(Photos: Trevor Wilson, September 2013)

As for producer benefits, there are few data on which to calculate a firm profit and loss account. Those

that are available indicate benefits throughout the chain to those involved in soya beans (Table 9).

Table 9 Theoretical gross margin analyses for participants in the soya bean value chain

Item

Activity

Export

trading

Poultry feed (full

fat raw meal)

Poultry feed (full

fat processed)

Large

processor

Super-

market

Whole-

salerRetailer

Costs (TSh/kg)

Raw material 383 340 480 650 1800 800 900

Inputs 5 20 20 ? 0 0 3

Labour 16 3 5 ? 3 8 0

Transport 50 0 0 ? 0 10 5

Other 16 0 0 ? 15 11 10

Total variable costs 470 363 500 ? 1818 829 918

Revenue (TSh/kg) 503 400 500 1800 2000 900 1000

82Gross margin (TSh/kg) 33 37 0 ? 182 71

Source: adapted from MMA 2010


3.5.6 Hindsight

The processing section of the soya bean value chain is beset with problems, some cascading down from

“above” (laws, regulations, unwarranted and unproductive interference), some seeping up from “below”

(lack of organization, poor facilities, non-discriminating customer base). The main issues in the

processing section of the chain are:

! a disorganized and largely incomplete market chain;

! lack of competition amongst buyers (farm gate prices are similar throughout the country

but sellers seem generally to accept these without much complaint);

! complicated and conflicting regulations that are not usually enforced;

! untrained and unskilled staff throughout the links;

! lack of or inadequate equipment and tools throughout the links of the chain from initial

producer to processor and beyond;

! little interest on the part of many domestic customers in products of better quality or with

value added attributes;

! a limited (but expanding) range of products from the intermediate links in processing in

both quality and quantity; and

! a generalized laissez faire attitude at all levels of the chain from law makers to primary

producers.

3.6 Wholesale and Retail Distribution

Wholesale trade in soya beans and their products is somewhat limited. Manufactures of fortified human

foods often use an agent for distributing their products. Margins between manufacturers sale price to the

agent and the agents sale price to the retail outlet appear rather large. Animal feed manufacturers who

import soya meal tend to use one of the major cereal import traders as an intermediary and negotiator at

the port of entry.

The retail distribution system for fortified foods is broad based. Manufacturers may sell direct to

consumers or supermarkets and general convenience stores buy from the manufacturer or an agent before

selling small packs to individual consumers. Retail packaging is far from standard (see Annex 7): some

of even the smallest producers have already gone to considerable effort to make their packs attractive

(Arusha producers may have these made up in Kenya) whereas others distribute their product(s) in what

is little more than a plastic bag with a label that looks decidedly home made. At least one major animal

feed manufacturer produces only for use in its own poultry business. Other feed manufacturers sell

products through their own retail outlets or via the many agro-vet stores located throughout the country

in urban and rural areas, usually in packs of 50 kg.

3.7 Target Group Considerations

In a recent analysis of global food security by the World Bank Tanzania was placed in 99th place among

105 countries with four of the six countries below it being contiguous (Burundi, DRC) or near (Ethiopia,

Chad) neighbours. Latest FAO data indicate that 18 million Tanzanians were undernourished in 2012

accounting for 38.8 per cent of the population, up from 8 million and 29.4 per cent in 1992.

Market access among rural households is limited. Only 10 per cent of farm specialized rural households

are market oriented (i.e., sell more than 50 per cent of output) and of all rural households just 37 per cent

of total agricultural production is marketed (29 per cent being crop sales and 8 per cent originating from

livestock).


In a survey of 240 randomly selected households in Kilosa, Njombe and Mvomero Districts only 67 of

them (27.9 per cent) were growing or had grown soya beans. Among these households 64.2 per cent of

those growing soya were members of farmers’ associations which probably indicated the positive effects

of associations in respect of diversified cropping and thus of spreading of risk. Most farmers saved their

own seed for replanting, others received seed fro a neighbour or a government programme, in Kilosa seed

was obtained by many farmers from SUA with minor sources of seed being free seed from an NGO,

purchased from a seed company, purchased from a market and purchased from an agro-input shop.

Several households claimed to have planted improved soya bean varieties in the previous five years but

many more farmers said that no improved seed was available (45 per cent of responses) or they had not

been provided with information on improved varieties (26 per cent). These two factors are not, of course,

confined to soya bean production but the challenge that is posed to formal seed companies, agro-input

dealers and the overall agricultural development community is to provide more information to farmers.

Farmers can hardly be blamed for low output or continued use of crop seeds saved from previous harvests

when alternative and improved seeds have not been made available to them.

A survey by the Regional Rice Centre of Excellence (but which probably has general implications) of 722

farming households across six districts (Bunda, Sengerema, Mbarali, Kyela, Mvomelo and Kilombero)

in April 2011 found that:

! households were producing mainly for subsistence with rice being the main determinant

of household food security;

! there had been at least some degree of food insecurity in the four years prior to 2011

(33.6 per cent of households reported a surplus of food, 33.9 per cent professed to have

had enough food to meet household needs, 23.8 per cent had seen a small deficit and 8.7

per cent had suffered a large deficit);

! males were head of 87 per cent of the households with the remaining 13 per cent having

females as household heads; and

! total average household income, the main sources of which were crop and livestock sales,

was TSh 1 382 821 with men having a higher income (TSh 1 545 824) than women (TSh

1 040 724).

Hence it is difficult to determine if gender requires a specific focus. The key is to be inclusive and involve

both males and females in future programmes and activities (at a village meeting in Mngeta in August

2012, 40 per cent of the 60 people attending were women). Youths in rural areas are also an important

consideration in agricultural development. They do not see agriculture – which they equate to “a hoe” --

as offering a remunerative activity and that it is about the past and not the future. Rural youths thus drift

to the city where they perceive there is more opportunity. If agriculture were more remunerative and had

more of a value chain approach it could become attractive to the younger generation.

Female-headed households thus tend to have relatively more small animals than large ones compared to

the average household. Women managing livestock earn less from them, manage considerably lower

numbers of the main quadruped species and are significantly less likely to use key inputs such as labour,

fodder and vaccinations. The differential rates of use of inputs and services do not indicate discrimination

in access per se as they may be equally driven by differences in herd structure as women are less likely

to own cattle which are more (purchased) input-intensive. Despite these differences the share of

households with only female livestock managers is not completely disadvantaged in terms of market

access as 40 per cent sold any livestock. When considering the scale of production, female managers are

significantly more commercially oriented with 37 per cent of their total livestock production being sold

on the market compared to only 30 per cent for households with men involved in livestock management.

This highlights the fact that despite the obstacles faced by women in the livestock sector commercial-

ization of production may not necessarily be affected.


4. SYSTEMIC CONSTRAINTS AND UPGRADING OPPORTUNITIES

4.1 Related to Business Enabling Environment

4.1.1. Doing business

The ability to do business is important not only for commercial operations internally but also for attracting

Foreign Direct Investment (FDI). According to the World Bank, Tanzania ranks 127 of 183 countries in

doing business (Figure 15), slightly better than the regional average is 137. The World Economic Forum

Competitiveness Report 2011-2012 classifies Tanzania as one of 37 factor-driven economies and ranks

it 120 (seven places down from the 113 the previous year) out of 142. The major reasons for this lowly

position, in order of priority, are access to finance, corruption, tax rates, poor infrastructure, inflation and

inefficient government bureaucracy. This bodes ill for external and internal investment in new or the

expansion of existing businesses. Under the existing and likely future conditions it remains to be seen if

the necessary investments will be made to take the soya bean chain to the next level.

Figure 15 Doing business in Tanzania (adapted from World Bank 2012)

4.1.2. Legislation and regulations

Tanzania is widely regarded as a country with a heavy regulatory burden that is only lightly implemented.

Multiple – and often conflicting – legal instruments under the jurisdiction of multiple ministries and other

official bodies impinge upon the agricultural sector (Box 5). Under ASDP, for example the target for

regulations in place in 2009/2010 was four (up from one in 2005/2006) with that target being achieved.

The 2010/2011 target for legislation was 13 but the actual number was 20 (up from nine in 2005/2006).

Six new acts on agricultural marketing were approved in 2004/2005 and a further six pieces of legislation

were enacted in 2009. Among the new rules and regulations are:

! The Food, Drugs and Cosmetics Act No 1 of 2003 (establishes the Tanzania Food and

Drugs Authority (TFDA);

! The Tanzania Bureau of Standards Code No TZS 109:1987;


! Fertilizer and Animal Foodstuffs Act (1972);

! Seeds Act No 18 (2003);

! Cooperative Societies Act No 20 (2003);

! Food Security Act (1991);

! Warehouse Receipts Regulation and Warehouse Act No 37 (2007);

! Executive Agency (National Food Reserve Agency) (Establishment) Order (2008);

! The Standards Act No 2 (2009);

! The Cereal and Other Produce Act (2009);

! Fertilizer Bill (2009);

! Food Labelling Regulations;

! Food Import and Export Regulations;

! Standard TZS 538:1999- Packaging and labelling of foods;

! Standard TZS 34 (Part 1): 1979 Animal feeds and feeding stuffs .

! Additional laws and regulations pertaining to specific types of contracts (crop related

legislation, banking law, microfinance, warehouse receipts and secured transactions).

Foundation seed imports have been liberalized since 2009. Seed monopolies, such as that held by ASA,

have been removed and at least 16 private seed companies were operating in Tanzania in September 2013.

Breeder seeds are soon to be made available to private companies. The five national seed farms no longer

monopolize production of foundation seeds and registered seed producers are allowed to produce quality

declared seed that conforms to minimum standards for the crop. Breeders’ seed is approved by the

National Variety Release Committee. The approval process for importing seed remains bureaucratic,

however, involving at least 10 steps and five regulatory agencies and takes at least six months to complete.

Varieties are subject to continued scrutiny after import by the Tropical Pesticides Research Institute

(TPRI) and Tanzania Official Seed Certification Institute (TOSCI). Seed certifications outside the East

African Community (EAC) are usually not recognized. TPRI regulations conflict with the Seeds Act of

2003 and to be sure of compliance and to minimize harassment, investors in the seed sector need to get

phytocertificates from both the Plant Health Service (PHS) and TPRI. The sanitary and phytosanitary

(SPS) regime is thus most disadvantageous for agricultural producers who have considerable difficulty

in obtaining seeds of high yield varieties. Agricultural trade does not realize its potential and Tanzania’s

crops are among the lowest yields of any country in the region. The effects of seed regulation and

certification may be particularly pernicious for women and their children who might otherwise be more

food secure if they had access to higher yielding varieties.

Box 5: Sound and fury – over regulation and under enforcement of crop trade activities

Internal trading

• Free Tax Identification Number (TIN) from Tanzania Revenue Authority (TRA) to allow for taxation;

• Business licence from Business Registrations Licensing Agency (BRELA) of Ministry of Industry

and Trade, after obtaining income tax payment licence from TRA;

• Premise inspection certificate from Tanzania Food and Drugs Authority (TFDA) for factories, mills,

shops and related premises.

Export and import trading

• Free TIN from TRA for all businesses to allow for taxation;

• Business/export licence from BRELA after income tax payment to TRA;

• Export SPS certificate for each lot exported issued by Plant Health Service;

• Import permit issued by the relevant authority in importing country.


4.1.3 Land rights and land markets

Land tenure in Tanzania is in the form of a right of occupancy and leasehold. All land belongs to the

nation and there is no freehold system. The primary legislation governing land ownership is the Land Act

No 4 of 1999 as well as the Village Act No 5 of 1999. Under the Land Act, there are several categories

of land but the most relevant is general land. This is the land for which a right of occupancy or leasehold

may be granted by the Commissioner for Lands upon application and fulfilment of certain conditions.

Village land is administered at grass roots level for which a Certificate of Title can be granted to the

holder(s).

The Village Land Act provides for a customary certificate of occupancy. This provision, presumably, was

to provide those occupying village land with a mechanism for using it as collateral. Banks are reluctant,

however, to take village land as collateral. Banks take collateral to secure loans with the understanding

that in case of default the collateral can be sold to cover their loss. Collateral is therefore only as good

as the market demand is for the asset. Sale of village land to someone outside the village requires that its

status be changed from village to general. Depending on the size of the parcel this change could require

approval at the village, district, region or even national level and may include presidential approval. The

process makes village land illiquid and thus unsuitable for collateral. Some banks have, however,

performed due diligence at the village level to ascertain whether local villagers would be willing to buy

the land in case of repossession. In this case, the banks are restricting possible demand for practical

reasons but this limits the value on resale. Regardless of the buyer the barriers that the Village Land Act

raises with regard to resale make the policy anti-credit.

In theory, therefore, rights to land can be obtained by investors for varying periods. Anecdotal evidence

suggests that it is easier said than done. Lack of transparency in land use, land rights and land ownership

matters that affects small holders, large farmers, businesses and local and foreign potential investors. It

is, indeed, considered by some to be among the most important factors that are considered by potential

large scale investors.

4.1.4 Government policy for the soya bean and general crop production

A supportive policy and regulatory environment has been evolving only gradually in Tanzania. The result

has been a very low level of FDI in the country’s agribusiness sector. Several initiatives launched recently

appear to be incompatible with the goal of strengthening private sector commitments to the agricultural

sector in general. The effects of these emerging policies have yet to be fully determined.

The Agricultural and Livestock Policy (ALP) was developed under the then Ministry of Agriculture,

where “agriculture” included both crops and livestock. The goal of the policy is to “...improve the

well-being of the people whose principle occupation and way of life is based on agriculture and most of

whom are small holder farmers and livestock keepers…the focus of this policy is to commercialize

agriculture so as to increase income levels.” In this policy, Government redefined its role and recognized

the need for the private sector to assume a dominant role while Government would perform core public

sector support functions which, inter alia, included research, training, extension, policy formulation,

information services, sanitary regulations, quality control, environmental protection, creation of optimal

market conditions and promotion of agricultural growth. These functions were purposefully selected

because they were deemed less amenable to privatization even though it was envisaged that in the long

term some of the functions could be shifted to the private sector.

The Agriculture Sector Development Strategy (ASDS) introduced in 2001 and the Agriculture Sector

Development Programme (ASDP) introduced in 2002 are managed by MAFC. They are a sector wide

framework for managing the institutional, expenditure and investment development of the sector. ASDP


has not replaced existing planning and implementation mechanisms but aims to facilitate the process,

emphasize priorities and monitor overall progress. ASDP covers a range of priorities that includes, among

many others, irrigation and water management, better land husbandry, mechanization, storage and other

postharvest activities, agroprocessing, community empowerment and agricultural information. Among

the important constraints to achieving Tanzania’s agricultural growth targets that are acknowledged by

ASDP are high transaction costs due to the poor state or lack of infrastructure and especially rural roads.

A stated objective of the programme is to improve the quality and quantity of public investment in

physical infrastructure through more devolved, technically sound planning and appraisal. The ASDP

results framework should track development objectives against established indicators but it has proved

difficult for outsiders to find official progress reports against these measures. Such a failure symbolizes

a trend in which development plans are adequate or more than adequate but that implementation,

monitoring and evaluation are unsuccessful.

‘kilimo kwanza’ is a strategy launched by President Kikwete in 2009. It aims to energize and coordinate

government efforts to transform agriculture. The strategy is based on 10 pillars (Box 6) each of which

require political will, long term financing, and regulatory reform if they are to be successful. The initiative

focuses on many issues including provision inputs, strengthening of the national Food Reserve Agency’s

food reserve and improvement of the rural road network, irrigation and storage facilities. ‘kilimo kwanza’

is slowly gaining momentum. Value chain development for soya bean would afford opportunities to

leverage kilimo kwanza through growth and by critical interventions that could help towards a more

commercial agenda. To have a real and sustainable economic impact, however, supply chain development

initiatives must operate in an environment in which government and the private sector support each other.

In such a supportive environment bit trust and joint action are of fundamental importance. In the past

opportunities for mutual problem solving and for open discussion and resolution between public and

private sector have been limited. Priority actions could be directed at quality and standards enforcement,

infrastructure development and trade policy.

Box 6: ‘KILIMO KWANZA’ – The Principal Points and the Ten Pillars

Principal Points

A national resolve to accelerate agricultural transformation

Agriculture as an economic priority of Tanzanians

This is not a new strategy but is intended to be a catalyst for the implementation of ASDP with

additional features

In contrast to what happened in the past, the private sector is, in principle, to be the lead implementing

agent of ‘kilimo kwanza’

The strategy was formulated by the Tanzania National Business Council which is a forum for public-

private dialogue

Ten Pillars

1. Mobilize political will and commitment of all Tanzanians to ‘kilimo kwanza’

2. A Tanzanian Agricultural Development Bank to help with financing ‘kilimo kwanza’

3. Emphasize good governance, better coordination and monitoring and evaluation

4. Prioritize what is produced and marketed with food crops given top priority

5. Land access and tenure security

6. Incentives to attract and retain private sector investments in agriculture

7. Establish industries for backward and forward linkages and value addition

8. Science, technology and human resources

9. Infrastructure development


The Tanzania Soybean Development Strategy (TSDS) 2010-2020 was produced in 2010 by the Crop

Promotion Service of the Crop Development Division of MAFC. TSDS is one of many initiatives to

encourage private sector investment. It is said to be consistent with the ASDS, the National Strategy for

Growth and the Reduction of Poverty (NSGRP) and the Tanzania Development Vision 2025 (TDV). A

National Soybean Coordinating Unit (NSCU) is proposed with MAFC as Chairman and comprising

experts from MAFC, Ministry of Livestock Development, Prime Minister’s Office for Regional

Administration and Local Government, Ministry of Water and Irrigation, Ministry of Industry, Trade and

Marketing, Ministry of Natural Resource and Tourism and Ministry of Lands, Housing and Human

Settlements Development. NSCU will coordinate TSDS in provision of strategic policy guidance, key

institutional linkages and performance monitoring to ensure that goals and objectives are achieved. Also

proposed are Special Units for Implementation (SUIT) that will include experts and technicians from the

ministries already mentioned and will include the private sector. Under NSCU leadership, SUIT would

be responsible for implementing TSDS and ensuring that its goals and objectives are achieved (Box 7).

Were it to be implemented successfully the strategy would totally transform the soya bean scenario and

increase the soya bean output of 5000 tonnes of 2010 by 400 times to 2 million tonnes in 2020 (Table 10).

The special budget requirement in order for the strategy to succeed is calculated at initial year’s budget

of TSh 1.555 billion (US$ 962 848) followed by annual increments of 10 per cent. Donors are requested

to support the programme. In late 2013 the programme was already well behind its targets.

Table 10 Projected targets with full implementation of TSDS, 2010-2020

YearCultivated area

(ha)

Production

(tonnes)

Product destination

Processing (%) Export (%) Seed (tonnes)

2010 3 500 5 000 2 75 35

2011 5 000 8 500 5 65 50

2012 17 500 25 000 10 55 700

2013 35 000 50 000 30 50 1 400

2014 70 000 100 000 30 50 2 800

2015 140 000 200 000 40 50 5 600

2016 280 000 400 000 40 45 11 200

2017 560 000 800 000 40 45 16 800

2018 840 000 1 200 000 40 40 22 400

2019 1 180 000 1 600 000 40 35 28 000

2020 1 400 000 2 000 000 40 35 28 000

Source: MAFC 2010

Box 7: Objectives of the Tanzania Soybean Development Strategy

Main objectiveThe major objective of the strategy is to explore the existing potential for soya bean in the country.

Specific objectivesI. increase production from 3500 tonnes on 3000 ha in 2010 to 2 million tonnes on 1.4 million ha by 2020;

ii. increase soya bean consumption from 0.5 kg per person per year in 2010 to 15.0 kg in 2020;

iii. increase local soya bean processing into various products;

iv. ensure a significant increase in the contribution of soya bean to poverty reduction, malnutrition,

employment and national GDP; and

v. increase Tanzania’s competitiveness as a soya bean producer and exporter in Africa and worldwide.


Government accepts the urgent need to channel funding to the agricultural sector but the plans appear

short sighted. Private institutions in the financial sector have avoided lending to agriculture because of

the risks involved. Should government decide to channel funding to agriculture in spite of these risks,

rather than focussing on addressing them it may well squander the limited resources that it has. The

Private Agricultural Sector Support Programme (PASS) works to encourage growth in the agricultural

sector. It provides business plan support to entrepreneurs and then facilitates access to credit with the

support of a guarantee that varies from 30 to 70 per cent. It is not a first-loss guarantee so lenders must

exercise their recovery methods before PASS provides coverage.

In general government allocation of budgetary resources to the agricultural sector has been increasing

gradually but from a very low base – the agriculture budget was just over 7 per cent of total government

expenditure in 2010 which was an increase of over 30 per cent compared to the previous year. The

budgetary commitment still remains, however, far below the required levels and is mostly committed

almost exclusively to on-farm activities and almost completely disregards the demand end of farm to

market chains. Neither market nor supply chain development receive any funding from government.

4.1.5 Food safety and quality

Human well-being is inextricably linked to food safety and consumer health. The production chain should

aim to deliver safe food and high quality products to consumers. Health considerations are therefore of

paramount importance in the early as well as the later stages of the chain. Food safety and consumer

health issues should start by focussing on agricultural practices and farm management at the producer

level, continue through the marketing chain, product, personnel and premises cleanliness at processing

and finally at presentation to the consumer: some companies attempt to adhere to this precept (Figure 16).

Adequate legislation has been enacted to assure food safety and consumer health throughout the chain but

the laws and regulations are not always strictly enforced.

Figure 16 The food safety policy of Power Foods Ltd, Dar es Salaam


4.1.6 Public infrastructure

It is commonplace to read that Tanzania is well endowed with public infrastructure including roads, rail,

electricity, water, ports, telecommunications and markets. Whereas this may be generally true it is not the

whole truth.

Trunk roads that are tarmac (4000 kilometres of Tanzania’s 85 000 kilometre main road network was

paved in 2009) are generally in fair to good condition. Such roads are often narrow, however, resulting

in long journey times as traffic is held up by heavy haulage vehicles that lead to a high risk of accidents

as drivers jostle for position. Restrictions on weight mean that many trucks cannot be loaded to capacity,

further increasing costs for farmers and traders. Innumerable checks on vehicle weight, even on the same

stretch of road, result in further massive cost increases due to the time wasted (Figure 17) and the need,

often, to pay facilitation fees to secure a right of passage.

Unpaved rural feeder roads are often in poor condition resulting in further costs and delays due axle and

suspension damage. Many such feeder roads are impassable after heavy rains due to broken bridges and

waiting times may be extended for hours or days due to flooding. “Good tarmac roads” can reduce

journey times to less than half compared to a dirt road, as for example on the 240 km Tunduma-

Sumbawanga link in 2012 which when complete is expected to lower journey times for a standard light

car from more than six to less than three hours. Poor rural (and some main) roads result in high to very

high transport costs that are estimated to be four times the cost per tonne kilometre than on paved trunk

roads. High road transport costs mean that rural producers do not gain the full benefits of high consumer

prices and also result in higher input costs. Inadequate road infrastructure also has an impact on food

security as it slows down or restricts the flow of food from surplus to deficit areas.

Figure 17 Traffic anarchy at a weighbridge on the Dar es Salaam-Morogoro trunk road

(Photo: Trevor Wilson)


The rail system (Tanzania-Zambia Railway (TAZARA) and Tanzania Railways) is extremely inefficient

and only TAZARA passes through the Southern Highlands. The Central Line (Dar es Salaam to Kigoma)

operates two days per week (at best) and many transporters have changed from rail to road – further

extending journey time for other users – for such items as copper sheeting from Zambia. The northern

line that connected Tanga to Arusha and Kenya with a branch to the Central Line (“cannibalized” from

the ill-fated Groundnut Scheme Mtwara-Nachingwea line in the 1960s) has been defunct for many years.

Dar es Salaam and the newly opened Songwe International Airport some 20 km from Mbeya are the only

airports that can take large transport aircraft and that could be used for export of perishable produce from

the Southern Highlands in the foreseeable future. The Kilimanjaro International Airport in Arusha Region

is another outlet for perishable produce from the northern areas of the country.

The electricity supply is patchy in distribution and much of rural Tanzania is not connected to the 33kVa

grid. Supply is often intermittent and interrupted for several hours at a time. Telecommunications have

improved vastly from the 1980s when it could take as long as two days to get a long distance connection

from rural areas. Mobile services that also allow rapid and sure money transfer need to be complemented,

however, by high speed (and dependable) internet for larger files in order to improve business efficiency.

4.2 Related to Vertical and Horizontal Linkages and Value Chain Governance

4.2.1 Integration

There are effectively very limited vertical and horizontal linkages in the value chain in the small scale

sector. Participants and enterprises in general do not cooperate or coordinate . There is some vertical

integration where agents act as buyers and sellers for some of the processors. There are traders

associations in every region and in all urban centres but there is little cooperation amongst them. They

seem to perceive themselves as advocacy groups to local government or municipalities in their locations.

There is no umbrella organization for the entire small scale indigenous sector that focuses on its

development, supports cooperation or provides relevant information among the various market

participants. There is vertical integration in the industrial poultry sector where soya is assuming an

increasingly important position as a feed ingredient (Box 8).

Box 8: Onwards and ever upwards -- Interchick, a vertical integration model for poultry

production and processing

In 1994 the International Finance Corporation’s African Enterprise Fund (AEF) lent US$ 1 million to TanzaniaBreeders and Feedmills Ltd (Tanbreed), a company set up in 1992 at Mbezi on the outskirts of Dar es Salaam.Tanbreed was an outgrowth of Interchick and both are universally known as Interchick. Over the years Interchickhas become a large vertically integrated operation comprising feed mills, hatchery, contract growers and aprocessing facility. It provides feed and chicks to contract growers and plans to expand the present number.Application of good production practices has reduced animal mortality from 30 per cent to 10 per cent (althougheducation of its employees in biosecurity remains a problem). Almost 70 per cent of its business is in the greaterDar es Salaam area. To facilitate growing product demand and egg shortage Interchick imports some processedpoultry products, chicks and eggs from its Kenyan parent company Kenchick and its Zambian associate Hybrid.

Factors limiting expansion include distribution logistics, limitations of hatchery equipment and capacity, eggavailability, the need for slaughter line upgrades and maintenance, limited human resources capacity and highinvestment capital costs. Expansion strategies include purchase of another refrigerated truck to aid distribution,modification of the slaughter line to improve efficiency, expansion of hatchery facilities from 260 000 to 600 000chicks (3-week cycle), increasing the number and volume of grower contracts, consumer awareness programmes,implementing value added processing and adoption of quantity management programmes and HACCP basedsystems. Future initiatives include identifying alternative sources of feed protein (soya) to minimize the risk ofintroducing salmonella and eliminating the quality issues sometimes associated with fish protein based diets (fishysmell and taste). To overcome problems in obtaining parent stock and quality feed a new integrated facility andfarm were set up near Morogoro in February 2012. There are plans for future export of products.


As a result of the 2009 Act there were amendments to and effective subsuming of the Food Security Act8

which was redefined as “An Act to establish an Authority to regulate production, processing and marketing of cereals

and other produce; to provide for the national food security assurance mechanisms and for other related matters."

4.2.2 Governance

The Southern Highlands Soya Bean Value Chain is largely driven by market forces with respect to prices

and their up- and down-stream effects on supply and activities along the chain. The major issues include:

Lack of governance -- The governance mechanism in the chain is underdeveloped, participants

operate in an uncoordinated and unorganized fashion and if rules exist they are often ignored;

Poor supervision of lower end associations – The Crop Boards have the mandate to coordinate

stakeholders but have neither the personnel nor other resources to do this;

Too many small players and small transactions -- The chain is characterized by too many small

producers that results in increased costs;

Lack of market coordination – No lead organization has a coordinating role in relation to markets,

technology and information such that producers and processors have no incentives for improving

their product nor the chain process to promote sustainable income earning opportunities;

Unclear and conflicting roles and mandates in district councils – District Councils have been

given responsibility for many former central government activities but have neither the skills nor

the staff to perform these effectively;

Industry associations – Associations are weak at most levels of the chain;

Operating procedures – Standard procedures are inadequately or not enforced in part due to

relaxation of enforcement of production and trade regulations; and

Integration – There is little horizontal and vertical integration of producers, mid chain actors and

retailers other than in the broiler segment.

4.3 Related to Support Services

4.3.1 Overview

A service can be defined as a function performed or offered by a provider and used by a customer to the

latter’s benefit. Numerous service suppliers purport to operate in Tanzania’s soya bean value chain.

These include government and private providers who supply inputs, extension services, research and

development, training, financial services, market information and regulatory services. The public sector

role has been elaborated in numerous documents that state that Government, in collaboration with other

stakeholders, will provide core public services such as extension, information, research, training and

infrastructure, policy formulation, a regulatory framework and protection of the environment. Public

sector roles will be implemented by the Agricultural Sector Lead Ministries (ALM) including MAFC,

Ministry of Livestock and Fisheries Development (MLFD), the Prime Minister’s Office-Regional

Administration and Local Government (PMO-RALG), the President’s Office-Planning Commission, the

Ministry of Water and Irrigation (MWI) and the Ministry of Industries, Trade and Marketing (MITM).

Other services in related Ministries (TFDA, TBS, SIDO and the Centre for Agricultural Mechanisation

and Rural Technology (CAMARTEC)) also play important roles. The private sector, particularly under

‘kilimo kwanza’, will be encouraged to perform production, marketing and processing functions.

4.3.2 The Cereals and Other Produce Board

The Cereals and Other Produce Board came into being on enactment of The Cereal and Other Produce Act

(“An Act to make provisions for the establishment of the Cereals and Other Produce Board, for promotion

and development of cereals and other agricultural produce and to provide for other related matters”) in

2009 . The main functions of the Board (Section 6 (1)) are to carry out commercial activities and such8


other activities as are necessary, advantageous or proper for the development of the cereals and other

produce industry. The Board may provide facilitation of (Section 6 (2)) (a) agricultural research on cereals

and other produce; (b) extension services to growers and other dealers of cereals and other produce; ©

input services, including fertilizers and agrochemicals; (d) promotion of production, marketing, processing

and storage of cereals and other produce;(e) the dissemination of information or data relating to cereals

and other produce;(f) the promotion of technological advancement in cereals and other produce; and (g)

the provision of assistance in the formation of farmers Co-operatives or Organisations. The Board shall

(Section , subject to the provisions of this Act and any other written law, perform any commercial function

or hold interest in any undertaking or project associated with cereals and other produce under this Act.

The commercial functions referred to under subsection (1) shall include to (Section 7 (2)) (a) purchase and

sell cereals and other produce at a competitive price; (b) import or export cereals and other produce; ©

process cereals and other produce; (d) provide warehousing services for cereals and other produce; (e)

provide grain and other produce, cleaning, drying, weighing, grading and packaging services according

to market standards; and (f) perform any other commercial functions approved by the Minister for the

development of trade in cereals and other produce. It shall be the duty of the Board (Section 8 (2) in the

exercise of its powers and in the performance of its functions under this Act, to act in such a manner as

it appears to it appropriate for the purpose of promoting the quality and competitiveness of the cereals and

other produce industry within and outside Tanzania.

The Act also made provision (Section 15 (1)) for the establishment of a Cereals and Other Produce Zonal

Council in each of the seven agricultural zones of the country. The functions of Zonal Councils (Section

15 (3)) are to: (a) promote cereal and other produce including formation of farmers associations and other

bodies in their respective areas; (b) act as a consultative forum for cereals and other produce on price

negotiations between farmers and buyers or traders of the cereals and other produce; © establish and

operate a market information system for cereals, other produces and agricultural inputs in their respective

areas; (d) promote the use of weights, measures and grading standards for cereals and other produce; (e)

collaborate with the Board and local government authorities in provisions of agricultural educations in

respect to the cereals and other produces in their areas of jurisdiction; (f) perform such other functions as

the Council deems necessary for the development of the cereal and other produce industry; and (g) prepare

and promote zonal production targets. The funds and resources of the Board (Section 17) are to consist

of: (a) such sums of money as may be appropriated by Parliament; (b) any money raised by way of loans,

donations or grants from, within and outside Tanzania; © any loan or subsidy granted to the Board by the

Government or any other person; (d) any money derived from commercial activities; and (e) such sums

of money or property which may become payable to or vested in the Board under this Act or any other

written law or in respect of any matter incidental to the carrying out of its functions.

The 2009 Act replaces an earlier one under which Crop Boards were restructured to resume regulatory

functions leaving commercial activities to the Cooperative Unions and the private sector. In the new Act

the private sector is once again, not only neglected, but also actively excluded. The general opinion within

the country is that the Board is not doing as much harm as it might do due to the perennial lack of

personnel, equipment and finances.

4.3.3 Value chain finance

Much of the soya bean chain has need of some capital and some recurrent financing. Up to early 2013

it has been impossible for most chain participants to obtain finance. Many financial institutions provide

some credit for agriculture (see Section 3.3 and Table 4) but there is no known subvention to soya beans

other than by CRS. NMB has a large agricultural portfolio which could be extended to soya in the future.

MFIs and SACCOS are possible sources of credit and finance. Finance in and credit for the soya bean

value chain is probably restricted by high interest rates, high investment costs in some enterprises

(especially fortified food processing) and long periods of return to the initial investment. There is also


a lack of awareness among the stakeholders lower down the chain of the need for investment. Some major

characteristics of finance in the chain are:

! large traders are self-financing or have access via informal sources such that they can

dominate markets and squeeze out small operators who cannot pay immediately in cash;

! the large finance institutions lack understanding of the financial requirements of soya

beans;

! there are no favourable financial support packages, preferential interest rate programmes,

or guarantee schemes that could ease access to finance;

! traditional small scale producers, traders and small processors, with few exceptions, do

not have the knowledge or skills to develop viable business plans or loan applications and

so far have received little support in this area; and

! there is no concept of integrated value chain finance such as a combined loan scheme for

interdependent small scale producers, traders, processors and retailers.

4.3.4 Insurance

As far as can be ascertained there are no insurance schemes for smallholder crops in Tanzania.

4.3.5 Research services

The fundamental purpose of research is to develop technologies that address problems affecting the

industry in order to increase agricultural livestock production and productivity and to augment the

industry’s contribution to the national economy and improved livelihoods. Research is undertaken by

various stakeholders. The National Agricultural Research System (NARS) comprises a network of public,

parastatal and private research institutions. The lead public institution for crops is the Department of

Research and Training (DRT) of MAFC. Two semiautonomous institutions – TPRI under MAFC and

CAMARTEC under the Ministry of Industries Trade and Marketing (MITM) are also publicly funded

bodies. SUA is the main academic research body. The University of Dar es Salaam (UDSM), Moshi

University College of Cooperative and Business Studies (MUCCOBS), Mzumbe University, the Open

University of Tanzania (OUT) and the Institute of Rural Development Planning (IRDP) also participate

in some aspects of agricultural research and training. Private institutions for tea, coffee and tobacco

undertake their own research. Many NGOs do some applied research and contribute to training. Five

institutions that are part of the Consultative Group for International Agricultural Research (CGIAR) –

IITA, CIAT, AVRDC, the International Rice Research Institute (IRRI) and the Africa Rice Center

(AfricaRice, formerly the West Africa Rice Development Association (WARDA) – work closely with the

NARS: several other CGIAR centres have a smaller presence in Tanzania as does ASARECA.

To assist research centres to plan and implement research programmes relevant to the respective zones,

the Client Oriented Research Management approach is employed, for which funding is provided by the

zonal offices under the Zonal Steering Committees (ZSC) through the Zonal Agricultural Research and

Development Fund (ZARDEF). Such committees are made up of Regional and District officials,

researchers, extension officers and producers (who must comprise 50 per cent of the committee). Strategic

research interventions theoretically follow a commodity value chain approach.

The long tradition of agricultural research has been jeopardized since Independence by reduced personnel

and funding. In view of the importance of agriculture to the economy and its role in food security and

human welfare, Government’s allocation to research is pitiful. External donors have provided limited and

intermittent funding for research but have failed to view their commitments as long term. As for extension

services, fractionation of research through devolvement and the presumed advantages of zonal priorities

have not assisted progress. Uyole ARI (Box 9) is the only centre doing research on soya beans in 2013

(see Section 3.4.3. Genetic resources following Table 5 for a discussion of historical soya research).


Farmers have limited knowledge of soya bean production and of its potential as food and as feed for

livestock and as a soil conditioner and improver. Research (and extension) services have been particularly

weak in supporting soya bean production.

4.3.6 Extension services

Extension historically and traditionally has been financed entirely by the public sector. In general there

has been far too much direct government involvement in the management of extension in spite of

declining resources. Following independence, coordination and collaboration with the private sector,

Faith Based Organizations (FBO) and other NGOs remained minimal for many years. Since the 1990s,

however, there has been some provision of extension services by the private sector as farmer led initiatives

and private agribusinesses supplying fertilizers and agrochemicals have started to supplement public

extension services.

The National Agriculture and Livestock Extension Policy and Implementation Guidelines (NALPIG) were

developed to elaborate the policies on extension contained in the Agriculture and Livestock Policy of

1997. NALPIG were prepared to advise staff involved in providing crop and livestock extension services

to the farm families of mainland Tanzania. Although they were prepared by the public service the

guidelines were intended to assist anyone involved in extension work including Government and NGO

staff. NALPIG is being reviewed to incorporate institutional and policy reforms that have taken place

since its original adoption The new policy will seek to transform agricultural extension services so that

they become participatory, demand driven, market oriented, cost effective, gender sensitive and are

provided in a collaborative manner through involvement of a broad range of stakeholders.

Extension workers are trained at one of nine Ministry of Agriculture Training Institutes (MATI) located

around Tanzania. MATIs provide training that results in the award of a Diploma or a Certificate in various

aspects of crop production and crop protection.

Box 9: Uyole Agricultural Research and Training Institute

Uyole ARI, located 10 kilometres to the north of Mbeya on the main north-south highway is the

headquarters for the Southern Highlands Agricultural Research Zone. In common with most other

ARIs, its chequered history has not been favourable to its research output and relevance. Uyole was

established early in the colonial period as a research centre for the Southern Highlands area. After

Independence funding fell off and brains were drained away. Following an agreement between the

Tanzanian Government and the Governments of the five Nordic countries -- Denmark, Finland,

Iceland, Norway and Sweden – in 1970 an agricultural research and training institute was established

at Mbeya. Crop research began in 1972 and livestock research in 1975. Change was not slow in

coming and on 1 July 1976 the institute became a Public Corporation as the "Uyole Agricultural

Centre". The Uyole Agricultural Centre ceased to operate as a parastatal in July 1993 and reverted to

the then Ministry of Agriculture under the Department of Research and Development when it was

rebranded as the Ministry of Agriculture Research and Training Institute (MARTI). After further

reorganization under the current MARC it is now administratively responsible to the DRT.

Uyole-ARI now comprises a research institute, an extension unit and a highly mechanised commercial

farm. Research is carried out throughout the Southern Highlands in Mbeya, Iringa, Ruvuma and

Rukwa Regions. Research follows a multidisciplinary approach and is directed at food crops

(including soya and wheat), livestock, agricultural engineering, food technology and agricultural

economics. The only cash crop on which a large scale programme is carried out is pyrethrum as this

is an important component in Southern Highlands farming systems.


The MATIs generally have few teaching staff and staff houses and insufficient student accommodation.

At most institutes teaching facilities are old and obsolete, infrastructure and equipment is in a poor state

of repair and farm units are in need of rehabilitation and retooling for the practical training of students.

They do, however, have land suitable for expansion and are strategically located to meet training

requirements. Emerging aspects, or aspects that are likely to and should emerge, of the soya bean chain

such as commercial production, private input supply and processing have specific training needs that

require re-designing of training curricula and development of new ones.

As indicated in Section 3.3, not enough producers have received extension advice. This is not surprising

as, among other factors such as perceived need by producers and availability of transport and equipment

for workers, there is a severe deficit of extension workers in comparison to the need. The situation has

not been improved by the decentralization of extension from MAFC to the local governments who are

perennially short of funds. There is clearly a need for massive additional training of field extension staff

using MATIs and retraining of the existing ones to equip them with new technologies (and motivation

actually to get out to the field).

In order to be fully effective in support of agricultural crop value chains the extension services should:

! be strengthened and help develop the private sector as part of the implementation of

‘kilimo kwanza’;

! shift their focus to diversifying market demands and export opportunities;

! encourage effective farmer participation in the value chain to ensure competitiveness;

! empower farmers and encourage links with national and international organisations;!

develop new and promote current extension models with farmer trainer to all parts of the

country;

! delegate ownership of extension service to farmers and make extension workers more

accountable; and

! create a forum where public and private partners (including producers) come together to

develop common policies and standards.

4.3.7 Seed supply

Until 2009 seed production and supply was restricted to the public and quasipublic bodies (see discussion

in Section 4.1.2. Legislation and regulations, following Box 5). Liberation has not, however, greatly

improved the situation. Uyole ARI and SUA are the only two organizations in the country that formally

breed and bulk seed. Only two varieties – Uyole S1 from Uyole ARI and Bussier from SUA – are

registered for use in the country. Supplies are limited and neither variety is popular with farmers. ASA

has stocks of pre-basic and basic seed and claims to be able to produce TOSCI certified seed within a

season. None of the member companies of the Tanzania Seed Traders Association (TASTA) has stocks

of soya seed nor has ever sold any. This situation is clearly a constraint to soya production but perhaps

not to the extent it might be. Tanzanian farmers, small as well as large scale, do what farmers the world

over do when faced with this problem – they find ways round it. The low supply of seed and the

restriction on varieties are, however, undoubtedly hindering the development of soya bean production in

the country.

4.3.8 Market information

Linking farmers to markets is regarded as a milestone in promoting the growth of agriculture and the

reduction of poverty. The World Bank sees enhanced smallholder competitiveness and facilitation of

market entry as well as improved market access and the establishment of efficient value chains as

important factors in agricultural development. Pillar 2 of the Comprehensive African Agriculture

Development Programme (CAADP) is entitled “Market Access” and most African governments, including


that of Tanzania, have been developing policies and programmes for linking farmers to domestic, regional

and international markets. Improving the amount and reliability of agricultural data available to decision

makers and stakeholders in value chains, including both public and private sectors, is thus a precondition

for formulating effective agricultural and rural sector investments that could help farmers to gain access

to market opportunities.

Market data have been collected in Tanzania over many years but have seldom been put to good use and

usually not to any use at all. The National Bureau of Statistics (NBS) is the main source of market data

for Tanzania but data quality remains a major concern. Much of the data collected (and sometimes

collated) are inadequate to varying degrees as they lack consistency through time and between sources and

are littered by many gaps. Data collection is not embedded in the Tanzanian psyche. There is lack of

responsibility for verification in order to establish their adequacy at all levels. In addition, data are often

not readily accessible to users for a variety of reasons and, if available, are not always put to optimal use

as they are not presented in a timely manner, are not in the form required and are not disaggregated to

appropriate levels.

There is increasing awareness of the need for accurate, consistent, timely and accessible market

information and movements. Several international organizations have set up or are setting up Market

Information Systems (MIS). Among these relevant to the future of soya bean production are:

! Foodnet – a partnership among IITA, CRS, ASARECA and Agricultural Cooperative

Development International and Volunteers in Overseas Cooperative Assistance

(ACDI/VOCA).

! The Famine Early Warning Systems Network (FEWS NET) -- funded by USAID,

monitors trends in staple food prices in East African countries vulnerable to food

insecurity and whose Price Bulletin provides a set of charts showing monthly prices in

the current marketing year in selected urban centres that allows users to compare current

trends with both five-year average prices (indicative of seasonal trends) and prices in the

previous year;

! Regional Agricultural Trade Intelligence Network (RATIN) – a service of the Eastern

Africa Grains Council (EAGC) that provides time-series data on prices, storage facilities,

cross-border trade and food balances: and

! ReliefWeb – a specialized service of the United Nations Office for the Coordination of

Humanitarian Affairs (OCHA).

These networks undoubtedly provide useful information on prices and trends for most of the main crops,

although not yet for soya beans (but they have been pre-emoted by the Market Committed of Tandala

market in Dar es Salaam (Figure 18). They are not necessarily, however, easy of access or use by the

individual small producer. In the meantime this last continues to obtain information on prices and demand

from traditional sources – neighbours, local traders and local shops and markets. Inevitably, this means

that he or she is a price taker and not a price maker.

4.3.9 Transport

Most soya beans are produced in the Songea area which is far from the major centres of consumption.

The country is reputed to be well endowed with road and rail communications but this is rather an

overstatement of the reality as much of the Southern Highlands still remains isolated from the trunk road

system. Soya beans usually move from the production to the consumption areas as part of mixed loads

with agents hiring space on any convenient vehicle, be it truck or bus. Transport costs are computed as

lump sums from Songea to Dar es Salaam or Arusha and average about TSh 150/kg or between 30 and

40 per cent of the farm gate price although for small lots costs may be as high ad TSh 250/kg.


Figure 18 Wholesale prices of food crops in Tandala market, Dar es Salaam for the period June

2012-June 2013 (note the price of soya has fallen by about TSh 200) (Photo: Trevor Wilson)


4.3.10 International and Non-Governmental Organizations

There has been little interest on the part of the international donor and charity communities in promoting

soya beans for food or as a healthy component of food in Tanzania. The outstanding exceptions have been

the use of soya in feeding programmes by the World Food Programme (WFP) and Save the Children.

Purchase from local sources seems to have stopped in September 2013 and products, when needed are

obtained from neighbouring countries.

CRS are implementing the ‘Soya ni Pesa’ Project with a US$ 10.5 million grant over a 4-year period from

USDA. The Project supports smallholders in Ruvuma and Njombe Regions in the Southern Highlands

via its implementing partner (also CRS) based in Njombe. The project provides training in various aspects

of group organization and of soya bean production (Annex 9). The technical emphasis is on seed quality

control, seed processing (including provision of machinery) and bulking of basic seed for general

distribution. In collaboration with N2Africa it is also attempting to persuade ASA and TOSCI to develop

standards for soya bean seed based on germination percentage and health and to assist in regular sampling

and testing of community-bulked seed. The Project and N2Africa intend to design and promote improved

soya bean intercropping with special attention to spacing and rotation and will support the availability of

the required inputs, particularly blended fertilizers and inoculants. Unfortunately due to poor germination

of seeds and less than optimal growing conditions for soya, Year 1 of the project was a virtual failure with

regard to field operations, leaving only three years to implement the technical aspects of the project.

Under its “Feed the Future” programme, USAID is implementing the ‘Tuboreshe Chacula’ Project. This

project aims to transform a critical segment of Tanzania’s agroprocessing industry – maize, rice and

sunflower oil – and dramatically increase the supply of and demand for nutritious and fortified foods

containing minerals and vitamins, especially among vulnerable populations. It is building the capacity

of local processors in quality management, safety, storage and distribution of products. The project is also

developing a partnership with a major international food group to distribute micronutrient powder in 1

gramme packets for home use. ‘Tuborshe Chacula’ is also carrying out a behaviour change campaign to

strengthen the demand for fortified foods and educate people on the importance of adding micronutrients

to their diets. The project has a duration of four years and most unfortunately has no plans for promoting

soya as food additive.

Several international agribusiness conglomerates and investment groups are investing or seeking to invest

in soya production both with large scale farmers. A part of the strategy of these initiatives is to link large

growers to smallholders in outgrower schemes.

In August 2012, following a visit to Brazil by the President of Tanzania, seven companies of this major

soya-producing country with interests in soya beans, sugar cane, maize and cotton cultivation expressed

an interest in investing in the agricultural sector in Tanzania. Amongst them, they sent 11 representatives

to Tanzania in order to investigate for themselves the investment potential in agriculture. The

representatives were provided with information on investment opportunities in the Southern Agricultural

Growth Corridor of Tanzania (SAGCOT) and the Government’s ‘kilimo kwanza’ activities by the

Executive Director of the Tanzania Investment Centre (TIC). The Brazilian delegation was also

enlightened on other benefits and incentives that could be derived from investing in the country.

Agricultural investment by such countries as Brazil will help to create a strong base of tax payers and

develop the agricultural sector in the country via the introduction and use of new technologies and

collaboration with local farmers.

Soya beans are considered by MAFC to provide (unspecified) opportunities for investment.


5. VISION AND STRATEGY FOR IMPROVED COMPETITIVENESS AND GROWTH

5.1 Vision

The problems of the industry are widely known as are the solutions. The quandary is to applythe latter to the former. If this can be achieved the Vision could be:

By 2025, a more efficient and sustainable soya bean chain supplying raw materials forfortification of human food and high quality protein for incorporation into animal feeds.

It also creates additional employment and contributes to increased incomes, reducedpoverty, improved food security and a better quality of life for all Tanzanians.

5.2 Strategic Issues Synthesis

5.2.1 Existing policies, strategies and programmes

A series of Components and Activities (Table 11) are being developed for TSDS that are based on the

main policy, strategy and programme activities organized and put in place by Government (Table 12).

Table 11 Components and activities of the Tanzania Soybean Development Strategy(TSDS)

Component Subcomponents

Governing and implementing institutions Formation of special institutions at national, regional,

district and ward levels; Formation of Tanzania Soya

Bean Association to unify producers

Soya bean subsector policy and regulation Solve constitutional and regulatory constraints;

Formulate policies to stimulate soya bean

development (review taxes and customs duties,

encourage investments via appropriate enabling

environment)

Capacity building (production) Research; extension; pest and disease management;

integrated pest and nutrient management;

demonstration farm

Capacity building (processing and use) Animal feed; human food; industrial use (oil,

pharmaceuticals, milk)

Seed development Seed certification and standards; production and

distribution; germplasm storage and conservation

Mechanization Small scale production; large scale production

Marketing Domestic market promotion; export market promotion

International cooperation International Soybean Association; South-South

cooperation; international development agencies

Source: adapted from MAFC 2010


Table 12 Existing policies, strategies and programmes of relevance to the soya bean value chain

Policy / Strategy /

ProgrammeLaunch year Objectives / areas of intervention

Tanzania Development Vision 2025 (TDV)http://www.tanzania.go.tz/vision.htm

In progress Tanzania of 2025 should be a nation imbued with five main attributes: high qualitylivelihood; peace, stability and unity; good governance; a well educated and learningsociety; and a competitive economy capable of producing sustainable growth andshared benefits. Among others, the vision aims at developing a diversified and semi-industrialized economy with a substantial industrial sector, macroeconomic stability, agrowth rate of 8% per annum or more, and an adequate level of physical infrastructure.It is also envisaged that fast growth will be pursued while effectively reversing currentadverse trends in the loss and degradation of environmental resources (such as forests,fisheries, fresh water, climate, soils, biodiversity) and in the accumulation of hazardoussubstances.

National Strategy for Growth andReduction of Poverty II (NSGRP II orMKUKUTA, for its acronyms in Swahili)http://www.tz.undp.org/docs/mkukutalldraft.pdf

2005 Builds on four key fundamentals: (I) efficient use and development of factors ofproduction, including human capital/resources, (ii) strengthening and establishing wellfunctioning institutions and markets, (iii) provision of infrastructure, and (iv) ensuringgood economic governance. on four strategic areas: (I) Providing targeted subsidy toselected food crops, identifying and promoting modern farm technologies and providingsupport for increased utilization of improved technologies for crop and livestockproduction; (ii) Identifying research activities and promoting food storagetechnologies/facilities and enhancing agro-processing as well as environmentallyfriendly technologies and practices especially for rural areas; (iii) Improving roadnetwork connectivity to facilitate flow of agricultural produce (outputs); and (iv)Improving stock management and monitoring of food situation in the country

Kilimo Kwanza (Agriculture First) 2009 Aims to accelerate agricultural transformation through fostering the modernization andcommercialization of agriculture, mainstreaming Government planning processes,allocating sufficient resources, mobilizing increased investments, and the mobilizationof the private sector

Agricultural Sector Development Strategy(ADDS)

2001 Aims at creating an enabling environment for improving agricultural productivity andprofitability, improving farm incomes, thereby contributing to reducing rural povertyand ensuring household food security. It focuses on productive and gainful agriculture:subsistence agriculture must become profitable smallholder agriculture, and thespotlight must switch from public institutions to farmers and agribusiness

Agricultural Sector Development Program(ASDP)

2002 Provides the government with a sector–wide framework for overseeing the institutional,expenditure and investment development of the agricultural sector. Aims at enablingfarmers to have better access to and use of agricultural knowledge, technologies, andmarket infrastructure all of which contribute to increased productivity, profitability andincome thereby enhancing food security. At district level these interventions areimplemented through District Agricultural Development Plans (DADPs) based on targetcommunities and district development priorities. The ASDP, among others, promotesmore control of resources by beneficiaries, pluralism in service provision, and resourcetransfer based on the evaluation of its efficiency.

Integrated Industrial Development Strategy(IIDS 2025)

?? Provides guidance in the implementation of the Sustainable Industrial DevelopmentPolicy (SIDP) 2020 objectives under the newly prevailing economic environment and torealize the targets stipulated by TDV 2025. Aims to build up internationally competitivebusiness environments and promote enterprises to make the industrial sector an engineof the economic growth. It particularly also promotes agricultural development-ledindustrialization to support successful implementation of Kilimo Kwanza and equitablegrowth of the regions.

Agricultural Marketing Strategy (AMS) ?? Contributes towards attaining TDV 2025, NSGRP, Kilimo Kwanza and the MillenniumDevelopment Goals (MDGs). AMS aims at promoting a competitive, efficient andequitable agricultural marketing system, including supporting the availability ofinternational accredited laboratories and testing equipments for the introduction andmonitoring of appropriate quality standards

Rural Micro, Small and Medium EnterpriseProgram (MUVI)

??? Supports agricultural and agro-industrial development in six target regions, Coast,Tanga, Manyara, Mwanza, Iringa and Ruvuma. One important contribution of MUVI isprovision of information to the rural poor entrepreneurs in value chain coordination

The Southern Agriculture Growth Corridorof Tanzania (SAGCOT)

In process Not yet launched Aims at attracting private investment into agriculture in ways whichare socially and environmentally responsible. Addresses constraints related to uncertainpolicy environment, the development of private and public partnerships and availabilityof affordable and long-term finance. Investments are promoted along trade routeslinking Tanzania to Zambia serving, within Tanzania, the Coast, Morogoro, Iringa,Rukwa and Mbeya regions. Focuses on discrete geographical areas (“clusters”) withinthe corridor where there are opportunities to establish a critical mass of profitable smalland large operators

Source: 3ADI, 2011


5.2.2 SWOT analysis

Strengths Weaknesses

Near organic production suitable for niche markets

Cheap local high quality protein (40-45 per cent)

Oil (23 per cent) in strong demand worldwide

Very suitable as nitrogen fixer for inclusion in cereal

rotations

High in lecithin, calcium, phosphorous and fibre, low

in saturated fats, free of cholesterol

Suitable for “fortifying” traditional staple foods and

for therapeutic foods

Stores well

Almost ideal protein source in animal feeds,

especially poultry

Value chain weakly developed and fragmented

Few producer or processor organizations

Crop relatively unknown in Tanzania

Little “management” by producers

Inadequate road services in remote areas lead to high

transport costs over long distances

Very little research and extension on varieties and

agronomy

Few adapted varieties (only three are authorized for

release in Tanzania) and lack of quality seeds

Opportunities Threats

Organization of segments or of whole value chain

into groups/associations to strengthen powers

(“empowerment”)

Rising internal demand (awareness of health benefits,

individual consumption and population growth)

Young population (promises more consumption in

future)

Adding value to basic product through differentiation

Potential important supplier of quality protein to

human and animal diets

Good potential for rapid growth

Agriculture is national priority - ‘kilimo kwanza’

(agriculture first)

High interest rates and unstable macroeconomic

environment (exchange rates and inflation)

Climate change may affect some aspects of

production

Imports have negative effect on local value added

processing

Inadequacy of crop board (no identifiable benefits to

producers or processor)

Competition from large overseas producers

Lack of government support

5.3 Value Chain Competitiveness Strategy

Strategic elements to improve the ability of the value chain to compete include:

! improving knowledge, skills and information throughout (and before) the chain

(agriculture in schools, producer training, business training);

! promotion and strengthening of groups and associations from primary producers through

to retailers to encourage horizontal and vertical integration and to provide the industry

with a “voice”;

! improving existing and providing new physical infrastructure to support the growth of

profitable agriculture and to generate employment;

! development, equitable deployment and retention of human resources especially in the

research and extension services;

! promotion and adoption of science and technology including research and development

for high quality, palatable and nutritious food;

! strengthening and introduction of investment in infrastructure including for farm and

small and medium enterprise level agroprocessing;

! collection, collation and transparent and widespread dissemination of market information

including volumes of trade and prices;

! promotion of fair and competitive farm gate prices;

! strengthening of the links between farmers and markets and higher up the chain for

domestic, regional and global markets;


! promoting private sector investment and encouragement of public-private partnerships

(although great faith is placed on privatization and private sector investment it is not a

panacea);

! increasing the amount and improving the quality of processed soya products (fortified

foods and soya proteins in animal feeds);

! ensuring that Tanzania’s soya products are produced (and can be verified as having been

produced) to international standards of food and product safety;

! facilitating access to finance and credit including links to capital and short term markets

and introducing insurance for crop failure;

! mitigating and adapting to the effects of climate change (research programmes to improve

existing and develop new technologies);

! promotion of measures to cushion producers from the effects of drought and

strengthening of FEWS NET;

! ensuring that land tenure arrangements for both traditional producers and those wishing

to invest in large scale production are favourable to long term investment; and

! implementing the National Strategy on Agriculture and HIV/AIDS to support increased

production.

5.4 Proposed Strategy Components

The Tanzania soya bean industry has the potential to generate considerable economic output, contribute

to better livelihoods and provide improved nutrition for both people and animals. Several challenges need

to be overcome if this is to be achieved but these are far from insurmountable and the industry is capable

of delivering much of its potential in the medium to long term.

Strategic areas that need to be addressed include:

! sustainable use of land, water and other natural resources;

! public, private and public/private sector investments and financing;

! improvement of the productivity and efficiency of production, marketing and processing;

! rendering more effective the support services including research, extension, training and

dissemination of information;

! general capacity building and empowerment all along the chain;

! chain governance, regulatory and institutional arrangements; and

! cross-cutting and cross-sectoral issues.

Interventions should be designed as an integral part of the country’s participatory processes and fit within

the general framework of the current policies, strategies and programmes for agriculture and rural

development (see Table 12). Further consultations will be needed with a broad range of stakeholders

before any progress can be made.

5.4.1 Sustainable use of land, water and other natural resources

The “conventional wisdom” is that there is ample land in Tanzania to satisfy the needs of the nation for

food production. In the 50 years since independence, however, the human population quadrupled leading

to greatly expanded cultivation of food and cash crops and a proliferation of urban areas. The declaration

of considerable areas as national parks or game reserves has inevitably resulted in a much lower

availability of land for agriculture. Recognition of this situation by Government is evident in enacted

legislation (Land Act No 4 of 1999, Village Land Act No 5 of 1999, Land Use Planning Act No 7 of 2007,

Grazing Land and Animal Feed Resources Act No 13 of 2010). Development and management plans are,

however, required for sustainable resource ownership and use and these are important as they offer

opportunities for investment in infrastructure and improvements in production and productivity.


The challenges that confront the use of land for sustainable production include further development of a

National Land Use Plan which will entail demarcating land for particular use, titling and ownership by

producers, preparation of land management plans and improvement of feeding and water facilities for

livestock, creation of awareness in producers of the current situation, promotion of investment in crop

production.

“Water is life” is a commonly seen banner on roadsides throughout Tanzania. Water determines to a large

extent the level of production that can be achieved. Challenges in water supply include building the

capacity of suppliers and users, harvesting techniques, promoting investment in construction of water

infrastructure and formation of water users’ associations.

5.4.2 Public and private sector investment and financing

Investment, public and private and a combination of both, is required throughout the chain. Public

investment in agriculture has generally been low in relation to the sector’s contribution to the economy

to food security and to human welfare in general. It has also been sporadic and has lacked continuity.

Private investors, with few (and not very encouraging) exceptions, have also been reluctant to invest in

agriculture in spite of ‘kilimo kwanza’ and government incentives for them to do so (Box 10). Financing

for smallholder agriculture and associated operations from the usual sources (banks and other financial

institutions) has not been common in Tanzania. Successful investment needs thorough investigation of

the business before any commitment is made. Capacity needs to be built in the proper preparation of

projects and of investment in infrastructure or in marketing schemes. Tanzania has yet to produce

sufficient of each to provide an exportable surplus. Investigations need to be made in depth and business

plans and investment proposals prepared accordingly.

Box 10: Put your money where your mouth is - incentives available to investors under the

Tanzania Investment Act

Fiscal incentives• Import duty and VAT exemption on project/capital goods• Import Duty Draw Back Scheme

– Refund of duty charged on imported inputs used for producing goods for export

and goods sold to foreign institutions like UN and its agencies operating in

Tanzania

Non-fiscal incentives• Immigration quota of up to 5 people• Guaranteed transfer of

– Net profits or dividends of the investment– Payment in respect of foreign loans– Remittance of proceeds net of all taxes and other obligations– Royalties, fees and other charges– Payment of emolument and other benefits to foreign personnel

Strategic Investor Status• For a big project of over US$ 20 million offering specific/great impact to the society or

economy, Investors can request for special incentives from the Government

Import Duty Draw Back Scheme• Refund of duty charged on imported inputs used for producing goods for export and goods

sold to foreign institutions like UN and its agencies operating in Tanzania

Other Incentives• Export Processing Zones Act 2002• Mining Act 1998• Petroleum Exploration and Production Act 1980• Special Economic Zones Act

Source: Tanzania Investment Centre


5.4.3 Improved efficiency in production, marketing and processing

The production and productivity of soya beans in the country can be improved inter alia by improvement

of the genetic resources (varieties), commercialization of the chain, increased processing capacities and

improvement of marketing efficiency. Soya beans in 2013 are almost exclusively produced for the

domestic market but there is great potential for export.

The challenges facing increased production and productivity include inefficient marketing, poor provision

of technical support services and the inadequacy of producer, processor and retailer organizations.

Currently only two soya bean varieties are certified for use in Tanzania (although varieties are being

cultivated by both small and large scale farmers). There is an urgent need for strategic interventions to

promote and expand the seed trade in the region. In addition to the very limited research on varieties

being undertaken at Uyole ARI, activities in this area should include facilitating investment in local seed

breeding and multiplication by private organizations and promoting investment in appropriate seed storage

methods.

There is a small but vibrant community of small and medium scale entrepreneurs engaged in processing

soya beans for human food and especially for fortification of staples in the diet. This community should

receive training in and assistance for the development of harmonized fortification and food safety

standards and quality control for internal and crossborder issues for manufacturing and supply chains for

Ready to Use Therapeutic Foods (RUTF). Such assistance should be in the form of development finance

and additional training (possibly through an expansion of the current SIDO activities.

5.4.4 Support services (research, extension, training and dissemination of information)

Support services are provided by various institutions including Government, parastatals, NGOs and the

private sector. Agricultural research aims to develop technologies that address the problems affecting the

agricultural industry in order to improve production and productivity and the industry’s contribution to

the national economy and livelihoods. Strategic research interventions for the improvement of crop

production follow a commodity value chain approach but there has been minimal research on soya beans.

The sustainability of research has been a major bottleneck in the development of appropriate technologies

for the improvement of soya beans. Challenges in soya bean research include improving research

infrastructure, improving the skills and competence of human resources, private sector participation and

coordination among research collaborators.

Crop extension services should provide transfer of knowledge and skills to farmers and sharing of

information and experiences amongst stakeholders in order to increase production and productivity.

Extension services are currently mainly (nominally) provided by the public sector although there is

increasing private sector participation in delivery. The main challenges facing extension delivery include

increasing the number of extension staff, improving knowledge and skills among stakeholders, research-

training-extension-farmer linkages, collaboration among service providers and participation of the private

sector in delivery and delivery infrastructure.

5.4.5 Capacity building and empowerment all along the chain

Institutional and financial empowerment of all participants along the value chain comprises including and

involving them in the planning and management of activities. This can be achieved in part through the

formation of and support for groups, associations and networks at local level and at higher levels including

umbrella organizations.


In all models particular attention should be given to ensuring adequate representation of women and of

minority groups. NGOs and FBOs should be one of the vehicles in establishment and continuing support

for the new bodies. Assistance for and training in technical matters should be promoted but in addition

business and accounting skills should be provided for and officers of associations should also receive

assistance in management training, interpersonal skills and human relationships.

Technical and professional staff of the central ministry and devolved services (provincial and district

level) should have their limited skills improved through Continuing Professional Development (CPD).

CPD can be defined in a number of ways but a general definition would be "The systematic maintenance,

improvement and broadening of knowledge and skills and the development of personal qualities necessary

for the execution of professional and technical duties throughout [a person’s] working life”. There are

many ways of contributing to CPD (courses of study, directed reading, attendance at seminars and

workshops) but strong emphasis should be put on electronic media (E-learning) as this format significantly

increases the range and accessibility of topics for CPD study via facilitated access to open and creative

commons-licensed learning materials. Government and other bodies should also be assisted to provide

value chain participants with information (on markets, disease, feed resources) via radio and television

broadcasts.

The existing commercial farming with subcontracting outgrower relationships should be encouraged and

supported and a strategy developed to promote their improvement and expansion. In these relationships,

services such as extension, financing and storage should be provided on an embedded or fee-based system.

The proposed catalyst fund of SAGCOT should be a suitable vehicle for financing as should the

Agricultural window of TIB for provision of soft loans.

5.4.6 Chain governance, regulatory and institutional arrangements

Value chain governance needs to be considerably improved and can be achieved through transparency at

all levels and more direct involvement of the producers, traders and processors. Governance should be

essentially a private sector matter with the public sector providing support through regulatory activities.

The regulatory environment is in need of thorough review and revision and is also in need of being

redesigned to assist the soya bean chain to operate more efficiently. Public institutions involved in the

chain should be supported by provision of adequate funding to perform their activities.

5.4.7 Cross-cutting and cross-sectoral issues

Cross-cutting and cross-sectoral issues include gender, health and trade. The Cereals and Other Produce

Board should be the strategic element in these activities and provide coordination among the various

ministries and other institutions that impinge on the livestock sector.

southern highlands food systems - tzdpg.or.tz · annex 9 some activities of the soya ni pesa...

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