The SOYBeANVAlue ChAiN iN TANzANiA

A report from the Southern Highlands Food Systems Programme

R. Trevor Wilson

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This background paper is made available without further edits to the version presented by its authors. The designations employed and the presentation of material in this information product do not imply the expression of any opinion whatsoever on the part of the Food and Agriculture Organization of the United Nations (FAO) concerning the legal or development status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries. The mention of specific companies or products of manufacturers, whether or not these have been patented, does not imply that these have been endorsed or recommended by FAO in preference to others of a similar nature that are not mentioned. The views expressed in this information product are those of the author(s) and do not necessarily reflect the views or policies of FAO. © FAO, 2015 FAO encourages the use, reproduction and dissemination of material in this information product. Except where otherwise indicated, material may be copied, downloaded and printed for private study, research and teaching purposes, or for use in non-commercial products or services, provided that appropriate acknowledgement of FAO as the source and copyright holder is given and that FAO’s endorsement of users’ views, products or services is not implied in any way. All requests for translation and adaptation rights and for resale and other commercial use rights should be made via www.fao.org/contact-us/licence-request or addressed to copyright@fao.org. FAO information products are available on the FAO website (www.fao.org/publications) and can be purchased through publications-sales@fao.org.

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WHAT PEOPLE 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.” www.soyatech.com “In comparison with 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 fibre, vitamins, minerals and a virtual drugstore of phytochemicals useful for the prevention and treatment of many chronic diseases.” www.soyatech.com “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 soybean underpins environmental destruction and biodiversity.” Donald, 2004

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CONTENT

What People Say .......................................................................................................................... ii Acknowledgements ......................................................................................................................vi Executive Summary ..................................................................................................................... vii Acronyms ..................................................................................................................................... xi Glossary of Kiswahili Words and Phrases .................................................................................... xiii

1. Introduction ............................................................................................................................. 1 1.1 Study Objectives ............................................................................................................................ 1 1.2 Methodology ................................................................................................................................. 1 1.3 Brief Overview of the Value Chain ................................................................................................ 1

2. End Market .............................................................................................................................. 5 2.1 National Market ............................................................................................................................ 5 2.2 Export Markets .............................................................................................................................. 6

3. The Soybean Value Chain .......................................................................................................... 8 3.1 The Value Chain Map .................................................................................................................... 8 3.2 Technology Generation ............................................................................................................... 10 3.3 Input Supply and Demand ........................................................................................................... 11 3.4 Production ................................................................................................................................... 15 3.5 Processing .................................................................................................................................... 22 3.6 Wholesale and Retail Distribution ............................................................................................... 29 3.7 Target Group Considerations ...................................................................................................... 30

4. Systemic Constraints and Upgrading Opportunities ................................................................. 32 4.1 The Business Enabling Environment ........................................................................................... 32 4.2 Related to Vertical and Horizontal Linkages and Value Chain Governance ................................ 39 4.3 Related to Support Services ........................................................................................................ 40

5. Vision and Strategy for Improved Competitiveness and Growth ............................................... 48 5.1 Vision ........................................................................................................................................... 48 5.2 Strategic Issues Synthesis ............................................................................................................ 48 5.3 Value Chain Competitiveness Strategy ....................................................................................... 51 5.4 Proposed Strategy Components .................................................................................................. 52

Annexes ..................................................................................................................................... 56 Annex 1. Stakeholders Met ............................................................................................................... 56 Annex 2. Documents Consulted ........................................................................................................ 62 Annex 3. Timelines — The Rise and Fall of a Minor Protein/Oilseed Crop, 1907-2013 .................... 71 Annex 4. Items Containing Soya or Soya Product Imported into Tanzania ....................................... 75 Annex 5. Partial List of Soya Been Processors and Products in Tanzania ......................................... 96 Annex 6. Poultry Feed Manufacturing Enterprises in Tanzania ........................................................ 99 Annex 7. Some Activities of The Soya Ni Pesa Project In The Roman Catholic Diocese of Njombe 101 Annex 8. International Funding Obtained by Tanfeeds of Morogoro ............................................. 102

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LIST OF TABLES, FIGURES AND BOXES

Tables Table 1: Development conditions and projected demand for soybeans in Tanzania ............................. 5 Table 2: Supply and service participants in the soybean value chain ..................................................... 9 Table 3: Participants and roles in the soybean value chain .................................................................... 9 Table 4: Banks operating and providing loans in the Southern Highlands ........................................... 14 Table 5: Genetic soybean resources in use in Tanzania, 1957-2013 ..................................................... 17 Table 6: Recent soybean production, and potential area and output increases in five Tanzanian regions ................................................................................................................................................... 20 Table 7: Targets for soybean areas planted, outputs, proportions processed and exported, and seed production of soybean, 2010-2020 ....................................................................................................... 20 Table 8: Theoretical gross margin analyses for smallholder soya production in the Southern Highlands ............................................................................................................................................................... 21 Table 9: Theoretical gross margin analyses for participants in the soybean value chain ..................... 29 Table 10: Projected targets with full implementation of TSDS, 2010-2020 .......................................... 37 Table 11: Components and activities of Tanzania Soybean Development Strategy ............................. 48 Table 12: Existing policies, strategies and programmes of relevance to the soybean value chain ...... 49

Figures Figure 1: A well-grown soya crop at Makuta Farm, south of Iringa ........................................................ 2 Figure 2: Soybeans exports from Tanzania, 1961—2011 (FAO 2012) ..................................................... 7 Figure 3: The soybean value chain in Tanzania ..................................................................................... 10 Figure 4: Agro-vet retail outlet in Tunduma selling a range of seeds, fertilizers and crop health products ................................................................................................................................................ 13 Figure 5: Area planted with soybean in Tanzania, 1961-2011 .............................................................. 15 Figure 6: Comparison of world annual average soybean yields and Tanzanian yields ......................... 16 Figure 7: Soybean genetic resources in Tanzania: lines being tested at Uyole Agricultural Research Institute ................................................................................................................................................. 19 Figure 8: Soybean genetic resources in the Ihemi cluster, Tanzania: good nodulation on the Dina variety; and poor germination and slow growth in Squire (possibly caused by poor nodulation) ....... 19 Figure 9: Trends in annual production of soybean in Tanzania, 1961-2011 ......................................... 21 Figure 10: Representative examples of pathways followed by soybeans, from the point of production to final use ............................................................................................................................................. 22 Figure 11: Steps involved in home-processing raw soybeans to produce soya milk, as described by a female smallholder farmer .................................................................................................................... 24 Figure 12: A range of soya products produced and on sale in Dar es Salaam (in the retail outlet of the processor) .............................................................................................................................................. 25 Figure 13: An electric powered expeller of the type that can be used for soybean processing ........... 26 Figure 14: Soya oil (left) and expeller cake (right) processed in Morogoro from local whole soybeans ............................................................................................................................................................... 28 Figure 15: Doing business in Tanzania .................................................................................................. 32 Figure 16: The food safety policy of Power Foods Ltd. Dar es Salaam.................................................. 37 Figure 17: Traffic anarchy at a weighbridge on the Dar es Salaam-Morogoro trunk road ................... 38 Figure 18: Wholesale prices of food crops in Tandala market, Dar es Salaam, June 2012—June 2013 46

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Boxes Box 1: The Southern Agricultural Growth Corridor of Tanzania (SAGCOT) ............................................. 4 Box 2: ‘Let them eat cake!’ — Supplements and concentrate feed manufacture ................................ 14 Box 3: Small is beautiful — an Arusha home-based initiative supplying foods fortified with soya ...... 27 Box 4: Is bigger always better? A medium-scale enterprise in Dar es Salaam producing soya foods .. 28 Box 5: The Sound and the Fury. Over-Regulation and Under-Enforcement in Crop Trade Activities .. 35 Box 6: ‘KILIMO KWANZA’. The Principal Points and the Ten Pillars ...................................................... 35 Box 7: Objectives of the Tanzania Soybean Development Strategy ..................................................... 36 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 .................................................................... 43 Box 10: ‘Put your money where your mouth is’: Incentives available to investors under the Tanzania Investment Act ...................................................................................................................................... 53 All photographs, except otherwise stated, are the copyright of R Trevor Wilson.

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ACKNOWLEDGEMENTS

This study was written by Mr. R. Trevor Wilson (FAO-SHFSP consultant)

Special thanks are owed to Mr. M. Winklmaier (Chief Technical Adviser, FAO Southern Highlands Food Systems Programme), Mr. D. Hitchcock (FAO- Rural Infrastructure and Agro-Industries Division [AGS], Lead Technical Officer, FAO Southern Highlands Food Systems Programme), Mr. D. Neven (Marketing Economist Officer, FAO-AGS) and Mr. M. Hilmi ( Enterprise Development Officer, FAO- AGS) for their detailed technical review of the publication. Thanks are owed to Ms. F. Tartanac (Senior Officer, FAO-AGS) for her technical review and for encouraging the publication of this study.

A thank you also goes to Ms. L. Hoole for editing and proof-reading the study, Ms. L. D’Aquilio

(Publishing Assistant, FAO-AGS) for organizing, coordinating and managing the publication process,

Mr. D. Cossu (FAO-AGS) for supporting the publication process and Mr. S. Morini (FAO-AGS) for design

and layout of the study.

Author’s Acknowledgments My thanks to those participants of the soybean value chain who agreed to meet and talk with me, sharing their views as well as their hopes and fears. Many of these ‘key informants’ are presented in Annex 1. Many documents have been written on the soybean value chain, and this report draws deeply upon them, in particular on the strategic interventions of the Tanzania Soybean Development Strategy. I would like to thank 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. I would also like to thank Diana Templeman (Representative, FAO Tanzania) for her support before and during the study, as well as Joan Kimirei and Peter Jimbuku for their assistance during an extended trip up-country. R. Trevor Wilson, 2013 In fond memory of David Kenneth Hitchcock

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EXECUTIVE SUMMARY

The soybean value chain extends from the primary producer to the final consumer. The consumer may be a man or woman making use of soya and its products to improve his or her diet, or an animal whose diet is being improved by its owner. The majority of producers work within traditional systems, planting only a small area with soya (which they use largely as a diversification crop) and either consuming their produce or selling it for household income. There is currently little large-scale production, although there is interest in using soya to diversify crops and contribute (through nitrogen fixation) to improved soil fertility and structure. Large-scale farmers are also aware of the current and potential demand for soya as a high-quality animal feed protein. Low smallholder soya yields are the result of several factors include the limited areas given over for soya cultivation, poor crop management and the minimal use of fertilizers. Yields are also curtailed (both on small and large-scale farms) by the limited availability of quality seeds and the absence of adapted varieties (only two varieties are officially certified for use in Tanzania). The Southern Highlands are the foci of most soya cultivation. Smallholder production takes places particularly in the area around Songea and Njombe, and large-scale production in the area south of Iringa in the so-called ‘Ihemi Cluster’. There is an increasing demand for soya 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 feeds (especially for poultry). Much of the demand for animal feed is currently met by imports of meal or cake from India and from neighbouring Zambia, Malawi and Uganda. Currently, it is estimated (or rather guessed) that the national production of soya is around 5 000 tonnes a year from about 5 000 hectares (ha) of land. The official Tanzania Soybean Development Strategy (TSDS) projects (unrealistically) that by 2020, the country will be producing 2 million tonnes of soya from 1.4 million hectares of land, with 40 percent being used for processing and 35 percent exported. The potential for greatly increased production and for export is, nonetheless, enormous. Tanzania has natural resources suitable for soybean 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 has a large number of participants operating at several levels. They 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 (e.g. World Food Programme, Save the Children), retailers (supermarkets and small shops) and consumers. To these may be added suppliers of inputs, researchers, extension workers and policy makers. There may be as few as two links between the producer and the plate or up to ten transactions. 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. Almost all product sales take place through individual bargaining in one-on-one situations. Local prices — which fluctuate considerably both within and between years — are known to sellers and buyers, and deals are usually concluded quickly and amiably. Very little use is made of new technology at a smallholder producer level but large-scale producers are generally well mechanized throughout the production cycle and make use of appropriate fertilizers. Technology in small producer enterprises is basic, and packaging, sealing and labelling are mainly carried out

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manually. 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 99th out of 105 countries measured, with two of the six countries below it being contiguous (Burundi, Democratic Republic of Congo) and two being relatively near neighbours (Ethiopia, Chad). According to the World Bank, in 2012 Tanzania ranked 127 out of 183 countries in doing business, with the regional average being 137. Concurrently, the World Economic Forum found Tanzania to be one of 37 ‘factor-driven economies’ and ranked it 120 (down from 113 the previous year) out of 142 countries. It cited 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. These facts do not bode well for encouraging external or internal investment in new or expanding businesses. Tanzania is widely regarded as a country with a heavy regulatory burden, but with regulations 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 sector. In general, however, value chain participants are ignorant of the laws, or choose wilfully to ignore them, and tend to be safe from sanction since the responsible authorities are not in a position (financially or materially) to enforce them. Within the agricultural sector, there is a strategy or policy for each crop and livestock species. The Tanzania Soybean Development Strategy (TSDS) is designed to stimulate soybean production, with the aim of producing 2 million tonnes by 2020. It also aims to increase soybean consumption (from 0.5 kg per person per year to 15 kg per year); to increase local soybean processing into various products; to ensure soybeans play a greater role in reducing poverty and malnutrition, and boosting employment and national GDP; and to increase Tanzania’s competitiveness as a soybean producer and exporter both within Africa and globally. The strategy emphasizes the importance of competitive markets, including commercialization, value added products and sustainable development, and is one of Tanzania’s many initiatives intended to invite and open doors for private sector investment. Weak vertical and horizontal linkages, however, affect the whole soybean chain. Links in the chain (producers, participants, enterprises) do not cooperate or coordinate (indeed the latter seems to be a totally alien concept). The capacity to influence domestic policy is thus limited, as are the more mundane aspects, such as collective access to inputs and other services. In summary both vertical and horizontal integration remain marginal. The soybean value chain may be considered a ‘market-type governance’ with many producers, traders and retailers. Relationships between stakeholders in the value chain are mainly determined by the price at which the product is sold. Coordination is required for the whole chain, and will need to encompass all actors, to generate communication and trust. The Southern Highlands soybean 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, too many small players and small transactions, lack of market coordination, unclear and conflicting roles / mandates in district councils, weak industry associations, and inadequate (or non-enforcement) of operating procedures. To date, research on soybeans has been very limited, extension services are poor and staff are poorly trained and equipped. 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 a further negative effect on the provision of services.

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Soya has many strengths: there is a strong demand for it worldwide, and it has many health benefits. As a human food, soya has been shown to be high in isoflavones (anti-cancer compounds), lecithin, calcium, phosphorous and fibre; low in saturated fats; free of cholesterol; and is a cheap source of high quality protein (40—50 percent) and oil (c. 23 percent). It is therefore suitable as a fortifier of traditional staples as well as a nutritional supplement for certain vulnerable groups. In addition, soya is an almost ideal protein source for animal feed, especially for poultry. At an agricultural level, it is suitable as a nitrogen fixer, improves soil fertility and structure, and provides an excellent ‘break crop’ for cereal rotations. In Tanzania, its near-organic production also makes it suitable for niche markets. Counteracting these strengths are many weaknesses: the soybean value chain is weakly developed and fragmented, there are few producer or processor organizations, the crop is relatively unknown in Tanzania and there is little ‘management’ by producers. The inadequate road services in remote areas also result in high transport costs over long distances. In addition, there has been very little research and extension on varieties and agronomy, there are few adapted varieties (only three are authorized for release in Tanzania) and a lack of quality seeds. Opportunities exist to empower the sector by organizing segments (or indeed the whole) of the value chain into groups or associations. There are other opportunities including a rising internal demand for soybeans as human food (a result of a growing awareness of its health benefits, increased individual consumption and an expanding population). Tanzania’s young population also promises more future consumption. Value can be added to the basic product through differentiation, the crop is a potentially important supplier of quality protein to human and animal diets, and there is good potential for rapid growth since agriculture is a national priority (‘as specified in its ‘kilimo kwanza’ or ‘agriculture first’ initiative). Threats to the development of the soybean sector include high interest rates, an unstable macroeconomic environment (in terms of exchange rates and inflation), climate change challenges, and competition from large overseas producers. Imports may also have a negative effect on local value added processing, and currently 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: Strategic elements to improve the competitive status of the soybean value chain include:

improving knowledge, skills and information throughout (and before) the chain (e.g. by promoting agriculture in schools, producer training, business training);

promoting and strengthening groups and associations (from primary producers through to retailers) in order to encourage vertical and horizontal integration and provide the industry with a ‘voice’;

improving existing — and providing new — physical infrastructure to support the growth of profitable agriculture and generate employment;

developing, deploying and retaining equitable human resources especially in extension services;

promoting and adopting science and technology, including research and development of high-quality, nutritious food;

By 2025, a more efficient and sustainable soybean chain supplying raw materials for the fortification of human food, and a high quality protein for use in animal feeds. The chain will also boost employment, increase incomes, reduce poverty, improve food security and provide a better quality of life for all Tanzanians.

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strengthening and introducing investments in infrastructure, including for farm level agroprocessing and physical market infrastructure;

collecting, collating and disseminating transparent and widespread market information including trade volumes and prices;

promoting fair and competitive farmgate prices;

strengthening links between farmers and markets, as well as (higher up the chain) domestic, regional and global markets;

promoting private sector investment and encouraging 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 welfare, animal health and food safety;

facilitating access to finance and credit (including links to capital and short-term markets) and introducing insurance for livestock;

mitigating and adapting to the effects of climate change (including research programmes to improve existing and develop new technologies);

promoting measures to cushion producers from the effects of drought and strengthen 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 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 efficiency and productivity including, for example, improved access to genetic varieties, marketing and processing (the latter especially for the small-scale processing of fortified human foods);

rendering support services more effective (e.g. in terms of research, extension, training and dissemination of information);

general empowerment and capacity building all along the chain (including linking large farmers to outgrower schemes);

chain governance, regulatory and institutional arrangements; and

cross-cutting and cross-sectoral issues.

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ACRONYMS

AfricaRice Africa Rice Centre (formerly the West Africa Rice Development Association) 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 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 CPD Continuing Professional Development CRDB Cooperative Rural Development Bank CRC Conservation Resource Centre CRS Catholic Relief Services (also sometimes known as Caritas) CAADP Comprehensive African Agriculture Development Programme DRC Democratic Republic of Congo EAC East African Community EAGC Eastern Africa Grains Council EAIRO East African Industrial Research Organization FAO Food and Agriculture Organization of the United Nations FDI Foreign Direct Investment FEWS NET Famine Early Warning Systems Network GAPEX General Agricultural Products Export Company (GAP EX) G/D Grams per day 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 MAFC Ministry of Agriculture, Food Security and Cooperatives MARTI Ministry of Agriculture Research and Training Institute 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 MMA Match Maker Associates MWI Ministry of Water and Irrigation NADO Njombe Agricultural Development Organization NALPIG National Agriculture & Livestock Extension Policy and Implementation Guidelines NARS National Agricultural Research System NBC National Bank of Commerce NBS National Bureau of Statistics NGO Non-Governmental Organization

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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 PASS Private Agricultural Sector Support Programme PHS Plant Health Service PMO—RALG Prime Minister’s Office—Regional Administration and Local Government 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 Southern Africa Development Community SAGCOT Southern Agricultural Growth Corridor of Tanzania SIDO Small Industries Development Organization SHFS Southern Highlands Food Systems SME Small and Medium Enterprises SPS Sanitary and Phytosanitary SUA Sokoine University of Agriculture TAFMA Tanzania Animal Feed Manufacturing Association TAP Tanzania Agriculture Partnership TASTA Tanzania Seed Traders Association TBS Tanzania Bureau of Standards TDV Tanzania Development Vision 2025 TFDA Tanzania Food and Drugs Authority TIC Tanzania Investment Centre 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 URT United Republic of Tanzania 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

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GLOSSARY OF KISWAHILI WORDS AND PHRASES

Dagaa Sun-dried small fish, primarily from Lake Victoria. It is a much- valued human food, and also used as a major protein source in animal feeds. (‘Dagaa’ is 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’ Tuboreshe Chakula Let’s improve food, let’s make food better Ugali Thick maize porridge Uji Thin maize ‘gruel’

Currency exchange rates US$ 1.00 = c. 1 600 Tanzania Shillings (TSh) in September 2013

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1. INTRODUCTION

1.1 Study Objectives

The major objectives of this study were to:

identify strengths and bottlenecks in production, processing, marketing and the institutional environment of the Tanzania soybean industry, and establish links between performance drivers along the value chain in terms of efficiency and competitiveness;

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 improved organization and performance of the soybean chain with a view to increasing efficiency and competitiveness; and

prepare a publishable report on the ‘Tanzanian Soybean Value Chain Analysis’.

1.2 Methodology

In brief the methodology of the study comprised:

a thorough review of the literature and a study of secondary data covering, inter alia, trends in production, consumption, trade, yields, prices, concentration of production, capacity utilization and description of the linkages within the soybean 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 2 show the wealth of data on the soybean food chain. Much of it, however, predates the mid-1980s and much of it is qualitative. There is such disparity between 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

Why soya? The soybean — Glycine max (L.) Merr — is a legume native to East Asia1. It is classed as an oilseed (not a pulse) by FAO. Soya may grow from 0.2 to 2 m (see Figure 1). Its pods, stems and leaves are covered with fine hair. The leaves fall before the seeds mature. The seeds are very variable in size and colour. There are many reasons for increasing the area of soya cultivation. As a human food, soya has been shown to be high in flavones (anti-cancer compounds), lecithin, calcium, phosphorous and fibre; low in saturated fats; free of cholesterol; and are a cheap source of high-quality protein (40—50 percent) and oil (c. 23 percent). It is therefore suitable to fortify traditional staples and as a nutritional supplement for certain vulnerable groups. Soya is also an almost ideal protein source for animal feeds, especially poultry. On an agricultural level, it is suitable as a nitrogen fixer, improves soil fertility and structure, and provides an excellent ‘break crop’ for cereal rotations. In Tanzania, its near-organic production makes it suitable for niche markets.

1 Neonotonia wightii (Am.) Lackey (formerly Glycine javanica L.), known as ‘fundofundo’ in parts of Tanzania, is a native

herbaceous perennial, with a strong taproot, and trailing, climbing and twining stems. It is a constituent of high-value animal feed in many drier areas.

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Other benefits of soya include its high commercial value; the current and expanding role of soya as an ingredient in commercial livestock feed; the increasing number of small and large-scale farmers growing or wanting to grow soya; and the rapidly increasing long-term national and global demand. In addition, it has fewer pests and diseases than other legumes; the grain resists ingress of water and stores well at low moisture contents; there are suitable soils and climate for its cultivation in many parts of the country and especially in the Southern Highlands; and much international support for research into improved soybean varieties and agronomy. This combination of factors endows soya with the capacity for rapid and widespread production expansion. Figure 1: A well-grown soya crop at Makuta Farm, south of Iringa

The value chain Soybean is, and always has been, a minor crop in Tanzania. It contributes, nonetheless, to national and household food supplies and incomes, adds diversity to arable production systems, and (as a legume) fixes nitrogen thereby improving soil fertility and structure. Much of Tanzania is suitable for soybean cultivation and it is indeed grown in most areas. Particularly favoured areas are the Southern Highlands (Iringa, Mbeya, Rukwa and Ruvuma Regions), Morogoro Region, the southern regions of Lindi and Mtwara, and the northern regions of Arusha, Kilimanjaro and Manyara. 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 grown using traditional husbandry methods. Some larger mechanized farms in the Ihemi Cluster of the Southern Agricultural Growth Corridor of Tanzania (SAGCOT — see Box 1) already grow — or have well-advanced plans to grow — soybean: these are, or will be, partially integrated operations with some degree of processing, and organized marketing. Soybean contributes little to agricultural Gross Domestic Product (GDP) at present but has great potential to contribute much more. Annual production of grain soya in the early twenty-first century has been in the range of 3 000—5 000 tonnes from a cultivated area of 5 000—6 000 hectares. Currently soybean is produced 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 also some ‘informal’ imports from Tanzania’s contiguous states.

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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 much commercial livestock feed particularly for monogastrics. For most applications, some form of processing is required before it can be used. In Tanzania, soya is not a traditional food, and the transformation technology is not yet known. Smallholders would be more likely to adopt soybean as a crop if it were already integrated into local diets; the dissemination of processing and cooking methods is required to achieve this. There are many actual or potential markets for Tanzanian soya, stretching from the household level, through small/medium-scale food processors and small to large-scale animal feed processors, to the future possibility of exports. Small farmers currently dominate local production, do not benefit from economies of scale and often need to make ‘emergency’ sales to meet pressing 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. At present, processors continue to use low-cost local fishmeal (‘dagaa’) as the main source of protein in animal feed. The associated human health risks (as a result of contamination with Salmonella) as well as the ‘fishy taste’ this imparts to poultry meat are widely accepted. ‘Dagaa’ is a lower quality protein than soybean 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 increase domestic soybean 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 who use them to fortify local foods but demand for home consumption is extremely limited. Some small/medium-scale producers of 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) and this inhibits their potential function as production drivers. Processor problems are exacerbated by others challenges that have a negative impact on efficiency and profitability. These include poor product quality, inappropriate buildings, unqualified labour, old machinery, excessive utility costs (coupled with unreliability supplies) and limited operating capital. Since Independence, the Government has instigated only limited research on soybeans. However, Uyole Agricultural Research Institute (properly known as the Southern Highlands’ Zone Agricultural Research and Development Institute) still carries out research (see below). 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, which are even more constrained for funds) has been a brake to expanding soya production. Some seeds, fertilizers and crop health inputs are available at the many small private outlets scattered across the highlands (and indeed across the country) but they are not specifically for soybeans. There are many opportunities for enhancing the soybean value chain. There is increasing interest in the crop not only from the Government of Tanzania but also from the private sector, international development agencies and Non-Governmental Organizations (NGOs). Models need to be developed that can be applied and multiplicated throughout the Southern Highlands. It could yield huge dividends to promote and build the technical and financial capacity of existing civil society

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organizations, for example producer, trader and processor organizations such as the Njombe Agricultural Development Organization (NADO), Rural and Urban Development Initiatives (RUDI) and the single-crop Kilombero High Quality Rice Growers Organization (AKIRIGO). The creation of new organizations could also yield dividends, not least by serving as models for soybean production, marketing, processing and use.

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, private-sector companies and 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 World Economic Forum in Davos in 2011. SAGCOT’s mandate is to mobilize private sector investment. Its main objective is to foster inclusive, commercially-successful agribusinesses, which will benefit the region’s small-scale farmers. In so doing, the initiative 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 road and rail infrastructure ‘spine’— running from the port of Dar es Salaam through Morogoro, Iringa and Mbeya to the Democratic Republic of Congo, Malawi and Zambia — and to target areas of high agricultural potential (‘the clusters’). In this way a focussed, efficient, critical mass of commercial agribusinesses (from emergent to large scale) 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 work;

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 opened for business in October 2011. Its initial focus is the cluster around 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 organization), 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 soybeans followed by (Irish) potatoes. Expansion of soybean cultivation is one of the major opportunities for the Southern Agricultural Growth Corridor, and offers the potential to reduce imports as well as earn foreign exchange through exports to regional and global markets.

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2. END MARKET

2.1 National market

Traditional small-scale farmers grow more than 99 percent of Tanzania’s soybean crop; producers generally use few inputs and produce low unit yields. Demand for soya and soya products is projected to increase in the medium- to long-term (see Table 1) as a result of rising incomes, urbanization, the adoption of more ‘western’ lifestyles and increasing need for animal feed. Total soya use is predicted to increase from 0.5 kg per person in 2010 to 15 kg in 2020. Table 1: Development conditions and projected demand for soybeans in Tanzania

Market segment

Conditions and market potential for time horizons

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

Development conditions

Potential (t/year)

Development conditions

Potential (t/year)

Development conditions

Potential (t/year)

Fortified food

Corn-soy blend for WFP and others

5 000

25 grams/day for half of food deficient population (the latter currently estimated at 43% of total population or 22 million

100 620 25 grams/day for half of food deficient population

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 8 000 to 20 000 t/year

Increase extrusion capacity to 150 000 t/year

Full-fat expeller soya TSh 900/kg, defatted TSh 800/kg

Full-fat 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 MMA, 2010

National demand for food, in parallel with production, is dominated by the mass of poorer rural 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 discerning in its buying habits and demand better quality food, 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. A small processing industry already exists (owned entirely by the private sector) to cater for the existing demand, but the range of products (like the production capacity) is generally small. Some manufacturers specialize in supplying a super niche 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 Tanzanian soya are those supermarkets and elite retail shops that stock branded and packaged products on their

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shelves. Possible niche markets include organic and health food products as well as products of defined geographical origin (the latter should be distinguished by an institution, a company or even a village). The first step towards developing geographic brand differentiation involves securing and activating intellectual property rights for distinctive varieties of food products. Some value-enhancing activities are also required, including those which create and share intangible assets in the form of geographical indicators. A geographical indicator (in this context) is similar to a trademark and can be used to certify that a product possesses specific qualities or enjoys a certain reputation arising from its geographical origin. If 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 animal feed, with current demand 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. The price of ‘dagaa’ has also increased which makes soya meal a safer alternative, and at a (possibly) lower cost. Dried fish is also likely to be contaminated by salmonella bacteria, which can cause food poisoning in humans. Thus soya meal is a preferred source of protein (as well as having several other nutritional advantages, as discussed elsewhere in this report). As local production is insufficient to meet the demand of the animal-feed sector, Tanzanian manufacturers currently import protein by sea from India and by road from Zambia. Increased globalization and the influence of information technology mean that more and more local consumers have access to information on health and food safety issues. It is thus important that livestock feed industries are aware of — and respond to — this trend. In order to guarantee demand, they need to produce feed containing the desired raw ingredients and ensure that their final products conform to acceptable standards. If the Tanzania livestock industry is to improve its access to markets and achieve international recognition, the use of acceptable feed is one of the critical attributes that will ensure consumer confidence.

2.2 Export Markets

The soybean and its meal derivative are among the most important agriculturally traded products in the world. Since Tanzanian Independence, world production of soybeans has risen almost 10-fold, increasing from 26.9 million tonnes in 1961 to 253.1 million tonnes in 2012. The harvested area has, however, increased less than 5-fold, from 23.8 million hectares to 106.6 million hectares (FAO 2012). In 2010, global soybean exports (83.4 million tonnes) were valued at US$ 39.7 billion (or the equivalent of US$ 425/tonne) thus occupying the second place (in terms of value) in world trade. In addition to whole soybeans, 64.5 million tonnes of soya cake — valued at US$ 22.7 billion or US$ 353/tonne — was exported, with this product occupying eighth place in terms of value in world trade (FAO 2012). The United States of America, Brazil, Argentina and China were by far the largest producers of soya in 2012; the first three were also the largest exporters. China was by far the largest importer of soya and soya products, followed by Japan, the Netherlands, Germany and Mexico. Current global demand for soybeans is driven by the need for protein meals for the dairy and meat industries. World prices are mainly influenced by prices in Argentina, Brazil and Rotterdam. The world price increased by 48 percent in 2007/2008 as a result of a stagnant supply and a heavy global demand; in the medium-term this trend is expected to continue because of shrinking carryover stocks. Expansion of soya cultivation areas in South America, along with 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 soybeans either for comparative breeding trials in other countries or as an item of commerce (Figure 2). In the 1960s most of Tanzania’s soya crop — the majority of which came from the farms of the

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Overseas Food Corporation or 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. The Southern Africa Development Community (SADC) is the main potential market for Tanzanian soya exports. However, different countries have different needs. 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 percent) of which US$ 51 000 was for soya flour and meal and US$ 43 000 was 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. However, the potential to expand further into existing markets — as well as to penetrate new markets — is enormous, and will be fundamental to the long-term future of soya in Tanzania. Figure 2: Soybeans exports from Tanzania, 1961—2011 (FAO 2012)

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3. THE SOYBEAN VALUE CHAIN

The value chain describes the range of activities required to move a commodity from the first point of production to the last point of consumption. The chain usually involves (an often complex) combination of physical changes, inputs from various producer services, transfers of ownership and deliveries. Commodity value chains are increasingly recognized as providing a solid framework for the analysis of the public and private sector stakeholders within them, as well as the overall performance of particular markets. The soybean value chain is confounded by many technical and institutional impediments (from supply and use of inputs, via production and processing to marketing and retailing). The chain is fragmented, uncoordinated, disorganised and uncontrolled (in spite of being over-regulated). It is not known exactly how many smallholders are producing soya, but few households appear to be involved in primary production. A few large farms grow soybeans on a regular basis and this type of production is likely to expand in future. Brokers or traders operate across most links of the chain. Some processing is done at a household level, and a growing number of small- and large-scale commercial processors produce human and animal food with soya as an ingredient. Human food containing soya or soybean meal is sold in some supermarkets and smaller retail outlets. Soya in animal feeds is used by the manufacturer or retailed to individual livestock farmers (mainly those working in the poultry layer or broiler segment). The horizontal and vertical linkages of the value chain are generally weak and uncompetitive, and need support to strengthen. The soybean value chain includes whole beans and soybean meal. Both items are produced, mainly for the domestic market (see Figure 2 for long-term exports). Imports are almost all of soybean meal for the livestock feed industry (as well as some small amounts of oil for cooking). All processed products have undergone some form of treatment to extract the protein or oil from the beans. Soybean meal is the material that remains after solvent extraction, or after mechanical expelling of oil from the bean: it has a protein content of about 50 percent. 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, retailers and consumers. Most participants are rather specialized and their functions usually only connect to one (or just a few) links in the value chain.

3.1 The Value Chain Map

The soybean value chain map (Figure 3) shows that the whole is suspended from the consumer. If the link to the rest of the chain is broken, the whole is 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 the product increases at each stage until it reaches the consumer. Although it is possible to provide a succinct list of most of the participants in the chain (see Table 2), pivotal roles are played by the middle links of the chain through which all products must pass. Many participants in the chain (see Table 3) occupy more than one role. Further up the chain, some processors are also wholesalers and retailers, operating in both the domestic and export markets. Primary producers may sell beans in three key ways: directly through a market, to a trader, or to a processor (they may also use a combination of all three outlets). A trader may similarly sell to another trader, or directly to a wholesaler, retailer or processor (or again, may broaden his options by using a combination of all channels). Processors, especially the smaller

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enterprises, may buy beans directly from farmers or from traders, and sell the products to wholesalers or retailers. Every link in the value chain relies on goods and services in order to fulfil its role(s). At the various stages, goods and services include: land, labour, soybeans 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. Table 2: Supply and service participants in the soybean value chain

Core actors Service suppliers

Producers (smallholder farmers, farmers’ 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

Transport

Financial services

Associations (producer, trader, processor)

Cereal and mixed crops board products)

Table 3: Participants and roles in the soybean value chain

Participants Roles

Producers Traditional smallholders grow most of the country’s soybeans. Producers are primarily located in the Southern Highlands, with another groups farming around Babati (Manyara Region). They use little technology. Some small-scale farmers have received support from NGOs to access technology and form groups. Large-scale growers are concentrated in the so-called ‘lhemi Cluster’ of SAGCOT around Mafinga. Some already have ‘outgrowers’; 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 is grown. Trading usually takes place at the point of production. The majority of traders have close links with processors.

Processors Some large-scale (and numerous small- and medium-scale processors) operate in the country. They are mainly based in Dar es Salaam and Arusha, with limited presence elsewhere. Processing helps turn soya into human food, especially fortifiers. Numerous small private retailers also sell small quantities of feed, feed additives and supplements for animals (as many as 500 have trading licenses). The main products are Chick Starter (and a more expensive version containing a coccidiostat), Layers, Broiler Starter, Broiler Growers and Broiler Finisher, in 2013, all the animal feed products containing soya were is in the form of mash, although some firms have pelleting capacity. There is no regular production of pig compound feeds. Many small producers buy ingredients and mix their own concentrate feed.

Wholesalers Most processors act as their own wholesalers; there is a limited number of independent specialist dealers.

Retailers Processors often act as their own retailers. Supermarkets are the main retail outlets, although soya fortified food products are also occasionally on sale in small urban and rural shops. Soybeans are usually sold through recognized but informal businesses.

Input suppliers

Smallholders make little use of modern inputs. Seeds are available in very limited quantities through Uyole Agricultural Research Institute, the Agricultural Seeds Agency (ASA) and other suppliers. Fertilizer and crop health products are available at agro-dealer shops. The Ministry of Agriculture, Food Security and Cooperatives (MAFC) and the municipalities provide limited extension services. Financial services are extremely limited and available only to a few.

Research Public sector research on soya is very limited. Uyole Agricultural Research Institute Mbeya has a single researcher working on soya. It also has responsibilities in training and extension. Some large farmers undertake their own ‘research’, mainly in the form of variety observation plots: one farmer is collaborating with the CIAT in this kind of trial.

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Figure 3: The soybean value chain in Tanzania

3.2 Technology generation

Technology in soybean production includes various inputs such as improved seeds, fertilizers, crop health products (weed killers and pest control items), machinery, and packaging. Technology has a critical role in improving competitiveness, and especially vis-à-vis Tanzania’s near neighbours, which are operating in — and competing for — the same market.

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Soybeans are grown in the Southern Highlands in two key ways. The more common way makes use of traditional systems and very little modern technology; the crop is grown on small individual areas ranging from a few hundred metres square to more than one hectare. The less common way (at least for the present) is a large-scale ‘modern’ system that uses areas of up to 100 hectares, operates with modern machinery and provides a range of inputs. Several technological interventions are available that would be suitable for smallholders, but for the most part they are not used by producers and probably not even communicated to them by technical staff. Some are perhaps too sophisticated or too expensive for use at the present state of soybean cultivation development. The 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 soybean producers. The Uyole Agricultural Research Institute has the mandate for applied research for the Southern Highlands. It is committed to researching and facilitating the adoption of appropriate technologies in the region. Its impact is limited, however, because of low staffing levels and limited budgets. The official extension services suffer from similar problems. The adoption of known, improved — yet not overly ambitious — management and technological practices can bring about spectacular increases in the output and quality of soybeans and their derived products. Such interventions include:

using the seeds of high-yielding varieties (these are rare in Tanzania);

inoculating 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;

using the correct fertilizers for legume crops;

applying crop health products when indicated (e.g. against arthropods, fungi, viruses and bacteria); and

storing under suitable conditions for temperature and vermin control. The failure to take advantage of available, effective, cheap and simple technologies will inevitably result in an even greater loss of competitiveness, since Tanzania’s crop-producing and processing peers in neighbouring countries, especially in Kenya, Uganda and Zambia, are making widespread use of them.

3.3 Input supply and demand

The most important inputs for soybean production are perceived to be:

seeds;

fertilizers and crop health products;

fixed (and mobile) equipment and tools;

credit. The limited access to inputs (including credit) and the poor dissemination and uptake of management knowledge are recognized as key constraints to development in 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 farming sector is characterized by extremely limited use of modern inputs. Fertilizer use declined after the phasing out of subsidies in 1991—1994 but has increased again since the return of limited subsidies. Only 32.1 percent of farmers used fertilizer in 2010/2011, and much

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of this was organic (i.e. farmyard manure). The regions with the highest fertilizer use were Ruvuma and Mbeya. It must be noted, however, that the regions of the Southern Highlands (Ruvuma, Mbeya and Iringa) have been the major focus of the National Agricultural Input Voucher Scheme: 51 percent of farmers there use chemical fertilizers, with 65.3 percent of those using a voucher to purchase their 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 increasing fertilizer use all the more compelling. The use of insecticides and fungicides decreased between 2002/2003 and 2007/2008 (from 17 to 14 percent). The percentage of farmers purchasing seeds also dropped between 2008/2009 and 2010/2011 (from 35 to 28 percent). The majority of purchased seeds are local varieties (which have the merit of maintaining and even enhancing the diversity of the genetic pool), with very few farmers buying improved certified seeds or improved quality declared seeds. Given the status of soya research in the country, the top quality seeds for this crop are probably lower than for most other crops. The low level of mechanization among smallholders is both a cause and symptom of rural poverty. Given the generally abundant availability of land, a household’s capacity to maintain and increase its production on a larger piece of land depends on how much labour it can hire, its use of labour-saving techniques (animal traction, tractors etc.), minimum cultivation, and the existence (and proper functioning) of a market for land. A major limitation of farmers’ productivity (inputs versus yield) is a heavy reliance on hand hoes — over 95 percent 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: most farmers do not own an ox, though around 18 percent can afford to rent an ox plough and 18 percent hire an ox seed planter. The use of mechanized traction and harvesting machinery is less than 10 percent for the former and virtually nil for the latter. Only 14 608 households (0.3 percent) use power tillers (‘kubota’ in local parlance) and these are mainly for rice. The majority of farmers operate on a purely subsistence level, and only one third sell any part of their produce (mainly maize and paddy). Post-harvest storage is used to gain a better price out of season. Some 67 percent of farmers store their crops in sacks or open drums, 17 percent use older more traditional storage methods, and only 6 percent store using a method that reduces post-harvest losses (e.g. using improved local structures, purpose-built structures and airtight drums). 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 percent of farmers said they had received credit to buy inputs such as improved seeds, fertilizers or fungicides. Access to extension services is not quite so limited as access to credit yet it is still 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 provision is clearly inadequate. Private extension services are beginning to be offered 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 common (Figure 4). There are only a few distribution centres in rural areas, especially in remoter locations, and producers are therefore forced to travel long distances to towns to purchase their inputs. Producers can obtain some inputs at rural markets (and other informal distribution points) but they risk buying products that are counterfeit or have been diluted since there is little quality control. An imbalance in the availability of inputs — both physically and intellectually — is a fundamental problem for the chain.

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

Processors of fortified foods (both human and animal) are mostly small operators and face problems obtaining the basic material — the whole soybean. Most buy their beans from the Southern Highlands or the Babati area but the supply is erratic, the quality inconsistent and the transport costs high. Feed manufacturers (especially the larger ones) need greater amounts of soybeans. Soybean meal is increasingly being used as a protein to replace fishmeal. However, the local product is not preferred: a better, more consistent quality product (which is also de-fatted) can be obtained more cheaply from India. The Tanzania Animal Feed Manufacturing Association (TAFMA) represents animal feed manufacturers. Several maize and wheat flour millers produce animal feed 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 of their operation (wheat or maize bran) to produce a high-value product. Specialized firms, on the other hand, have to obtain their ingredients from a variety of different places: maize and wheat bran from internal resources; sunflower cake from the local oil milling industry (limited amounts of cotton seed cake are also used); fishmeal (made from pounded ‘dagaa’) mainly from Lake Victoria. Compound feeds are more widely available in 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. Obtaining credit (for capital and recurrent expenditure) is a major problem for processors and producers. The National Microfinance Bank (NMB) and the Cooperative Rural Development Bank (CRDB) are the largest providers of credit to agriculture in Tanzania. They have branches in most districts of the Southern Highlands. NMB has a range of products including loans for farmer groups and SME loans for processors, but collateral requirements are strict. Interest rates are based on Treasury Bills plus 1 or 2 percent, and range from 19 percent for Small and Medium Enterprises (SME) to 24 percent for microenterprises. Both banks provide funds to Savings and Credit Cooperative Societies (SACCOS) and Microfinance Institutions (MFI). Several other banks, including the Tanzania Postal Bank (TPB), the National Bank of Commerce (NBC) and Exim Bank Tanzania (EBT) operate in the Southern Highlands (see Table 4) and could be sources of credit for farmers in the future. The Government is in the process of establishing an Agricultural Bank as proposed in the ‘Kilimo Kwanza’ (Agriculture First) initiative2 and has made a start with the Agriculture Window Unit

2 ‘Kilimo Kwanza’ aims to utilize the private sector to develop agriculture.

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in the Tanzania Investment Bank. The fact remains, however, that at present agricultural production is mainly financed by smallholder farmers themselves (though there is some external investment in activities that add value such as the manufacture of foods and feeds). Table 4: Banks operating and providing loans in the Southern Highlands

Item Bank

NMB CRDB TPB NBC EBT

Loan amounts (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

Offer a whole range of financial products to individual clients: these include savings, loans, money transfers, payment services etc. Wholesale loans are extended to SACCOSs and MFIs.

Profile of clients NMB, NBC, EBT and CRDB are primarily indirect providers to rural areas through their links with MFIs and SACCOSs. TPB has a greater tendency to provide direct services to individual rural clients.

Portfolio characteristics

CRDB loans to rural agriculture comprise about 25 percent of its total lending. NMB has extended significant lending in agriculture whereas TPB, NBC and EBT continue to lend to individual farmers as demand arises.

Financing sources and capital structure

SACCOS and other MFIs are able to generate funds from banks, NGOs and their own members.

Source: Small Industries Development Organization (SIDO), 200 Box 2: ‘Let them eat cake!’ — Supplements and concentrate feed manufacture Poultry feed production increased from 490 000 tonnes in 2001/2002 to 574 90 tonnes in 2006/2007. There is thus a strong and growing demand for concentrate feeds and supplements for 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 which has a different formulation and is 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 millers (from the village to the large-scale) produce ‘home mix’ feed. Some large millers have automated 20- tonne batch mixers (with computer controlled mix proportions) that are capable of producing meal as well as pellets (though the latter does not yet happen). The main ingredient in Tanzanian stock feeds is maize bran (usually about 70 percent of the mix) followed by sunflower cake, fishmeal (powdered ‘dagaa’), locally grown whole ground soybeans, meat and bone meal, salt, lime and superlick. There are legal requirements to declare the ingredients and to display the proximate composition of the mix on the packaging but these are not enforced. Larger firms usually have analyses done by commercial laboratories (usually the Tanzania Bureau of Standards, Tanzania Industrial Research Development Organization or Sokoine University). There is some interest in increasing the social contribution of feed firms. International Tanfeeds Ltd is a shareholding company based in Morogoro that purchases cereals, cereal by-products and other feed ingredients from farmers and processes them into animal feed. The company was formed in 2008 but has been producing feed since 2005.Tanfeeds aims to develop a value chain starting with smallholder crop farmers, moving through rural and urban livestock keepers and finally reaching consumers of livestock products. The mission of the company is to produce high-quality animal feed in order to promote efficient livestock production; it envisages adding value to crops and turning by-products into high quality animal feed. Maximizing local feed resources is a key to providing a sustainable market for smallholder farmers. The vision is to become a leading animal feed producer based on efficient use of locally produced resources. The management includes specialists in animal production, nutrition and health and 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

3 Tanfeeds has been successful in obtaining large amounts funding (both grants and loans) from two international sources:

see Annex 10.

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3.4 Production

Overview Soybean production in Tanzania is overwhelmingly the domain of small-scale traditional producers, and it is commonly estimated that up to 99 percent of soybeans derive from the traditional sector. This situation may well change in the future since increasing interest is being shown by large-scale farmers, especially in the Ihemi Cluster of SAGCOT (south of Iringa) but also in the Arusha and Kilimanjaro Regions.

Area planted and unit area yields There are no reliable long-term data on soya yields and cultivation areas in Tanzania. Different sources provide different — often wildly different — ‘estimates’. Ad hoc sources of direct information do not provide a whole view, but do tell us something. For example, in the early 1960s, the Overseas Food Corporation (OFC) was cultivating 6 000 hectares of soya on its Nachingwea farms. The National Grain Legume Research Programme, which became operational in 1974, grew 750 hectares of soya on parastatal and prison farms around Nachingwea in the same year and had plans to expand cultivation to 8 000 hectares. The longest time series indicates that in the 50-year period between 1961 and 2011 cultivation remained in the range of 4 000 and 6 000 hectares. A larger area was planted in the early 1960s (when the Tanganyika Agricultural Corporation — successor to OFC — was active in Nachingwea), followed by smaller areas in the late 1960s and early 1970s (see Figure 5). The decline in planted areas 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 with soybean in Tanzania, 1961-2011

Source: FAO 2012

Long-term average yields in Tanzania are said to be around 1.5 tonnes/ha but this may be optimistic. Some research papers report much higher yields; other sources much lower yields. In Hai district in 1999, demonstration plots (of several varieties) were yielding in the range of 588 kg/ha to 2 333 kg/ha. Large-scale farmers between Mafinga and Iringa in the Southern Highlands obtain yields of 3 tonnes/ha. Tanzanian yields appear to be much lower than those obtained in other parts of the world (see Figure 6), and there is no doubt that considerably higher yields can be obtained with

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appropriate inputs and husbandry: up to 4 tonnes/ha should be possible under dryland conditions and with good management. The major factors that have influenced the production of oilseeds (including soybean) in Tanzania are poor producer prices and the collapse of domestic and export marketing systems. Figure 6: Comparison of world annual average soybean yields and Tanzanian yields

Genetic resources It is said that soybeans were first introduced into 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 beans were introduced from the United States of America in 1909 and that there were further introductions from Japan, China and South Africa in 1911 (see Annex 3)4. The later events are referred to in 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 introductions into German East Africa. Another unsubstantiated statement claims that there were soybeans 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. These came as direct imports (from India, South Africa and the USA) and as American and Far Eastern cultivars arriving from Rwanda. Soybeans were grown in the Bukoba area during the Second World War and, depending on the source you read, either did well or did badly.

4 Between 1961 and 1965, the OFC grew about 6 000 hectares of soya on its 18 farms around Nachingwea. The author of

this report was responsible for two farms in this period and grew about 1 000 hectares of soya.

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Table 5: Genetic soybean resources in use in Tanzania, 1957-2013

Time period Location Varieties

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

1938-1939 Amani 64 cultivars: either directly imported (from USA, India and South Africa) or coming from the US and the Far East via Rwanda

1950 Nachingwea The Hernon 237 introduced from Rhodesia to replace the Dixie variety (which presumably came from the US in the imports of 1938)

1957-1963 Nachingwea New adapted varieties for lowland conditions included IH/192 (‘Tanzania’s standard line’), 3H/1, 3H/101, 7H/149/1. The Hernon 237 x Light Speckled, Hernon 237 x R184 and Benares x Light Speckled produced the highest-yielding and most agronomically desirable strains: over 5—year period the Hernon Light Speckled 219 out-yielded its 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 distributed to research organizations for testing

2002-2003 Uyole Uyole Soya 1 (SH1), Uyole Soya 2 (SH 2)

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

The OFC (‘Groundnut Scheme’) — presumably accepting that it would get little oil from its eponymous crop — started soybean cultivation in 1956 and employed a breeder to improve the country’s contemporary gene pool. Hernon 237 was introduced to replace the Dixie variety (which probably came from the USA import of 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, researchers in Senegal were testing 23 Tanzanian soya varieties for local conditions, and later released some of these to other West African countries. Ten 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; this was not, however, pursued in the longer term. Since the 1970s, public research on soybean has been spasmodic and inconsistent5. The Agricultural Research Institute (ARI) at Naliendele in Mtwara Region was made the coordinating centre for the Oilseeds Research Programme (ORP) in 1978 but its main focus is sesame and groundnuts. Varietal research has also been undertaken at Ilonga on at least two discrete occasions (between 1960 and 1969, and from 1973 onwards); in the Kilombero Agricultural Research and Training Institute in Morogoro Region (between 1968 and 1976); at Lyamungu ARI in Kilimanjaro Region (from 1978); and at Selian ARI (and the nearby Lambo estate) in Arusha Region (from 1986). The second breeding programme (Ilonga second phase and Lyamungu) aimed to obtain new varieties that displayed a:

high yield;

high protein and oil content;

resistance to lodging and shattering;

5 Fuller details of the research system are to be found in Section 4.3.5 (‘Research Services’).

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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 twenty-first century the International Vegetable Research Centre (AVRDC) provided seeds from 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 soybean 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). However, the human, material and financial resources allocated to the programme are meagre (for example, there is only one researcher). Informal and 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 through unofficial cross-border transactions from Zambia by smallholder farmers acting on their own initiative. Safari, developed by the Seed Company Limited in Zimbabwe, is an indeterminate variety with high seed yield potential, which is well adapted to altitudes over 900 metres, is resistant to lodging, has a long period that is shatter free, can be harvested with little loss of yield and has good ground clearance of the bottom pods. Seeds are of a medium size with a yellow hilum and are of good quality. Safari is generally resistant to (or tolerant of) most soybean pathogens but its high susceptibility to ‘Soybean Rust’ — caused by the fungus Phakopsora pachyrhizi — means it may require two or even three fungicidal sprayings during the growing period. Large-scale farmers in the Ihemi Cluster are undertaking some observational trails with varieties developed in western Kenya (and provided by CIAT through the N2Africa Programme)6. Soya needs to be inoculated, naturally or artificially, with Rhizobium bacterium for maximum productivity. Some varieties — notably Tanzania’s long-season ‘Songea’ — ‘promiscuously’ make use of the Rhizobium of other local legumes. (‘Songea’ was possibly the variety that was found to be promiscuous in international trials in the 1970s.) Most varieties, however, are more particular of their inoculants and the search for variety-specific rhizobia has long been a refrain in soya variety breeding in Tanzania. Good nodulation usually leads to strong growth and higher yields whereas lack of nodulation is a major factor in poor germination and poor growth (Figure 8). The soybean is reputedly resistant to many of the common pests and diseases that attack legumes, and this is especially so of the beans grown in Tanzania. As has been previously mentioned, the exception to this is a vulnerability to a fungal disease — commonly called ‘Soybean Rust’ — which can reduce yields by up to 90 percent. Soybean Rust is now the subject of a special programme being implemented by the International Institute of Tropical Agriculture (IITA) in Tanzania and its neighbouring countries. Other potential soya diseases that may need future research include Frogeye Leaf Spot, Wildfire, Downy Mildew, Red Leaf Blotch and Bacterial Blight.

6 The N2Africa project is funded by the Bill & Melinda Gates Foundation, by a grant to Plant Production Systems from

Wageningen University who lead the project, together with CIAT-TSBF, lITA and many other African partners (including those in the DRC, Ghana, Kenya, Malawi, Mozambique, Nigeria, Rwanda, Tanzania and Zimbabwe).

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Figure 7: Soybean genetic resources in Tanzania: lines being tested at Uyole Agricultural Research Institute

Soybean 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 increase food production. Some 1 800 acres (730 ha) were later planted as intercrops in an attempt to increase land productivity. Figure 8: Soybean genetic resources in the Ihemi cluster, Tanzania: good nodulation on the Dina variety; and poor germination and slow growth in Squire (possibly caused by poor nodulation)

In 1975, national production of soybeans was estimated at 776 tonnes. Soybean output in 2007 was 4 000 tonnes (from 11 000 hectares of land), or an average yield of only 364 kg/ha; some 4 000 tonnes of soya and soya products were imported the same year. Recent estimates provided by regional or district agricultural officers in Mbeva, Rukwa, Iringa, Ruvuma and Morogoro indicate that these five regions alone are responsible for about 51 percent of Tanzania’s national soybean output, that the area potentially available for soybean (based on areas where maize is cultivated) is a minimum of 630 000 ha, and that potential production in these areas is 1.07 million tonnes (see Table 6). MAFC has established targets for the growth of soybean production: these project that the

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3 500 hectares of land producing 5 000 tonnes of soybeans in 2010 will rise to become a cultivated area of 1.4 million ha in 2020 with an output of 2 million tonnes (Table 7)7 Table 6: Recent soybean production, and potential area and output increases in five Tanzanian regions

Region Recent 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 2009 2010

499 332 800

150 000 225 000

Iringa 2005 2006 2010

105 5 940

120 130 000 200 000

Morogoro Presence indicated by farmers/scientists 120 000 Source: MMA 2010 (based on MAFC data provided by regional agricultural officers)

Between 1985 and 2007, the soybean area increased by an average of 1.4 percent per year. Long-term production data show that over the 50—year period, between 1961 and 2011, there was relatively high production in the early 1960s (when Tanganyika Agricultural Corporation was active in Nachingwea). This was followed by a long period of disinterest (judging from the reduced area planted during this time) attributed to the failure of NMC and GAPEX. Production increased again during the 1990s, dipped just after the new millennium, thereafter rising sharply to its 2009/10 peak (Figure 9). Table 7: Targets for soybean areas planted, outputs, proportions processed and exported, and seed production of soybean, 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 40 35 28 000 Source: MAFC, 2010

7 These targets are clearly beyond the bounds of possibility. The 2010 ‘data’ assume a grain yield of 1.43 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 5 000 tonnes). The targets for seeds imply that only a small proportion of the projected area will be planted with seeds not saved by the farmers themselves.

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Figure 9: Trends in annual production of soybean in Tanzania, 1961-2011

Source: FAO, 2012

Profits from production There are considerable price fluctuations for producers both within and across years. In 2013, small lots of beans sold from the farmgate for between TSh 400/kg and TSh 800/kg. In August 2013, a new large-scale enterprise (in the process of setting up a parent stock poultry hatchery) bought 600 tonnes of soya from the Songea area with farmers receiving TSh 800/kg (transport costs to the Ihemi cluster of 153 TSh/kg must be added to this). The same new organization paid large-scale farmers in the Ihemi cluster TSh 950/kg for lots of 150 and 550 tonnes. Soya yields vary considerably depending on rainfall, soil type, altitude8, variety, inoculation, general agronomic practices, and especially pH (soybeans prefer a slightly acid range of 6.2 to 5.8 though many Southern Highland soils are more acidic than this). Smallholder farmers reported yields of between O kg/ha and 1 500 kg/ha during the 2012/2013 season, with the majority producing less than 700 kg/ha. Large-scale farmers reported yields of 1 500 kg/ha to 3 000 kg/ha for the same season. There is thus very little empirical information on which to base a gross margin analysis. One such theoretical attempt for Nyololo village — situated 8 km east of the North-South Highway, between Mufinga and Makambako, at an altitude of 1800 metres — shows gross margins of between TSh 74/ha and TSh 434/ha depending on different scenarios (see Table 8). Table 8: Theoretical gross margin analyses for smallholder soya production in the Southern Highlands

Item

Scenario

Medium yeld (1980 kg/ha) low price

Medium yeld (1980 kg/ha) medium price

Medium yeld (1980 kg/ha) medium price

High yeld (2470 kg/ha) high price

Costs (Ths/kg)

Inputs Labour Transport

92 209

8

92 209

8

92 209

8

97 165

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

8 A few varieties are adapted to particular altitudes.

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3.5 Processing

Overview The soybean is an excellent source of oil and protein. The International Institute of Tropical Agriculture, which has its headquarters in Nigeria, introduced the soybean 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 yet does not contain cholesterol and has only very low levels of saturated fats. Oil can be extracted both for human consumption and industrial uses. Soybean meal, whether full-fat or defatted, accounts for nearly 80 percent 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, heart and liver — and is a good source of several fat-soluble vitamins. Soybean meal is considered the most valuable end product of processing and is converted to various protein rich foods and food 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 as well as with vegetarians and vegans. Tofu is low in calories, has a relatively high protein content, contains little fat and is high in iron. Soya is used in the industrial manufacture of margarine, ghee, milk, and pastries, and is also 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 soybean oils for the production of biofuels. Soya is a highly versatile crop with innumerable prospects to support different agro-industries. Processing may be considered to start the moment soya leaves its point of production. From this point there are many pathways soya can follow before ending up as food (for humans or livestock) or for industrial applications (see Figure 10). Figure 10: Representative examples of pathways followed by soybeans, from the point of production to final use

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Marketing There are no formal markets for soybeans. Yet this does not mean that there is not an active and sometimes keen trade in the crop. The Southern Highlands are the main cultivating area — especially the relatively low and relatively elevated areas (such as Songea at 1 000m and Njombe in excess of 2 600m) — and one of the main suppliers of soybeans for the national market, especially for the Arusha and Dar es Salaam markets. 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 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 soybeans. Traders, nonetheless, bear far less risk than other participants in the chain as a result of having the crop in their possession for the least amount of time. As soya is a minor crop with a rather narrow market the number of links between producer and processor is truncated in comparison with more conventional and widely traded crops. Most soybeans 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 the Babati area, south of Arusha, in Manyara Region. The marketing process for large farms is rather different as they prefer to sell their products directly to an end user. In spite of the theoretical demand from the country’s many animal feed manufacturers, large farms have actually had difficulties selling their soya: in at least one case a large farmer was unable to find a buyer for over two years. The situation may be alleviated with the entry into the chain of the large-scale parent stock poultry breeder in the Ihemi Cluster (referred to previously).

Home use Soya is sometimes considered a difficult crop for smallholders 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 and to produce weaning foods, bread fortifiers, enriched flours and nutritious flavoured snacks. It 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 processing 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 pre packed 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 in the future.

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Figure 11: Steps involved in home-processing raw soybeans to produce soya milk, as described by a female smallholder farmer

Fortified foods and other speciality products for human use There are many ways that soybeans can contribute to human nutrition, 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, experiments around the country indicated that soybeans, with a higher lysine content than groundnuts, were a potential source of protein supplement to cereal diets. Perhaps as a result of this, soya flour began to be used in porridge at a ratio of 1:3 with maize flour. Bread was commonly then made (especially in Morogoro Region) with 10 percent soya and 90 percent wheat flour, 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. Demand for soya products is rising, however, especially from new groups with special dietary needs, such as those living with auto-immune diseases like HIV; those who are lactose intolerance, the aged, ill and infirm. Although soya has long been perceived as a solely beneficial food fortifier, there is an emerging controversy that the over consumption of soy products may adversely affect human health, especially the balance of hormones. Widely disseminating it as a food in developing countries, therefore, may not only have adverse health but economic effects. Access to foods containing soya vary from area to area and from consumer group to consumer group. In Tanzania, locally processed products already on the market include baby food, soy milk powder, pure soy flour, and a ‘power’ flour known as ‘lishe’ (containing soya milk, rice and maize). It is also an ingredient in other cereal flours, other fortified wheat and maize flours (intended for staple foods like ‘ugali’ and ‘uji’), confectionary products (such as bread, buns, chapatti, cake and biscuits), and a beverage similar to coffee (Figure 12). In addition to local produce, the ubiquitous soy sauce, soybean oil, soya lecithin and yet more soya in one form or another is present in an amazing range of imported products. These include creamy wheat cereal, mayonnaise, Worcestershire sauce, organic and non-organic soya drinks, soya milk, family porridge, margarine, infant foods and even peanut butter! These products usually derive from non-genetically modified soybeans grown in various parts of the world (from North to South America, and from Europe to Asia) and manufactured in a bewilderingly array of countries both in Africa itself, and across North America, Europe, the Middle East, the East and Southeast Asia (see Annex 4).

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Figure 12: A range of soya products produced and on sale in Dar es Salaam (in the retail outlet of the processor)

Not all — indeed, 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 (whether solvent extractors or mechanical expellers — see Figure 13) suitable to Tanzania conditions. Cultural and culinary barriers arise since people prefer to eat food with which they are familiar. In spite of this, there is a burgeoning food fortification industry that is meeting current demand and creating opportunities for the future. The industry currently consists of a considerable number of small and very small operators (see Box 3) — many of whom have received training through SIDO — and a smaller number of medium to large-scale processors (Box 4). Most processing is based in Dar es Salaam or Arusha although nascent specialist businesses are developing in other parts of the country (Annex 5). Some small operations are not registered for barcodes, yet barcode technology is gradually bringing about a business revolution, which is particularly affecting small and medium enterprises in other sectors. Barcodes will be an important contributor to future economic growth since they can help 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 the use of bar codes and the quality of products. Barcode technology has greatly increased the sale of local produce in supermarkets and other retail outlets. In the 18 months following their introduction in Tanzania more than 360 companies adopted the technology for almost 6 000 varieties of goods. The processing industry can be expected to grow in the future and to expand to include many of the country’s animal feed manufacturers (Annex 6).

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Figure 13: An electric powered expeller of the type that can be used for soybean processing

Animal feed The main future demand for soybean will come from the animal feed industry. Globally, only 2.5 percent of soya meal is used for human food and for industries other than animal feed. Cows consume 21 percent of the word’s soya meal, pigs 25 percent and poultry 46 percent. The price and nutrient characteristics of soya meal favour its production for pigs and (above all) poultry. Soya meal is highly digestible and is high in the amino acids that complement those found in cereal grains. There is already some limited use of soya cake or meal by some larger feed manufacturers (though there is currently more intention than action). It is hoped that soya cake (or meal) will eventually replace, either totally or partially, the ground ‘dagaa’ that 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 to date have been mainly from India, either of solvent-extracted or full fat meal (the former has a crude protein content of 44 percent, and an ether extract of 0.5 percent; the latter a crude protein of 38 percent, and an ether extract of 18 percent). Solvent meal is slightly more digestible for ruminants, but de-fatted meal produces 5 percent more metabolizable energy in poultry (the main species using soya meal in Tanzania). Both meals are comparable in terms of their essential amino acid composition, but de-fatted meal has a higher vitamin content (in some cases, much higher). The macro-mineral content of both is low, but again de-fatted meal tends to have more micro-minerals (iron, copper and zinc). One new buyer of soybeans purchased 1 300 tonnes of whole beans for processing in July and August 2013 for poultry feed in the Ihemi Cluster; the buyer estimates needing 1 000 tonnes per month over the next 10 years. 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

27

cake in its own mixed poultry feeds (Figure 14); it estimates a requirement of 200 tonnes in the immediate future with higher needs in the longer term. Using an expeller (rather than solvent extraction) also helps (through heat) denaturize enzymes — such as urease and trypsin inhibitors — that would otherwise reduce the nutritional value of the meal. It therefore also avoids the necessity of having to toast the meal separately.

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-size ambitions. She set up her business in 2011 with the help of SIDO training. Joshua Products (named after Esther’s son) is still in the process of being registered by TFDA and TBS, but things are already happening. Esther uses an agent in Babati to buy soya from local producers — who may sell lots of only 20—30 kg — and pays TSh 1700 for every kg delivered to the garage under her house that serves as her ‘factory’. Rather than go through the long, slow process of producing milk (see Figure 11) she decorticates her soya (to remove the outer coating) in a local hammer mill at a cost of TSh 200/kg. Her range of products includes fortified flour, a soya drink powder and a soya mix and soya meal that her customers can use to mix their own fortified foods. Her main product is fortified flour (a mixture of maize, wheat, finger millet, sorghum, rice, millet and 10 percent soya, mixed manually), which she sells wholesale to an agent for TSh 2000/kg. The inner plastic lining is sealed by hand by passing it across a candle flame; the outer cardboard packaging is produced and printed in Nairobi and costs TSh 350). Her three other products sell in 200g plastic bottles for TSh 1500 (the bottle and label costs TSh 280). Her turnover, including about 300 kg of soya, is over 3 tonnes per month, and she employs six women and four men. Esther retails some of her own products directly in Arusha and travels by local bus to sell in Moshi and Babati. She also sells wholesale to agents who resell in Mwanza, Shinyanga, Babati and Tanga. At one small general store in Tanga where Esther’s fortified flour was on sale, the female owner had paid the wholesaler TSh 3500 per kg and was selling it at TSh 45 000 (she also paid the wholesaler TSh 3500 for concentrate products which she sold at TSh 4000). It thus appears that the main benefits of selling soya come to those in the top links of the chain.

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Figure 14: Soya oil (left) and expeller cake (right) processed in Morogoro from local whole soybeans

Limited data make it hard to calculate the benefits or profits for producers and other participants, but the data that are available indicate benefits throughout the chain to those involved in soybeans (Table 9).

Box 4: Is bigger always better? A medium-scale enterprise in Dar es Salaam producing soya foods

Power Foods Industries Ltd was established in 1993. From very small beginnings it has grown to become a company to contend with in the manufacture of fortified foods. Around 28 people are employed in its Dar es Salaam factory, and six women travel around 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. By 2025, the company aims to become a market leader in processing and distributing high quality nutritious and safe food, with the aim of contributing to reducing malnutrition in children and other vulnerable groups both in Tanzania and across the world. In order to help Anna achieve her vision she has been sponsored by SIDO to attend two short courses in the USA on food and fortified food production. In 2000 Anna bought a mechanical expeller in the United Kingdom that was suitable for the treatment of soybeans. 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 2013 is processing only loo 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.

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Table 9: Theoretical gross margin analyses for participants in the soybean value chain

Item

Activity

Export trading

Poultry feed (full fat raw

material)

Poultry feed (full fat

processed)

Large processor

Supermarket Wholesaler Retailer

Costs (TSh/kg)

Raw material Inputs Labour Transport Other

383 5

16 50 16

340 20

3 0 0

480 20

5 0 0

650 ? ? ? ?

1 800 0 3 0

15

800 0 8

10 11

900 3 0 5

10

Total variable costs 470 363 500 ? 1 818 829 918

Revenue (TSh/kg) 503 400 500 1 800 2 000 900 1 000

Gross margin 33 37 0 ? 182 71 82 Source: adapted for MMA 2010

Hindsight The processing part of the soybean value chain is beset with problems, some cascading down from ‘above’ (in terms of laws, regulations, unwarranted and unproductive interference), some seeping up from ‘below’ (in terms of lack of organization, poor facilities, a non-discriminating customer base). The main issues in terms of processing are:

a disorganized and largely incomplete market chain;

a lack of real competition among buyers (farmgate prices are similar throughout the

country, but sellers seem generally to accept these without too 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;

little interest from the majority of domestic customers in terms of better quality or value added attributes;

the limited quality and quantity of the range of processed products;

local horizons with regard to ‘quality’ considerations are probably lower than international ones; and

a generalized laissez faire attitude at all levels of the chain from law makers to primary producers.

3.6 Wholesale and Retail Distribution

The wholesale trade in soybeans and their products is somewhat limited. Manufactures of fortified human foods often use an agent to distribute their products. The margins between the manufacturer’s sale price to the agent and the agent’s 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, while convenience stores buy from manufacturers or agents before selling smaller packs to individual consumers. Retail packaging is far from standard (see Annex 5): some of the smallest producers have already made a considerable effort to make their packaging attractive, 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 only produces 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.

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3.7 Target Group Considerations

A recent analysis of global food security placed Tanzania 99th out of 105 countries measured, with two of the six countries below it being contiguous (Burundi, Democratic Republic of Congo) and two being relatively near neighbours (Ethiopia, Chad). FAO data indicate that 18 million Tanzanians were undernourished in 2012 (or 38.8 percent of the population), from 8 million (or 29.4 percent) in 1992. Market access among rural households is limited. Only 10 percent of rural farming households are market oriented (i.e. sell more than 50 percent of their output) and only 37 percent of rural household agricultural production is marketed (29 percent are crop sales and 8 percent are livestock sales). In a survey of 240 randomly selected households in Kilosa, Njombe and Mvomero districts only 67 households (27.9 percent) were growing or had grown soybeans. Over 64 per cent of these households, were members of farmers’ associations (the latter may indicate the positive effects of association on crop diversification and risk-spreading). Most farmers saved their own seed for replanting, whereas others received seed from a neighbour or a government programme. In Kilosa, many farmers obtained seed from SUA; other more minor sources of seed include free seed distributed by an NGO, and seed purchased from a seed company, a market and an agro- input shop. Several households claimed to have planted improved soybean varieties in the previous five years but many more farmers (45 percent) said that no improved seed was available or they had not been provided with information on improved varieties (26 percent). These two factors are not, of course, confined to soybean production, and the challenge for formal seed companies, agro-input dealers and indeed the agricultural development community as a whole is to provide more information to farmers. Farmers can hardly be blamed for low outputs or for continuing to use saved seeds when alternative and improved seeds are not available. A survey by the Regional Rice Centre of Excellence in 2011 probably has some general implications. It surveyed 722 farming households in six districts (Bunda, Sengerema, Mbarali, Kyela, Mvomelo and Kilombero) and found that:

households were primarily producing 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 percent of households reported a surplus of food, 33.9 percent reported having enough food to meet household needs, 23.8 percent had seen a small deficit and 8.7 percent had suffered a large deficit);

men were at the head of 87 percent of the households, women of only 13 percent; and

the average total household income was TSh 1 382 821, with crops and livestock sales contibruting the most to income. Men had a higher income (TSh 1 545 824) than women (TSh 1 040 724).

It is difficult to determine if gender requires a specific focus. The key is to be inclusive and involve both men and women in future programmes and activities (at a village meeting in Mngeta in August 2012, 40 percent 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, seeing it as a livelihood of the past rather than the future. Young people from rural areas tend, therefore, to move 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 tend to have relatively more small animals than large ones. 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

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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 (women being less likely to own cattle which cost more and are more input-intensive.) Despite these differences, the share of households with only female livestock managers is not completely disadvantaged in terms of market access (40 percent sell livestock). When considering the scale of production, female managers are significantly more commercially oriented, with 37 percent of their total livestock production being sold on the market (compared with only 30 percent sold by male managers). This highlights the fact that despite the obstacles faced by women in the livestock sector, commercialization of production may not necessarily be affected.

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4. SYSTEMIC CONSTRAINTS AND UPGRADING OPPORTUNITIES

4.1 The Business Enabling Environment

Doing business The ability to carry out business in an efficient and profitable manner is important not only for national commercial operations but also for attracting Foreign Direct Investment (FDI). According to the World Bank, in 2012 Tanzania ranked 127 out of 183 countries in doing business, with the regional average being 137. Concurrently, the World Economic Forum found Tanzania to be one of 37 ‘factor-driven economies’ and ranked it 120 (down from 113 the previous year) out of 142 countries. It cited 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. These facts do not bode well for encouraging external or internal investment in new or expanding businesses, and it remains to be seen whether, under existing (and probable future) conditions, the necessary investments will be made to take the soybean chain to the next level. Figure 15: Doing business in Tanzania

Source: adapted from the World Bank, 2012

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 was to have four regulations in place by 2009/2010 (only one was in place in 2005/2006): that target was achieved. The 2010/2011 target was to have 13 pieces of legislation in place (there were only nine in 2005/2006): this target was superseded and 20 were in place by the target period. Six new acts on agricultural marketing were approved in 2004/2005 and a further six pieces of legislation were enacted in 2009. Current legislation includes:

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The Food, Drugs and Cosmetics Act No 1 of 2003 (which establishes the Tanzania Food and Drugs Authority or 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);

The Fertilizer Bill (2009);

The Food Labelling Regulations;

The 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. There are additional laws and regulations that pertain to specific types of contracts (e.g. crop related legislation, banking law, microfinance, warehouse receipts and secured transactions). The importation of foundation seeds has 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. The National Variety Release Committee must approve breeder seed. The approval process for importing seed remains bureaucratic, involving at least 10 steps and five regulatory agencies and taking at least six months to complete. Once imported, varieties are subject to continued scrutiny after import by the Tropical Pesticides Research Institute (TPRI) and the 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 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 high-yielding seed varieties. As a result, agricultural does not realize its potential and Tanzanian crops yields are among the lowest in the region. Seed regulation and certification particularly effect women and their children who might be more food secure if they had access to higher yielding varieties.

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 and 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 the Commissioner for Lands may grant a right of occupancy or leasehold (upon application and the fulfilment of certain conditions). Village land is administered at grass roots level and a Certificate of Title can be granted to the holder(s). The Village Land Act provides for a customary certificate of occupancy, and thus theoretically provides a mechanism for collateral. However, banks are reluctant to take village land as collateral for several reasons. Banks use collateral to secure loans, with the understanding that in the case of

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defaulting on payments, the collateral assets can be sold to cover bank losses. Collateral is thus only as good as the market demand for the asset. The sale of village land to someone outside the village requires that its status be changed from village to general land. Depending on the size of the parcel changing hands, this could require approval at a village, district, region or even national level, and may even require presidential approval. The process makes village land rather illiquid and therefore unsuitable for collateral. Despite this, some banks have performed due diligence at the village level to ascertain whether local villagers would be willing to buy the land in the case of repossession. In such cases, banks restrict the possible demand for practical reasons, which has the result of limiting the value of the land on resale. Regardless of the buyer, the resale barriers created by the Village Land Act make the policy essentially anti-credit. As indicated previously, although investors can theoretically obtain land rights, anecdotal evidence suggests that this is easier said than done. The lack of transparency in land use, rights and ownership affects smallholders, large farmers, businesses as well as investors (both local and foreign), and are some of the most critical factors that deter potential large-scale investors.

Government policy for the soybean 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. The effects of these emerging policies have yet to be fully determined. The Agricultural and Livestock Policy (ALP) was developed under the previous Ministry of Agriculture (when ‘agriculture’ included both crops and livestock). The stated goal of the policy is “…to improve the well-being of the people whose principle occupation and way of life is based on agriculture, most of whom are smallholder farmers and livestock keepers...the focus of this policy is to commercialize agriculture so as to increase income levels.” In the policy, the Government redefined its role, recognizing the need for the private sector to assume a dominant role whilst leaving the Government to perform core public sector support functions (such as research, training, extension, policy formulation, information services, sanitary regulations, quality control, environmental protection, creation of optimal market conditions and promotion of agricultural growth). The latter functions were purposefully selected because they were deemed less immediately amenable to privatization; however, it was envisaged that in the long term some of those functions could be shifted to the private sector. The ASDS (introduced in 2001) and the ASDP (introduced in 2002) are both managed by MAFC. They are a sector-wide framework for managing the institutional, financial 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 others, irrigation and water management, better land husbandry, mechanization, storage, post-harvest activities, agroprocessing, community empowerment and agricultural information. Among the constraints to meeting the national agricultural growth targets, ASDP acknowledges high transaction costs as a result of poorly maintained or inadequate infrastructure, 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 implementation, monitoring and evaluation are unsuccessful.

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The ‘Kilimo Kwanza’ (‘Agriculture First’) strategy was launched by President Kikwete in 2009. It aims to energize and coordinate government efforts to transform agriculture. The strategy is based on 10 pillars (see Box 6) each of which will require political will, long-term financing, and regulatory reform if they are to be successful. The initiative focuses on many issues including the provision of inputs, the strengthening of the national Food Reserve Agency’s food reserve, and the improvement of the rural road network, irrigation and storage facilities. ‘Kilimo kwanza’ is slowly gaining momentum. Developing the soybean value chain would open up opportunities to leverage ‘kilimo kwanza’ through growth and though critical interventions that could help move forward a more commercial agenda. To have a real and sustainable economic impact, however, supply chain development initiatives must operate in an environment in which the government and the private sector support each other. In such a supportive environment, trust and joint action are of fundamental importance. In the past, there have only been limited opportunities for the public and private sector to meet, discuss, solve problems and form mutual resolutions. Priority actions could be directed at enforcing quality and standards, and developing infrastructure and trade policy.

Box 5: The Sound and the Fury. Over-Regulation and Under-Enforcement in Crop Trade Activities Internal trading:

A free Tax Identification Number (TIN) is required for all businesses. This is obtainable from the Tanzania Revenue Authority (TRA).

After receiving a TIN number, a business licence is required. This can be obtained from BRELA, based in MITM.

Factories, mills, shops (and related premises) require a premise inspection certificate. This is obtained from TFDA.

Export and import trading:

A free TIN from TRA is required for all businesses (to allow for taxation);

A business/export licence is required from BRELA (after income tax payment to TRA);

A sanitary and phytosanitary export certificate is required for each lot exported (this is issued by the Plant Health Service);

An import permit is required: this is issued by the relevant authority in the importing country.

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

Agriculture is an economic priority in Tanzania;

Kilimo Kwanza is a national strategy intended to accelerate agricultural transformation;

It is not a new strategy but rather a catalyst for the implementation of the Agricultural Sector Development Programme (ASDP), with some additional features;

In contrast to the past, the private sector is expected to lead the implementation of ‘kilimo kwanza’;

The strategy is formulated by the Tanzania National Business Council, a forum for public-private dialogue.

The Ten Pillars of Kilimo Kwanza

Mobilize political will and the commitment of all Tanzanians to implement ‘kilimo kwanza’,

Finance Kilimo Kwanza including through a new Tanzanian Agricultural Development Bank;

Emphasize good governance, better coordination, monitoring and evaluation;

Prioritize what is produced and marketed, giving top priority to food crops;

Improve land access and tenure security;

Establish incentives to attract and retain private sector investment in agriculture;

Establish industries for backward and forward linkages, and to provide added value;

Utilise scientific, technological and human resources;

Develop infrastructure;

Mobilize the government machinery and private sector and sensitize all Tanzanians for Kilimo Kwanza.

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The TSDS 2010-2020 was produced by the Crop Promotion Service of the Crop Development Division of MAFC. TSDS is one of many initiatives intended 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). It has been proposed that a National Soybean Coordinating Unit (NSCU) should be formed, with MAFC operating as the chair and including experts from MAFC, the Ministry of Livestock Development, the Prime Minister’s Office for Regional Administration and Local Government (PMO-RALG), the Ministry of Water and Irrigation (MWI), the Ministry of Industry, Trade and Marketing (MITM), the Ministry of Natural Resource and Tourism (MNRT) and the Ministry of Lands, Housing and Human Settlements Development. The NSCU will coordinate the TSDS by providing strategic policy guidance, facilitating key institutional linkages and monitoring performance to ensure that all goals and objectives are achieved. It has also been proposed that there should be Special Units for Implementation (SUIT) that will include experts and technicians from the ministries already mentioned as well as representatives from the private sector. Under NSCU leadership, the Special Units 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 soybean sector, increasing output some 400 times from 5 000 tonnes in 2010 to 2 million tonnes in 2020 (Table 10). The budget required for the strategy to succeed is calculated at TSh 1.555 billion (US$ 962 848) for the initial year, followed by annual increments of 10 percent. Donors are requested to support the programme. In late 2013 the programme was already well behind its targets. The Government accepts the urgent need to channel funding to the agricultural sector but its plans appear short sighted. Private institutions in the financial sector have avoided lending to agriculture because of the risks involved. Should the Government decide to channel funding to agriculture (in spite of the risks) rather than focussing on addressing the risks, 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 facilitates access to credit with the support of a guarantee that varies from 30 to 70 percent. It is not a first-loss guarantee so lenders must exercise their recovery methods before PASS provides coverage. The Government has been increasing its overall budgetary allocations to the agricultural sector but from a very low base: for example, the agriculture budget was only just over 7 percent of total government expenditure in 2010 (it was 30% less in 2009). The budgetary commitment still remains far below the required level, is almost exclusively committed to on-farm activities, and almost completely disregards the demand end of farm-to-market chains. There is no funding from Government either for the market or supply chain development.

Box 7: Objectives of the Tanzania Soybean Development Strategy Main objective:

to explore the potential for soybean in the country. Specific objectives

to increase production (from 3500 tonnes on 3000 ha in 2010 to 2 million tonnes on 1.4 million ha by 2020);

to increase consumption (from 0.5 kg per person per year in 2010 to 15 kg in 2020);

to increase local processing into various products;

to significantly increase the contribution of soybean to reducing poverty and malnutrition, increasing employment and contributing to national GDP,

to increase Tanzania’s competitiveness as a soybean producer and exporter both in Africa and worldwide.

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

Year Cultivated 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

Food safety and quality Human wellbeing 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 of paramount importance in both the early and later stages of the chain. Food safety and consumer health issues should focus on agricultural practices and farm management at the producer level, and continue through the marketing chain, promoting cleanliness (of product, personnel and premises) during processing, and good presentation to the consumer. Some companies already attempt to adhere to this precept (see 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

Public infrastructure It is usual to read that Tanzania is well endowed with public infrastructure including roads, rail, electricity, water, ports, telecommunications and markets. In general this is true, but it is not the whole truth.

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While tarmaced trunk roads (which make up around 4000 kilometres of Tanzania’s 85 000 kilometre main road network) are generally in fair to good condition, they are often narrow, resulting in long journey times as heavy haulage vehicles hold up traffic. There is also 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 cost increases, as a result of wasted time (Figure 17) and the frequent need to pay facilitation fees to secure a right of passage. Unpaved rural feeder roads are often in poor condition, and result in further delays and costs as a result of axle and suspension damage. Many feeder roads are impassable after heavy rains because of broken bridges and waiting times may be extended for hours (or even days) because of flooding. Good tarmac roads can half the journey times associated with dirt roads, as for example on the 240 km Tunduma-Sumbawanga link, which is expected (when completed) to lower the journey time of a standard light car from more than six to less than three hours. Poor roads (both rural and some main) result in high to very high transport costs: an estimated four times the cost per tonne per kilometre of good paved trunk roads. High road transport costs mean that rural producers do not gain the full benefits of high consumer prices and have to pay 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

The rail system (consisting of the Tanzania-Zambia Railway commonly known as TAZARA, and Tanzania Railways) is extremely inefficient. Only TAZARA passes through the Southern Highlands, and the Central Line from Dar es Salaam to Kigoma operates, at best, only two days a week. Many transporters have, therefore, changed from rail to road to transport heavy items such as copper sheeting from Zambia, thus further lengthening the duration of journeys for other users. The northern line (which connected Tanga to Arusha and Kenya, and linked with a branch to the Central Line9) has been defunct for many years.

9 This was ‘cannibalized’ from its service to the (ill-fated and much derided) Groundnut Scheme line, which ran from

Mtwara to Nachingwea in the 1960s.

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Dar es Salaam, and the newly opened Songwe International Airport (some 10 km from Mbeya), are the only airports that can land a large transport aircraft and could be used in the future to export perishable produce from the Southern Highlands. 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 and most of the rural hinterland is not connected to the 33kVa grid. Supply is often intermittent and may be interrupted for several hours at a time. Telecommunications have improved vastly since the 1980s when it could take two days to get a connection from rural areas. Mobile services (that also allow rapid money transfer) need to be complemented by high speed internet in order to improve business efficiency.

4.2 Related to Vertical and Horizontal Linkages and Value Chain Governance

Integration The vertical and horizontal linkages in the small-scale sector of the soybean value chain are very limited. Participants and enterprises do not generally cooperate or coordinate. There is some vertical integration with, for example, agents acting as buyers and sellers for some processors. There are traders associations in every region and in all urban centres but little cooperation between them: they seem to perceive themselves as advocacy groups to lobby their local governments or municipalities. There is no umbrella organization for the entire small-scale indigenous sector which focuses on its development, supports cooperation or provides relevant information to the various market participants. On the positive side, however, there is vertical integration in the industrial poultry sector where soya is assuming an increasingly important position as a feed ingredient (Box 8).

Governance The Southern Highlands soybean 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 — Governance mechanisms are underdeveloped; participants operate in an uncoordinated and disorganized fashion and if rules exist they are often ignored;

Poor supervision of lower-end associations — The Crops Board has the mandate to coordinate stakeholders but has neither the personnel nor resources to do this;

Too many small participants and small transactions — The chain is characterized by too many small producers resulting in increased costs;

Lack of market coordination — There is no lead or coordinating organization in relation to markets, technologies and information so that producers and processors have no incentives to improve their product (or the chain process) to promote sustainable income-earning opportunities;

Unclear and conflicting roles and mandates— 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 enforced, or not enforced at all, in part because of relaxed production and trade regulations; and

Integration — There is little horizontal and vertical integration of producers, mid-chain participants and retailers.

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4.3 Related to Support Services

Overview A service can be defined as a function performed or offered by a service provider and used by a customer to the benefit of the latter. Numerous service providers are purported to operate in Tanzania’s soya 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 role of the public sector has been elaborated in numerous documents that state that the Government — in collaboration with other stakeholders — will provide core public services such as extension, information, research, training and infrastructure. It will also formulate policies, provide a regulatory framework and protect the environment. Public sector roles are intended to be implemented by: the Agricultural Sector Lead Ministries (ALM) including MAFC, MLFD, PMO-RALG, the President’s Office—Planning Commission, MWI, and 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.

The Cereals and Other Produce Board In 2009, the Cereal and Other Produce Act came into being. This act was intended to “make provisions for the establishment of the Cereals and Other Produce Board, for the promotion and

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 Tanzania Breeders and Feedmills Ltd (Tanbreed), a company set up in 1992 in Mbezi (on the northern outskirts of Dar es Salaam). Tanbreed was an outgrowth of Interchick and both are universally known as ‘Interchick’. Over the years, Interchick has become a large-scale vertically integrated operation consisting of feed mills, a hatchery, contract growers and a processing facility. It provides feed and chicks to contract growers, and plans to substantially expand the present number. The application of good production practices has reduced animal mortality from 30 percent to 10 percent (although education of its employees in biosecurity remains a problem). Almost 70 percent of its business is in the greater Dar es Salaam area. To overcome the shortage of eggs and to increase product demand, Interchick imports chicks, eggs and some processed poultry products from its Kenyan parent company, Kenchick, as well as its Zambian associate, Hybrid. Factors that limit the company’s expansion include: distribution logistics, the limitations of hatchery equipment and capacity, the limited availability of eggs, the need for slaughter-line upgrades and maintenance, limited human resource capacity, and high investment capital costs. Expansion strategies include: the purchase of another refrigerated truck to aid distribution, modification of the slaughter-line to improve efficiency, expansion of hatchery facilities from 260 000 to 600 000 chicks (three week cycle), increasing the number and volume of grower contracts, consumer awareness programmes, implementing value-added processing and the adoption of quantity management programs and HACCP-based systems. Future initiatives include identifying alternative sources of feed protein (soya) to minimize the risk of introducing salmonella, and eliminating the quality issues sometimes associated with a fish protein based diet (i.e. the fishy smell and taste). To overcome the problems of obtaining parent stock and quality feed, in February 2012 the company set up a new integrated facility and farm near Morogoro. There are plans for future export of their products.

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development of cereals and other agricultural produce and to provide for other related matters”10. The main functions of the Cereals and Other Produce Board — as defined in Section 6 (1) of the Act — are to carry out commercial activities and other activities necessary, advantageous or proper for the development of the cereals and other produce industry. As per Section 6 (2), the Board may facilitate:

agricultural research on cereals and other produce;

extension services to growers of cereals and other produce;

input services, including fertilizers and agrochemicals;

the promotion of production, marketing, processing and cereal storage;

the dissemination of information or data relating to cereals and other produce;

the promotion of technological advancement in cereals and other produce; and

assistance in the formation of farmers co-operatives or organizations. The Board is allowed (subject to the provisions of the Act and any other written laws) to perform any commercial function or hold interests in any undertaking or projects associated with cereals and other produce. The commercial functions referred to under subsection (1) and Section 7 (2) include the:

purchase and sale of cereals and other produce at a competitive price;

import or export of cereals and other produce;

processing of cereals and other produce;

provision of warehousing services for cereals and other produce;

provision of grain and other produce, as well as cleaning, drying, weighing, grading and packaging services according to market standards; and

performance of any other commercial functions approved by the Minister for the development of trade in cereals and other produce.

It will be the duty of the Board — according to Section 8 (2) — to act in an appropriate manner to promote the quality and competitiveness of the cereals and other produce industry within and outside Tanzania. The Act also makes provision — under 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 Zonal Councils, according to Section 15 (3), are intended to strengthen cereals and other produce in their respective areas by:

promoting cereals and other produce;

forming farmers’ associations and other bodies;

acting as a consultative forum for price negotiations between farmers and buyers/traders;

establishing and operating a market information system for produce and agricultural inputs;

promoting the use of weights, measures and grading standards;

collaborating with the Board and Local Government Authorities (LGAs) to provide agricultural education on cereals and other produce,

performing any other functions the Council deems necessary for the development of the cereal and other produce industry; and

preparing and promoting zonal production targets. The Board (according to Section 17) will be funded and resourced by:

such sums of money as may be appropriated by Parliament;

10

As a result of the 2009 Act there were amendments to (and effective subsuming of) the Food Security Act, 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.”

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any money raised through loans, donations or grants (either inside or outside Tanzania;

any loan or subsidy granted to the Board by the Government or any other person;

any money derived from commercial activities; and

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 act, 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 as a result of the perennial lack of personnel, equipment and finances.

Value chain finance Much of the soybean chain has need of capital and/or recurrent financing. Until early 2013 it was impossible for most chain participants to obtain finance. Many financial institutions provide some credit for agriculture (see Section 3.3, Table 4) but there is no known subvention to soybeans other than by CRS. NMB has a large agricultural portfolio that could be extended in future to soya. MFIs and SACCOS are possible sources of credit and finance. Finance in — and credit for — the soybean value chain is probably restricted by high interest rates, high investment costs in some enterprises (especially fortified food processing) and long periods of return on the initial investment. There is also a lack of awareness among 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 to cash via informal sources) so that they can dominate markets and squeeze out small operators who cannot pay immediately in cash;

the large finance institutions lack an understanding of the financial requirements of soybean stakeholders;

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, 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;

there is no concept of integrated value chain finance such as a combined loan scheme for interdependent small-scale producers, traders, processors and retailers.

Insurance As far as can be ascertained there are no insurance schemes for smallholder crops in Tanzania.

Research services The fundamental purpose of research is to develop technologies that address the problems affecting the industry in order to increase agricultural production and productivity, augment the industry’s contribution to the national economy, and improve livelihoods. Various stakeholders currently undertake research. The National Agricultural Research System (NARS) is 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 MITM) are also publicly funded bodies. Sokoine University of Agriculture (SUA) is the main academic research body. The University of Dar es Salaam, Moshi University College of Cooperative and Business Studies, Mzumbe University, the Open University of Tanzania and the Institute of Rural Development Planning also participate in some aspects of agricultural research and training.

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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 CGIAR — IITA, CIAT, IRRI, World Vegetable Research Centre (AVRDC), and the Africa Rice Centre (AfricaRice, formerly the West Africa Rice Development Association or WARDA) — work closely with the NARS: several other CGIAR centres have a smaller presence in Tanzania, as does the Association for Strengthening Agricultural Research in Eastern and Central Africa (ASARECA). To assist research centres to plan and implement research programmes relevant to their 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) and 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 percent 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, the Government’s allocation to research can be seen as pitiful. External donors have provided limited and intermittent funding for research but have failed to view their commitments as long-term. In addition, the fractionation of research through devolution and the presumed advantages of zonal priorities, have not assisted progress in providing extension services. The Agricultural Research and Training Institute in Uyole (see Box 9) was the only centre conducting research into soybeans in 2013 (see Section 3.4 and Table 5 for historical soya research). Farmers have limited knowledge of soybean production: of its potential as food, as feed for livestock, as a soil conditioner and improver. Research (and extension) services have been particularly weak in supporting soybean production.

Extension services Historically and traditionally, extension services have been financed entirely by the public sector. In general there has been far too much direct government involvement in the management of extension services, in spite of declining resources. For many years after Independence, Government

Box 9: Uyole Agricultural Research and Training Institute Uyole ARI is located 10 kilometres to the north of Mbeya, on the main north-south highway, and 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 Tanzania and the five Nordic countries (Denmark, Finland, Iceland, Norway and Sweden), an agricultural research and training institute was established in Mbeya in 1970. Crop research began in 1972 and livestock research in 1975. Change was not slow in coming and, in July 1976, the institute became a Public Corporation as the ‘Uyole Agricultural Centre’. The Uyole Agricultural Centre ceased to operate as a parastatal in 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, it is now administratively responsible to the Department of Research and Training (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. Pyrethrum is the only cash crop to be the focus of a large-scale research since it is an important component in Southern Highlands farming systems.

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collaboration with the private sector, Faith Based Organizations (FBO) and other NGOs was minimal. Since the 1990s, however, some extension services have been provided by the private sector in the form of farmer-led initiatives, and private agribusinesses — supplying fertilizers and agrochemicals — have started to supplement public services. The National Agriculture and Livestock Extension Policy and Implementation Guidelines (NALPIG) were developed to elaborate on the extension policies of the Agriculture and Livestock Policy of 1997. The guidelines were prepared to advise all extension workers on the mainland of Tanzania (public, private, NGO), and are currently being reviewed to incorporate institutional and policy reforms that have taken place since they were first drafted. 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 the involvement of a broad range of stakeholders. Extension workers are usually trained at one of nine Ministry of Agriculture Research and Training Institutes (MARTI) located around Tanzania. Graduates are awarded a Diploma or a Certificate in various aspects of crop production and protection. The MARTIs generally have few teaching staff, few staff houses and insufficient student accommodation. At most institutes the 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 of the soybean chain (such as commercial production, private input supply and processing) have specific training needs that require the re-designing of training curricula and the development of new ones. As indicated in Section 3.3, insufficient producers have received extension advice. This is not surprising given that there is a severe deficit of extension workers, as well as a lack of transport and equipment for workers and a perceived lack of producer need. The situation has not been improved by the decentralization of extension services from MAFC to local government authorities, which are perennially short of funds. There is clearly a need for massive additional training of field extension staff using MARTIs and retraining of the existing ones to equip them with new technologies (and motivate them to actually get out into the field). In order to fully support agricultural crop value chains, 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 trainers in 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.

Seed supply Until 2009, public and quasi-public bodies controlled the production and supply of seeds in Tanzania (see Section 4.1). Liberation has not, however, greatly improved seed supply. Uyole ARI and SUA are the only two organizations in the country that formally breed and bulk seed. Only two varieties — Uyole Si 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

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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 though not, perhaps, 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 seeds and the restriction on varieties, nevertheless, are undoubtedly hindering soybean production in the country.

Market information Linking farmers to markets is a key step towards promoting agriculture and reducing poverty. The World Bank views enhanced smallholder competitiveness and facilitation of market entry as critical factors in agricultural development, along with improved market access and the establishment of efficient value chains. Pillar 2 of CAADP is entitled ‘Market Access’ and most African governments, including Tanzania’s, have been developing policies and programmes to link farmers to domestic, regional and international markets. Improving the quantity and reliability of the agricultural data available to decision makers and stakeholders (in both the public and private sector), are thus preconditions for formulating effective agricultural and rural sector investments that will allow farmers to access 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 the quality of data remains a major concern. Many of the collected (and sometimes collated) data are inadequate, lack consistency (through time and between sources) and are full of gaps. Data collection is not embedded in the Tanzanian psyche. There is lack of responsibility for verification 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 in the process of setting up — Market Information Systems (MIS). Those relevant to the future of soybean production include the systems of:

Foodnet — a partnership between IITA, CRS, ASARECA, Agricultural Cooperative Development International (ACDI) and Volunteers in Overseas Cooperative Assistance (VOCA).

The Famine Early Warning Systems Network (FEWS NET) — funded by USAID, which monitors trends in staple food prices in East African countries vulnerable to food insecurity. Its Bulletin shows monthly prices in the current marketing year in selected urban centres. This allows users to compare current trends with five-year average prices (indicative of seasonal trends) as well as prices in the previous year.

Regional Agricultural Trade Intelligence Network (RATIN) — a service of the Eastern Africa Grains Council (EAGC) provides time-series data on prices, storage facilities, cross-border trade and food balances.

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 the majority of Tanzania’s main crops, though they do not yet do so for soybeans (they have been pre-empted by the Market Committee of Tandala in Dar es Salaam (Figure 18). However, networks are not necessarily easy to access or use by individual small producers, who therefore continue to obtain information on prices and demand from traditional sources (such as their neighbours, local traders, local shops and markets). Inevitably, this means that producers remain price takers not price makers.

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Transport Most soybeans are produced in the Songea area, far from the major centres of consumption. The country is reputed to be well endowed with road and rail communications but this overstates the reality and much of the Southern Highlands still remains isolated from the trunk road system. Soybeans usually move from production to consumption areas as part of mixed loads with agents hiring space on any convenient vehicle, usually trucks or buses. Transport costs from Songea to Dar es Salaam (or Arusha) are paid as lump sums and average about TSh 150/kg. This equates to between 30 and 40 percent of the farmgate price. Smaller lots may cost significantly more to move (up to TSh 250/kg). Figure 18: Wholesale prices of food crops in Tandala market, Dar es Salaam, June 2012—June 2013

Note: the price of soya fell by about TSh 200 over that period

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International and Non-Governmental Organizations To date, the international donor community has shown little interest in promoting soybeans as a food in Tanzania. The outstanding exceptions to this have been the World Food Programme (WFP) and Save the Children, which have both used soya in their feeding programmes. (It is worth noting that the purchase of locally sourced soya seems to have stopped in September 2013, and products — when needed — are now obtained from neighbouring countries.) Another exception is CRS which is implementing the four-year ‘Soya ni Pesa’ Project with a US$ 10.5 million grant from USDA. The project supports smallholders in the Southern Highlands, particularly in the regions of Ruvuma and Njombe (where CRS is based). The project provides training in various aspects of group organization and soybean production (see Annex 7). The technical emphasis is on the quality control of seeds, 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 soybean seed (based on germination percentage and health) and to assist in the regular sampling and testing of community-bulked seed. The Project and N2Africa intend to design and promote improved soybean intercropping with a special focus on spacing and rotation, and will support the availability of the required inputs, particularly blended fertilizers and inoculants. Unfortunately Year 1 of the project was a virtual failure with regard to field operations (as a result of the poor germination of seeds and less than optimal growing conditions for soya) leaving only three years remaining to implement the technical aspects of the project. Under its ‘Feed the Future’ programme, USAID is implementing the ‘Tuboreshe Chakula’ 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 one-gram packets for home use. Tuboreshe Chakula 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 will run for four years but — most unfortunately — has no plans to promote soya as a food additive. Several international agribusiness conglomerates and investment groups are investing or seeking to invest in soya production both with large-scale farmers. These initiatives aim to link large growers to smallholders in outgrower schemes. In August 2012, the President of Tanzania visited Brazil, a major soya-producing country. As a result of this trip, seven Brazilian companies (with interests in soybeans, sugar cane, maize and cotton cultivation) expressed an interest in investing in the agricultural sector in Tanzania. Between them, they sent 11 representatives to Tanzania to investigate the investment potential in agriculture. The Executive Director of the Tanzania Investment Centre (TIC) provided the representatives with information on investment opportunities in SAGCOT and in the Government’s ‘kilimo kwanza’ activities. They were also enlightened on the other benefits and incentives that could be derived from investing in the country. Agricultural investment by countries like Brazil will help to create a strong base of tax-payers and develop the agricultural sector in the country by introducing new technologies and new forms of collaboration with local farmers. Soybeans are considered by MAFC to provide (unspecified) opportunities for investment.

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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 apply the latter to the former. If this can be achieved the vision could be:

5.2 Strategic Issues Synthesis

Existing policies, strategies and programmes A series of components and activities are being developed for TSDS (see Table 11). These are based on the main policy, strategy and programme activities organized and put in place by the Government (Table 12). Table 11: Components and activities of Tanzania Soybean Development Strategy

Component Subcomponents

Governing and implementing institutions Formation of special institutions at national, regional, district and ward levels; formation of Tanzania Soybean Association to unify producers.

Soybean subsector policy and regulation

Solve constitutional and regulatory constraints; formulate policies to stimulate soybean 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 and export market promotion.

International cooperation International Soybean Association; South-South cooperation; international development agencies.

Source: adapted from MAFC 2010

By 2025, a more efficient and sustainable soybean chain supplying raw materials for the fortification of human food, and a high quality protein for use in animal feeds. The chain will also boost employment, increase incomes, reduce poverty, improve food security and provide a better quality of life for all Tanzanians.

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Table 12: Existing policies, strategies and programmes of relevance to the soybean value chain

Policy/Strategy/Programme Launch

year Objectives/areas of intervention

Tanzania Development Vision 2025 (TDV) See: www.tanzania.go.tz/vision.htm

In progress

The Tanzania of 2025 should be a nation imbued with five main attributes: high quality livelihoods; peace, stability and unity; good governance, a well-educated and learning society; and a competitive economy capable of producing sustainable growth and shared benefits. Among others, the vision aims at developing a diversified and semi-industrialized economy with a substantial industrial sector, macroeconomic stability, a growth 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 current adverse trends in the loss and degradation of environmental resources (such as forests, fisheries, fresh water, climate, soils, biodiversity) and in the accumulation of hazardous substances.

National Strategy for Growth and Reduction of Poverty II (NSGRP II or MKUKUTA, from its Swahili acronym) See: www.tz.undp.org/docs/mkukutalldraft.pdf

2005

Builds on four key fundamentals: (i) efficiently using and developing the factors of production, including human capital/resources; (ii) strengthening and establishing well-functioning institutions and markets; (iii) providing infrastructure; and (iv) ensuring good economic governance. Build also on four strategic areas: (i) providing targeted subsidies to select food crops, identifying and promoting modern farm technologies and providing support for increased utilization of improved technologies for crop and livestock production; (ii) identifying research activities and promoting food storage technologies/facilities and enhancing agro-processing as well as environmentally friendly technologies and practices especially for rural areas; (iii) improving road network 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)

Aims to accelerate agricultural transformation through fostering the modernization and commercialization of agriculture, mainstreaming Government planning processes, allocating sufficient resources, mobilizing increased investments, and mobilizing the private sector.

Agricultural Sector Development Strategy (ASDS)

2001

Aims to create an enabling environment for improving agricultural productivity and profitability, improving farm incomes, thereby contributing to reducing rural poverty and ensuring household food security. It focuses on productive and gainful agriculture: subsistence agriculture must become profitable smallholder agriculture, and the spotlight must switch from public institutions to farmers and agribusinesses.

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Policy/Strategy/Programme Launch

year Objectives/areas of intervention

Agricultural Sector Development Program (ASDP)

??

Provides the government with a sector-wide framework for overseeing the institutional, expenditure and investment development of the agricultural sector. Aims at enabling farmers to have better access to — and use of— agricultural knowledge, technologies, and market infrastructure all of which contribute to increased productivity, profitability and income thereby enhancing food security. At a district level these interventions are implemented through District Agricultural Development Plans (DADPs) based on target communities and district development priorities. The ASDP, among others, promotes more control of resources by beneficiaries, pluralism in service provision, and resource transfer based on the evaluation of its efficiency.

Integrated Industrial Development Strategy (IIDS 2025)

??

Provides guidance in the implementation of the Sustainable Industrial Development Policy (SIDP) 2020 objectives under the newly prevailing economic environment and to realize the targets stipulated by TDV 2025. Aims to build up internationally competitive business environments and promote enterprises to make the industrial sector an engine of the economic growth. It particularly also promotes agricultural development-led industrialization to support successful implementation of Kilimo Kwanza and equitable growth of the regions.

Agricultural Marketing Strategy ??

Contributes towards the attainment of TDV 2025, NSGRP, Kilimo Kwanza and the Millennium Development Goals (MDGs). The strategy aims to promote a competitive, efficient and equitable agricultural marketing system, including supporting the availability of international accredited laboratories and testing equipments for the introduction and monitoring of appropriate quality standards.

Rural Micro, Small and Medium Enterprise Programme

??

Supports agricultural and agro-industrial development in six target regions (the Coast, Tanga, Manyara, Mwanza, Iringa and Ruvuma). One important contribution of the programme is the provision of information to poor rural entrepreneurs in value chain coordination.

The Southern Agriculture Growth Corridor of Tanzania (SAGCOT)

Not yet launched

Aims at attracting private investment into agriculture in ways that are socially and environmentally responsible. Addresses constraints related to uncertain policy environments, the development of private and public partnerships and availability of affordable and long-term finance. Investments are promoted along the trade routes which link Tanzania to Zambia (serving, within Tanzania, the Coast, Morogoro, Iringa, Rukwa and Mbeya regions). Focuses on discrete geographical areas (‘clusters’) within the corridor where there are opportunities to establish a critical mass of profitable small and large operators.

Source: 3ADI, 2011

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SWOT analysis Strengths Weakness

Near organic production makes Tanzanian soya suitable for niche markets;

Can provide a cheap local high-quality protein (40-45 percent);

Soya oil (23 percent) in strong demand worldwide;

Very suitable as a 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 for animal feeds, especially poultry.

Value chain weakly developed and fragmented;

Few producer or processor organizations;

The crop is 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 a lack of quality seeds.

Opportunities Threats

Organization of segments (or indeed the whole value chain) into groups/associations to strengthen and empower;

Rapidly rising internal demand (as a result of awareness of health benefits, increased individual consumption and population growth);

Young population (promises more consumption in future);

Adding value to basic products through differentiation;

Potential important source and 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 an unstable; macroeconomic environment (in terms of exchange rates and inflation);

Climate change may affect some aspects of production;

Imports have a negative effect on local value added processing;

Inadequacy of the crop board (no identifiable benefits as yet to producers or processors);

Competition from large overseas producers;

Lack of government support.

5.3 Value Chain Competitiveness Strategy

Strategic interventions would improve the competitiveness of the value chain. These include:

improving knowledge, skills and information throughout — and before — the chain (e.g. agriculture in schools, producer training, business training etc.);

promoting and strengthening groups and associations from primary producers through to retailers 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 to generate employment;

developing, deploying and retaining equitable human resources especially in research and extension services;

promoting and adopting science and technology including research and development for high quality palatable and nutritious food;

strengthening and introducing investments in infrastructure (including for farms and SME agroprocessing;

collecting, collating and disseminating transparent market information including volumes of trade and prices;

promoting fair and competitive farmgate prices;

strengthening the links between farmers and markets, and (higher up the chain) between domestic, regional and global markets;

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promoting private sector investment and encouraging 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 (as well as 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);

promoting measures to cushion producers from the effects of drought and strengthen 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 H 1V/AIDS to support increased production.

5.4 Proposed Strategy Components

The Tanzania soybean industry has the potential to generate considerable economic output, contribute to better livelihoods and improve 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 natural feed resources;

public, private and public/private sector investment and financing;

improvement of the productivity and efficiency of production, marketing and processing;

rendering support services more effective (e.g. through 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.

Sustainable use of land, water and other natural resources ‘Conventional wisdom’ holds that there is ample land in Tanzania to meet the nation’s food production needs. This truism ignores the fact that in the 50 years since Independence, the human population has quadrupled leading to a proliferation of urban areas, and a great expansion in the cultivation of both food and cash crops. The gazetting of large areas of the country as national parks or game reserves has also, inevitably, reduced the availability of land for agriculture. The Government has partially recognized this situation through the enactment of key legislation (e.g. the Land Act No 4 of 1999, the Village Land Act No 5 of 1999, the Land Use Planning Act No 7 of 2007, the Grazing Land and Animal Feed Resources Act No 13 of 2010). Development and management plans are, however, required for sustainable resource ownership and use; these are important as they offer opportunities for investment in infrastructure and improvements in production and productivity.

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There are challenges confronting the use of lands for sustainable production. These include the need to further development a National Land Use Plan, which will entail demarcating land for particular uses, providing title and ownership of land for producers, preparing land management plans, improving feeding and water facilities for livestock, creating awareness in producers of the current situation, and promoting investment in crop production. ‘Water is life’ is a commonly seen banner on roadsides throughout Tanzania, and water does indeed determine to a great extent the achievable level of production in the country. Challenges in water supply include the need to: build the capacity of suppliers and users as well as harvesting techniques, promote investment in the construction of water infrastructure and form water users’ associations.

Public and private sector investment and financing Investment in agriculture in Tanzania has generally been low in relation to the sector’s contribution to the economy, food security and human welfare. Private investors, with few (and not very encouraging) exceptions, have also been reluctant to invest in in agriculture in spite of ‘kilimo kwanza’ and other 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; such institutions generally seem to have little knowledge of the industry and are therefore reluctant to invest in it. Successful investments require a thorough investigation before any commitment is made. Capacity needs to be built in terms of the proper preparation of projects, investment in infrastructure and 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. Source: Tanzania Investment Centre

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: o Refunds of duty charged on (i) imported inputs used for producing goods for export and

(ii) goods sold to foreign institutions (like the United Nations and its agencies in Tanzania).

Non-fiscal incentives

Immigration quota of up to 5 people

Guaranteed transfer of: o Net profits or dividends of the investment; o Payment in respect of foreign loans; o Remittance of proceeds net of all taxes and other obligations; o Royalties fees and other charges; o Payment of emolument and other benefits to foreign personnel.

Strategic Investor Status

Investors can ask for special incentives from the Government for big projects (>US$ 20 million) that offer specific or significant impact to society or the economy.

Import Duty Draw Back Scheme

Refunds of duty charged on (i) imported inputs used for producing goods for export and (ii) goods sold to foreign institutions (like the United Nations 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.

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Improved efficiency in production, marketing and processing The production and productivity of soybeans in the country can be improved inter alia by improving genetic resources (varieties), commercializing the chain, increased processing capacities, and improving marketing efficiency. In 2013 soybeans are almost exclusively produced for the domestic market but there is great potential for export. The key 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 soybean 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 who are already processing soybeans for human food, and especially to fortify diet staples. This community need support, training and assistance in key areas including for the development of harmonized fortification and food safety standards and quality control, for internal and cross border issues, for manufacturing and supply chains, and 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 current SIDO activities).

Support services (research, extension, training and dissemination of information) Various institutions provide support services including the Government, parastatals, NGOs, CBOs and the private sector. Agricultural research aims to develop technologies that address the problems affecting the industry in order to improve production and productivity and allow the industry to contribute to the nation’s economy and livelihoods. Strategic research interventions for the improvement of crop production follow a commodity value chain approach, but there has been minimal research to date on soybeans. The sustainability of research has been a major bottleneck to the development of appropriate technologies for improving soybeans. Challenges in soybean research include improving research infrastructure, human capacity, private sector participation and coordination between research collaborators. Extension services should help to transfer knowledge and skills to farmers as well as share information and experiences between stakeholders in order to increase production and productivity. Currently, however, extension services are only nominally provided by the public sector (the private sector is increasingly delivering services). The main challenges facing extension delivery include increasing the number of extension staff, improving the knowledge and skills of stakeholders, strengthening research/training/extension/farmer linkages, strengthening collaboration between service providers, and strengthening the participation of the private sector in delivery and delivery infrastructure.

Capacity building and empowerment all along the chain The institutional and financial empowerment of participants all along the value chain will include 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 a local level, and umbrella organizations at a higher level.

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In all associations, the adequate representation of women and of minority groups should be assured. NGOs and FBOs can help establish and support the new bodies. Assistance for — and training in — technical matters should be promoted, and business and accounting skills provided; officers of associations should also receive assistance in management training, interpersonal skills and human relationships. Technical and professional staff from the central ministry and its 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 the definition provided by the UK Royal College of Veterinary Surgeons (RCVS) probably best serves the needs of SHFS, defining it as: “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 (for example, through facilitated access to open and Creative Commons-licensed learning materials). The government and other bodies should also be assisted to provide value chain participants with information — on markets, disease, feed resources etc. — via radio and television broadcasts. The existing commercial farming relationships (using subcontracted outgrowers) should be encouraged and supported, and a strategy developed to promote their improvement and expansion. In these relationships, services such as extension, finance and storage should be provided on an embedded or fee-based system. SAGCOT’s proposed catalyst fund should be a suitable vehicle for financing, as should the Agricultural Window of the Tanzania Investment Bank (TIB) which is intended to provide soft loans.

Chain governance, regulatory and institutional arrangements Governance of the value chain needs to be considerably improved. There needs to be transparency at all levels and more direct involvement from producers and processors. Essentially, governance should be a private sector matter, with the public sector providing support through regulatory activities. The regulatory environment is in need of thorough review and revision; it also needs to be redesigned to assist the soybean chain to operate more efficiently. Public institutions involved in the chain should be supported with adequate funding to perform their activities.

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 overseer of these activities and provide coordination between the various ministries and other institutions that impinge on the sector.

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ANNEXES

Annex 1. Stakeholders met

FAO Resident Representative

Joan Kimirei: National Consultant, SHFSP, FAO. E: Joan.kimirei@fao.org. T: 0767 250 895/0688 078 481.

Ferdinand Mgaya: National Consultant, SHFSP, FAO. T: 0767 100 537/0764 933 665.

Rita Singh: Director, Global Food Security & Development Partnerships, Monsanto Company Corporate Affairs, 800 North Lindbergh Boulevard, A2N, St Louis, Missouri 63167, USA. E: rita.singh@monsanto.com. T: +1 314 694 3535, +1 314 694 3535.

Beatus Malema: Acting Director, Crop Development Department/Assistant Director, Crop Promotion Service, MAFC. E: cps@kilimo.gv.tz. T: 0754 608 806

Carter Coleman: Chief Executive Officer, Kilombero Plantations Ltd, Kilombero Plantations Ltd, 158 Msasani Road, Dar es Salaam. E: carter.coleman@agrica.com. T: 0784 154 617, +255 22 260 0036.

Ruth Junkin: Head of Programs, Catholic Relief Services, Plot No 144, Migombani Street, Regent Estate, Mikocheni, PO Box 34701, Dar es Salaam. E: Ruth.junkin@crs.org. T:0767 840 156, + 255 22 277 3 141/4273.

Amsalu Gebreselassie: Soya ni Pesa Project Director, Head of Programs, Catholic Relief Services, Plot No 144, Migombani Street, Regent Estate, Mikocheni, PO Box 34701, Dar es Salaam. E: Amsalu.gebreselassie@crs.org. T: 0762 748 311, + 255 22 277 3141/4273.

Anna J H Temu: Managing Director, Power Flour Ltd, Kawe, Old Bagamoyo Road, PO Box 23437, Dar es Salaam. E: Power4foods@yahoo.com. T: 0754 274 129, +255 22 240 1442.

Emmanuel John: Quality Control Officer, Power Flour Ltd, Kawe, Old Bagamoyo Road, PO Box 23437, Dar es Salaam. E: John.emmanuel186@yahoo.co.uk. T: 0757 940 724, +255 22 240 1442.

Jeffrey Lewis: Managing Director, Korongo Ltd, Dar es Salaam. E: Jlewiskorongo.com.

Anwar Shrijee: Manager, Shrijee Supermarket, Oyster Bay, Dar es Salaam.

David Micklem: Managing Director, Interchick/Tanbreed Poultry Limited, PO Box 1378, Morogoro. E: Dmicklem@tanbreed.com. T: 0782 161 506.

Hillary Shoo: Managing Director, Hill Packaging/Saliba Pellet Co Ltd/Hill Animal Feeds, PO Box 11815, Hill Industries Complex, Mapinga, Bagamaoyo. E: Hillary@hillgroup.co.tz hillpackaging@gmail.com. T: 0784 617 565/0732 921 249.

Raphael S Ndelwa: Managing Director, Raphael Group Ltd, PO Box 1510, Uyole Area Junction Mal-Zambia Highway, Mbeya. T: 0784 409 340/0767 409 340/0715 409 340

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Peter D Megulah: Production Manager, Raphael Group Ltd, PO Box 1510, Uyole Area Junction Mal-Zambia Highway, Mbeya. T: 0735 767 187/0782 767 187/0655 767 187.

Benjamin E G Kiwovele: Acting Zonal Research Coordinator, Southern Highlands Zone, Agricultural Research Institute - Uyole, PO Box 400, Mbeya. T: 0784 586 613/0767 585 613.

Catherine S Madata: Research Officer (Legumes), Southern Highlands Zone, Agricultural Research Institute - Uyole, POBox 400, Mbeya. T: 0754 553 266.

Robert Andachuka: Owner, Andachuka Rice Mill, Rujewa, Mabarali.

Mafuta Mualakas: Manager, Andachuka Rice Mill, Rujewa, Mabarali.

Seki Kiwanga: Rice Trader, Usangu Plains, Rujewa, Mba rau.

Sala Israel: Rice Trader, Usangu Plains, Rujewa, Mbarali.

Lenni Kasoga: Rice Trader, Usangu Plains, Rujewa, Mbarali.

Father Nestor Mtevwe: NDO/CARITAS Director, Roman Catholic Diocese of Njombe, PO Box 54, Njombe. E: Nestor.mtweve@gmail.com. T: 0755 219 750/0713 813 241.

Callistu Nyilawila: CARITAS (Catholic Relief Services) Coordinator, Roman Catholic Diocese of Njombe. E: carlymebb@yahoo.co.uk. T: 0767 810 153.

Serapia Mhanje: CARITAS (Catholic Relief Services) Accountant, Roman Catholic Diocese of Njombe. E: sj.mhanje@gmail.com. T: 0755 754 076.

Steve Steenkamp: Director, Silverlands Tanzania Limited, PO Box 908, Makota Farm, Iringa. E: Steve@adding-value.co.za. T: 0753 484 223.

Rick Ghaui: Partner, Jilanjo Ltd, Kisolanza. E: Rick@jilanjo.com. T: 0754 295 514.

Pascal Malisa: Manager, Sao Hill Agriculture. T: 0754 963 515.

Robin Ulyate: Partner, Rutuba Ltd, lringa. E: rutuba@iwayafrica.com. T: 0755 400 960.

Otto Ulyate: Partner, Rutuba Ltd, lringa. E: rutuba@iwayafrica.com. T: 0784 262 457.

Janet Ulyate: Prtner, Rutuba Ltd, lringa. E: rutuba@iwayafrica.com.

Tumpe Mwakuka: Small rice trader, Sao Hill.

Rosie Kabonga: Small rice trader, Sao Hill.

Peter Masonga: Manager, Haneze Enterprises (Rice Milling), Sao Hill. T: 0764 792 260

Francesca Tonga: small rice trader, Sao Hill.

Rajan Marwaha: Chief Executive Officer, Kiboko Animal Feed and Millers, PO Box 333, Iringa. E: Ceo@kiboko.biz. T: 0783 767 767/0754 767 767.

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Martin Mwingi: Small-scale rice traders, Pawaga-Iringa.

Samwuel Nyuba: Medium-scale rice trader, Iringa-Dar es Salaam

Yusuf A Ng’amitu: Secretary, Umoja wa Kilimo cha Umwagiliati Luganga Pawaga (UKULUPA)

Zawasi Msigwa: Committee Member, UKU LUPA.

Adela Mpulubu: Committee Member, UKULUPA.

Four other Committee Members, UKULUPA.

Fred Kalolo: Rice retailer, Iringa

Ali Saidi Mtaki: Rice dealer (mill > urban semi-wholesaler).

Aly M Khaldi: Revenue collector (produce cess), Iringa Municipality

Gyan Patak: Assistant Financial Controller, Jamahedo Health Foods Company Ltd, P 0 Box 11740, Themi Industrial Area, Niro, Arusha, E: Gyanpathak1984@yahoo.com. T: 0782 748 960.

Mary Yohanna: Production Manager, Jamhedo Health Foods Company Ltd, P 0 Box 11740, Themi Industrial Area, Njiro, Arusha.

Arvind Mittal: Chief Executive Officer, Mount Meru Group Ltd, PO Box 7094, Arusha. E: Arvind@mtmerugroup.com. T: 0784 400 440.

Atul Mittal: Group Executive Director, Mount Meru Group Ltd, PO Box 7094, Arusha. E: Atul@mtmerugroup.com. T: 0784 400 400.

Victor Mittal: Executive Assistant, Mount Meru Group Ltd, PO Box 7094, Arusha. E: Victor@mtmerugroup.com.

Simon Kuria: Production Manager, Mount Meru Group Ltd, PO Box 7094, Arusha. E: Simonl@mtmerugroup.com. T: 0718 912 226.

Ester Daniel Nassary: Director, Joshua Products, PO Box 1039, Sekei Area, Arusha. E: ejdjoshua@yahoo.com. T: 715 494 527/0754 015 011/0754 494 527.

Sara William Kassy: Owner, Afri-Youth Pride/Halisi, PO Box 714, Njiro, Viwanja vya Nane-Nane, Arusha. E: lnfo@halisi.com; afripridetza@yahoo.com. T: 0754 300 748/0784 300 748.

Bob Shuma: Managing Director, Tanzania Seed Traders Association, PO Box 15216, Haue Selassie Road, Arusha. E: tasta02@hotmail.com. T: 027 254 8054.

Juma S Dikwe: Chairman, Tandale Market Grain Sellers Association and Investment (TAMAGASI), PO Box 67548, Tandale Sokoni, Kinondoni, Dar es Salaam. E: Tamagrasai@yahoo.co.uk. T: 0787 489 638.

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Nassoro Rashidi Madufu: Economist, Tandale Market Grain Sellers Association and Investment (TAMAGASI), PO Box 67548, Tandale Sokoni, Kinondoni, Dar es Salaam. E: Tamagrasai@yahoo.co.uk. T: 0787 077 847.

Mohammed Hamisi: Partner, Tandale Store, Tandale Sokoni (soya and other grain dealers).

Camillius Mwema: Employee, Mumgrema Store, Tandale Sokoni (soya and other grain dealers).

Abdul Kabeke: Shopkeeper, Rice and other dry goods store, Tandale Sokoni.

Mwendai Mbukuzi: Tatibu was Soko (Market Chairman), Tandale Market Committee.

Tony S Lovell: Advisor, CP Thailand (by e-mail), E: tonyslovellyahoo.com.

Kaleb Kabezi: Director, Kalmon Enterprises, Dar es Salaam.

Monica Kabezi: Director, Kalmon Enterprises, Dar es Salaam. T: 0713 254 942.

Victor Manyong: Director — Eastern Africa Hub, International Institute for Tropical Africa, P0 Box 34441, Plot No 25 Mwenge Coca Cola Road, Mikocheni, Dar es Salaam. E: V.manyong@cgiar.org. T: 0754 785 125.

Harun Muthuri Murithi: Associate Professional Officer (Plant Pathology), Eastern Africa Hub, International Institute for Tropical Africa, PO Box 34441, Plot No 25 Mwenge Coca Cola Road, Mikocheni, Dar es Salaam. E: H.murithi@cgiar.org. T: 0776 000 704.

Joel Strauss: M&E Unit, Tuboreshe Chakula Project, PO Box 105936, Plot 14 Mkwama Road, Oyster Bay, Dar es Salaam. E: Joel_Strauss@tubocha.com. T: 0754 623 522/0786 623 522.

Peter MacSporran: Director, Commercial Agriculture, 74 Independence Avenue, Lusaka, Zambia. E: Pmacsporran@agdevco.com, T: 0260 (0)966 860 538.

John Anthoni: Owner, Retail rice selling business, Tanga. T: 0784 141 001.

Muhidini Juma: Owner, Retail rice selling business, Tanga. T: 0657 512 580.

Fatima Abdalla: Owner, Smart Supermarket, Tanga

William Jonas: Owner, Retail rice selling business, Tanga. T: 0764 214 561.

Devika Patel: Owner, Delhi Supermarket, Tanga. T: 0713 345 729.

Petros Kamili: Owner, Retail rice selling business, Tanga. T: 0776 536 427.

Rebecca Savoie: Country Director, Technoserve, PO Box 78374, Coco Plaza, 254 Touré Drive, Oyster Bay, Dar es Salaam. E: Rsavoie@tns.org. T: 0689 121 558.

F P Lekule: Managing Director, International Tanfeeds Ltd, Morogoro 1/ Professor of Animal Production, Faculty of Agriculture, Sokoine University of Agriculture. E: lekule@yahoo.com; tanfeeds@yahoo.com. T: 0754 690 023/0715 690 023.

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Emmanuel Alfons: Accountant, International Tanfeeds Ltd, Morogoro. Tanfeeds@yahoo. Com. T: 0659 962 627.

Philemon M Kawamala: Marketing and Distribution Manager (Acting CEO): Agricultural Seed Agency, PO Box 364, Plot No 50, Magodoro Street, Morogoro. E: Philemon.kawamala@ada.or.tz; pmkawamala@yahoo.co.uk. T:0713 220 763.

Amari Abdallah Ndaija: Owner, Sido Rice illing Machine, Morogoro.

Momedi Abdallah Ndaija: Owner, Sido Rice illing Machine, Morogoro.

Two other rice milling machines in Morogoro.

Sufian Z Kyarua: Technical Director, Falcon Animal Feeds Ltd, Dar es Salaam E: sufian.kyarua@yahoo.com. T: 0754 396 634/0655 396 634.

Nassor A Nassor: Administrative Manager, Falcon Animal Feeds Ltd., Dar es Salaam, E: baalwyl@gmail.com. T: 0777 439 823/0716 377 888.

Nadia Paschetta: Business Development Manager Smallholder Capacity Building and Agribusiness Development, Export Trading Group, PO Box 10295, 9th Floor, Harbour View Towers, Samora Avenue, Dar es Salaam. E: Nadia.paschetta@etgworld.com. T: 0785 831 857.

Kasi Giduturi: Head of Procurement, Export Trading Group, PO Box 10295, 9th Floor, Harbour View Towers, Sa mora Avenue, Dar es Salaam. E: Kasi.guduturi@etgworls.com. T: 0684 221 299.

Harko Bhargat: Chief Executive Officer, Bahari Bounty, PO Box 3978, 59 Mikocheni Light Industrial Area, Dar es Salaam. E: Bhagat@baharibounty.com. T: 0784 780 633.

Ramesh Chauhan: General Manager, Bahari Bounty, PO Box 3978, 59 Mikocheni Light Industrial Area, Dar es Salaam. E: Chauhan@baharibounty.com. T: 0787 900 692.

Mohamed Bahari: Director, Training and Extension Department, Ministry of Livestock and Fisheries Development, PO Box 9152, Temeke, Dar es Salaam.

P Z Njau: Assistant Director, TADC & ZIS, PO Box 9152, Temeke Veterinary, Temeke, Dar es Salaam. E: Pznjau@hotmail.com. T: 0754 263 013.

GuIam Dewji: Chairman, Mohammed Enterprises Tanzania Limited, PO Box 20660, 20th Floor, Golden Jubilee Towers, Ohio Street, Dar es Salaam. E: Gd@metl.net. T: 0754 600 000.

Mohamed Selim: Chairman, Umoja wa Wafanyabiashara wa Sokoni Ia Kisutu (UWASOKI), Kisutu Market, Dar es Salaam.T: 0713 802 806 (and rice and other dry goods retailer)

Irene Elias Samwueli: Dry goods retailer, Kisutu Market Dar es Salaam.

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The following people were met during the course of the Red Meat Study and/or the White Meat Study and have relevance to the Soya Bean Study:

Martin E Kimanya: Manager, Food Registration Department, Tanzania Foods and Drugs Authority. E: Mekimanya@yahoo.co.uk, martin.kimanya@tfda.or.tz;0744317 687.

Monsiapile Kajimbwa: Portfolio Coordinator, SNV Morogoro. E: Mkajimbwa@snvworld.org,T: 0786 341 368.

Silvanus Mruma. Advisor (Private Sector Development), SNV, Morogoro. Smruma@snvworld.org, 0755 744 327.

Salim Said: General Manager, Energy Milling Co Ltd., Sumbawanga. 0767 198 537.

Benjamin Mazigo: Manager, SME Lending and Leasing, Tanzania Investment Bank Ltd. bmazigo@tib.co.tz, 0784 543 066.

Joan Murusuri: Relationship Manager, Tanzania Investment Bank Ltd. jzmurusuri@tib.co.tz, 0784 505 444.

Adelitha Kibuga: Senior Officer, Agriculture Window Unit, Tanzania Investment Bank Ltd. akibuga@tib.co.tz, 0784 458 234.

Robert Pascal: Head Agribusiness, National Microfinance Bank. Robert.pascal@nmbtz.com. 0754 298 639.

Andrew K Karumuna: Barcode Executive, GS1 (TZ) National Limited. andrew@gsltz.org, 0685 620 116.

Judith E Sanga: Office Manager, GS1 (TZ) National Limited. dajudy@gs1tz.org, 0779 62116.

Said M Sood: Managing Director, Energy Millers and Animal Feeds, Morogoro Road, Kibaha. 0783 888 888

Gren J Moshi: Administrative Director (and co-owner), Twiga Feeds Limited. 0713 223 126/0767 223 127.

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Annex 2. Documents consulted

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Annex 3. Timelines — the rise and fall of a minor protein/oilseed crop, 1907-2013

Date Event Source Notes

1907 First cultivated in German East

Africa

Seed source unknown: this statement quoted ad nauseam but no original reference found

1909 Introductions from USA Greenway, 1945 Author worked at Amani at this time

1911 Further introductions from

China, Japan and South Africa Greenway, 1945

1912 Experiments at Amani on effects of nodulation and fertilization on

yields Eichenger, 1912

Eight varieties (7 Japan, 1 China) tested — probably those in Greenway 1945: two earlier papers from Biologisch Landwirt schaftlichen Institut Amani do not indicate presence in German East Africa

pre-1918

“Masasi and Nachingwea districts in Mtwara Region is one of the areas where soybean was

introduced in Tanzania during German colonial time.”

MAC 2010 No reference for this statement provided, and this information is not found anywhere else

1938 +

1939

64 cultivars brought to Amani from India, South Africa and USA,

and many American and Far Eastern cultivars via Rwanda

Auckland 1970

1939-1947

Reasonable production from Bukoba Region

Auckland 1970

1939-1947

British tried to grow soybean in the West Lake Region but efforts

were in vain and yields were terribly low due to poor varieties

Mmbaga 1975 Presumably refers to same time and areas as previous reference

1950 ‘Hernon 237’ introduced from

Rhodesia to replace ‘Dixie’ variety

Auckland 1970

Brought to Nachingwea by OFC (The Groundnut Scheme) which had 6000 acres under soya in 1963

1956-1963

Breeding and variety trials at Nachingwea

Auckland 1966, 1967, 1970

New adapted varieties included IH/192 (“Tanzania’s standard line”), 3 H/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%

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Date Event Source Notes

1958-1982

Agronomic and plant health studies

TAC 1958; DOA 1962; Robertson

1969; Uriyo 1974; Sachansky 1976,

1977; Chowdhury 1977;

Jana 1980; Ayiseni 1982; Chowdury and Dotto 1982; Pulver

et al 1982; Kang 1983

Nachingwea, Kilosa and elsewhere

1967 Most of Tanzania crop sold to Far

Eastern countries FAO 1967

1967

23 Tanzania soya varieties in comparative tests in Senegal;

some later distributed to other West African countries

Larcher 1980; Larcher and Volper

1988

1971

USAID and Tanzania Government US$ 14.9 million seed

multiplication project “to increase Tanzanian food

production”

Soybean Digest January 1971

Tanzania produces only 500 bushels but can produce 3 million bushels: needs 21 million bushels yearly to supply oil and protein needs: the balance to be imported

1972 Tanzania production 4000

tonnes in 1970 IRAT 1972

Increase from 3 000 tonnes in 1960-1964

1973 Government and UNICEF pilot

project in villages to produce full-fat soya flour

Holm et al, 1973

1974

“Results suggest that soya beans, with higher lysine content than

groundnuts, are a potential source of protein supplement to

cereal diets.”

Mtenga & Sugiyama, 1974

Soya has higher “protein score” than pigeon peas, kidney beans, cowpeas and groundnuts

1975

Soya flour used in porridge ratio of 1:3 with maize flour: breads of

10% soy and 90% wheat flour common especially in Morogoro region: porridge and soya milk

used extensively in school feeding programmes and widely

accepted

Mmbaga, 1975

1975

About 1800 acres sown in trials as intercrops for small farmers;

2000 acres sown in a peanut area: Japanese seeking rights to

grow soybeans for export to Japan

Freckman, 1975 Peanut area possibly refers to Nachingwea (in which case very out of date)

1975-1977

Soya beans tested in Tanzania as part of wide-scale international

variety testing.

Whigham & Judy, 1978; Judy &

Whigham, 1978; Judy & Hill, 1979

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Date Event Source Notes

1976

776 tonnes national production: in early 1960s enrichment of sembe (60% locally extracted

maize flour) and fortification of other staples with high protein

sources (soy and groundnut flour) advocated; preliminary

trials to feed maize-soy mixtures to adults and children in

educational institutions showed 5% soy could be added

undetected to ‘uji’ and ‘ugali’; systematic development by

Ministry of Agriculture in the late 1960s — maize and sorghum flour with up to 25% soy flour

acceptable in child-feeding trials; village soy processing project

using hand-operated processors to produce full fat flour, soy milk

and curd started and products incorporated into staples that

were very well accepted; project hampered because of heavy

labour input of hand operated equipment

Mosha, 1976

1976

EAIRO and USAID evaluating Brady Crop Cooker (Extruder)

with maize, soya, sorghum and sesame to produce weaning

foods, bread fortifiers, enriched flours and nutritious snacks with flavouring; foods well accepted

in East Africa

Acer, 1976

1977

750 ha soya on a parastatal and prison farm around Nachingwea,

plans to expand large scale mechanized production to 8 000 ha over 5 years and construct oil mill to process soybeans, sesame

and groundnuts; soybeans appear promising cash crop for

‘ujamaa’ villages

Brockman, 1977

Part of National Grain Legume Research Programme that became operational in 1974/1975

1978 Tanzania soya varieties tested in comparative trial for germination

quality in Puerto Rico Paschal & Ellis, 1978

1978

‘Lishe’ first tested (70% maize, 25% soya, 5% non-fat dry milk

(minerals and vitamins added at 2.7% and 0.1%)

Jansen & Harper 1979; Kepakepa

1979; Wilson 1979; Lucas 1981; Judson

and Jansen 1985

Earliest commercial soya product made in Tanzania: 572 tonnes in 1978

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Date Event Source Notes

1980 Soya uses in food crops research

programme by IITA IITA, 1981

1981 Unsuccessful soya trials by

Tanganyika Wattle Co Ltd west of Njombe

Anecdotal evidence

1985

Tanzania variety ‘Hernon 237 ‘one of only 10 out of 400

worldwide varieties shown to be promiscuous in nodulation

Pulver et al, 1985 Promiscuous here means able to make use of rhizobia from other species

198? Soya processing project initiated

in Njombe Fuguitt 1988, 1991

1997-2000

Seeds of four soya lines given to National Research Institutes by AVRDC for further evaluation

and future release

Chadha & Oluoch, 2001

2012 The ‘Soya ni Pesa’ project is initiated by CRS with USDA

funding

CRS, Dar es Salaam: personal

communication

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Annex 4. Items containing soya or soya product imported into Tanzania

Is soya bad or good?

Extract 1: From the anti-soya website ‘Subtract Soy Now’:

soy is one of the top eight allergens;

food manufacturers put soy in more than 60% of processed foods;

soy is in nearly 75% of products on supermarket shelves;

soy is in nearly 100% of fast food;

Genetically modified (GM) soy is grown on 91% of US soybean fields. Extract 2: From the pro-soya website: Fishman, Harvey M. 2002: “soybean oil has a range of uses in cosmetics.”(See: www.thefreelibrary.com/soybean oil has a range of uses in cosmetics.) “Soybean oil, also called soya bean oil and soy oil, is used in many industries, including soap making, food, paints and varnishes, inks, adhesives and, of course, cosmetics.” Soy Has Many Cosmetic Uses:

Derivative Function;

Soyamineemulsifier;

Soy amino acids skin and hair conditioner;

Soybean protein botanical anti-aging;

Soybean sterolabsorption base;

Hydrolyzed soy protein skin and hair conditioner;

Soybean oil emollient, moisturizer;

Soya fatty acids emollient, emulsifier.

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Creamy wheat, Worcestershire sauce and mayonnaise (bottom left) from the USA (presumably utilizing American soya beans); an international brand of mayonnaise imported from the Sultanate of Oman (bottom right)

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Margarine containing soya lecithin from Dubai (above); a well-known brand of low and medium fat spread from Kenya (right) (provenance of soya products are not stated on the labels and therefore unknown); whole beans (below) from Dubai (or Kenya).

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Peanut butter from the USA, with added vitamins and omega-3 oils (presumably using soya from the USA).

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Baby food from South Africa and family porridge from Kenya (below): the provenance of beans is presumably from the respective countries.

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Above: Varieties of soya milks and soya drinks including Sunrise (produced in Germany with European soya beans for a UK company); Alpro soya (produced for a British company in the UK with European grown soya); Soyfresh produced in Malaysia with beans of an unknown origin. Right: varieties of soya drink produced in Germany with European soya beans for a UK company.

Chocolate-flavoured soya milk with added vitamins (made in Thailand with beans of unknown provenance)

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A selection of soy sauces from China, Japan, the Philippines, Thailand, Malaysia and Singapore on supermarket shelves in Dar es Salaam (top left). The ubiquitous American Garden and its soy sauce using beans from the USA (bottom); Teriyaki marinade and sauce from Japan (right).

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Granola bars (top) and peanut bars (bottom) containing soya flour and soya lecithin from the USA (presumably with American soya).

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Chocolate fudge containing < 2 per cent soya lecithin from the USA, and soya (presumably also from the USA).

Toblerone (Switzerland), Bounty bars (USA) and assorted chocolates (below, possibly from the UK) all containing soya or soya products of various provenance and for sale in the Duty Free Shop at Dar es Salaam’s International Airport.

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Above: Soya snacks and an energy drink from Malawi (utilizing Malawi soya); soya chunks from Kenya (probably also using Kenyan soya beans).

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‘Vital’ cosmetic cream promoting the benefits of soy (manufactured in Poland for a British-based company).

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Power flour publicity shots and range of products.

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Ilatanga Supplies (left): whole beans from Songea cleaned and repacked from bulk, on sale at Shoppers Supermarket, Dar es Salaam. Below left and below left: whole soya beans and decorticated split (kibbled) beans at Tandale Store, Dar es Salaam (beans from Songea).

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Ulezi finger millet mix (rice, maize, finger millet, groundnuts and soya beans), produced by Sohle Grain Mill, Dar es Salaam on sale in a small supermarket in Tanga; Mama Norah fortified flour (millet, maize, groundnut, rice, soya) on sale in Tom’s Supermarket, Mbezi, Dar es Salaam (both using Tanzanian soya beans).

Nutritious flours from Matebe Group (Dar es Salaam), and CRM Investment Limited, both on sale at Tom’s Supermarket, Mbezi (soya beans of local provenance). Fortified flour (finger millet, wheat, maize, soya protein, vitamins, essential minerals) from Soy General Traders, Dar es Salaam (using beans of local provenance).

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Fortified flour from Besa Foods, Dar es Salaam “good for children, old people, the sick, mothers, the overweight, school-children and indeed everybody” (containing finger millet, groundnuts, soya, rice, decorticated maize and wheat): no bar code.

Unga bora wa lishe from J.J. Enterprises on sale at the Kisutu market, Dar es Salaam (containing finger millet, groundnut, sorghum, wheat, rice, millet, maize and roasted soya): no bar code.

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Soya drink and soya-ginger drink powder produced by AFCO Investment, Dar es Salaam (probably from Tanzania soya beans): no bar code.

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Fortified flour (above) from Jamahedu Health Foods, Arusha, containing millet, soya, maize, wheat, groundnuts, finger millet, vitamins and local soya. Coffee substitute drink (below) from Jamahedu Health Foods in Arusha (using local soybeans).

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Fortified mixed flour from Afro-Tech Shibe Products in Arusha containing finger millet, maize, rice, groundnuts, wheat, and local soya (above). Note the poor packaging and lack of bar code. Boiling, mixing, and packing technology at Afro-Youth Development Services in Arusha (below).

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Porridge flour (note the wrong spelling) in old packaging with an old name (left) and in new packing (made in China) with a new name (below), using soya beans grown in Babati.

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Packaging (printed in Nairobi) for Joshua’s fortified flour (top); the technology of pack sealing (middle); and a range of products manufactured by Joshua products in a house garage in Arusha with soybeans produced in Songea.

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Fortified baby foods from Roselyne Natural Foods, Moshi, using local soybeans (top): margarine manufactured by Vegetable Oil Industries Ltd, Mwanza, containing soya lecithin (the soya is almost certainly imported).

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Annex 5. Partial list of soya been processors and products in Tanzania

Location Company Contacts Products and notes

Dar es Salaam

Power Foods (Power Flour)

Power Flour Ltd, Kawe, Old Bagamoyo Road, PO Box 23437, Dar es Salaam: Power4foods@yahoo.com, 0754 274 129

Broad range of products including bread: see following illustrations

Kalm on Enterprises (Ilatanga Supplies)

Monica Kabezi: 0713 254 942

Essentially wholesaler supplying whole pre-packed beans to supermarkets

Tandale Store Tandale Sokoni Whole (bulk) soya beans and decorticated split beans

Shrijee’s Supermarket

Whole (repacked to 1 kg) soya beans

Shoppers Supermarket

PO Box 105383, Shoppers Plaza, Dar es Salaam: info@shoppers.co.tz, 022 270 1545

Whole (bulk) soya beans

Sohle Grain Mill PO Box 60435, Dar es Salaam: 0654 140 894

“Flour best for both elders and children, expectant and lactating mothers.” (Inc. rice, maize, finger millet, groundnuts and soya beans)

Mama Norah Enterprises

PO Box 95650, Dar es Salaam: 0713 610 510

Fortified mixed grain flour: but no longer processing soya, 3 September 2013

CRM Investments Ltd

0713 414 047

Nutritious flour (maize, millet, cassava, groundnuts, soya); main business sunflower oil; no bar code

Matabe Group Ltd PO Box 105496, Dar es Salaam: 0787 890 262

Bora nutritious flour (finger millet, maize, millet [sorghum?], rice, barley [wheat?], grain amaranth, rosella, soya beans, groundnuts) (English translation of ingredients is incorrect); no bar code

Ssoy General Traders

PO Box 32302, Dar es Salaam: sofisoya@yahoo.co.uk 0713 353 776

Uji mtamu (finger millet, wheat, maize, soya protein, vitamins, essential minerals)

Besa Food Supply flaviana_dimoso@yahoo.com, 0766 009 006

Lishe (unga) “good for children, old people, the sick, mothers, the overweight, schoolchildren and indeed everybody” (finger millet, groundnut, soya, rice, decorticated maize, wheat): no bar code

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Location Company Contacts Products and notes

Dar es Salaam

J. J. Enterprises Madibo, Dar es Salaam: 0713 484 294

Unga bora wa lishe (finger millet, groundnut, sorghum, wheat, rice, millet, maize, soya (roasted): no bar code but register with GS1 TZ

Jean’s Foods No information

Afco Investment

PO Box 7656, Dar es Salaam: afcoinvestment@gmail.com, 0755 691 390

Soy drink powder and soy-ginger drink powder: no bar code

Total of 58 small scale processors identified in 2005 in functional foods and nutraceuticals

Interchick

PO Box 1378, Morogoro: dmicklem@tanbreed.com, 0782 161 506

Soya meal (imported from Zambia during 2013) is progressively replacing ‘dagaa’ as the main protein source in the company’s own feeds produced for its own use

Hill Animal Feeds

PO Box 11815, Hill Industries Complex, Mapinga, Bagamaoyo: hillary@hillgroup.co.tz hillpackaging@gmail.com, 0784 617 565/0732 921 249

Soya meal (imported from Zambia and India I 2013) is progressively replacing ‘dagaa’ as the main protein source in the company’s own feeds produced for wholesale and retail sale

For other possible processors see list of Animal Feed Manufacturers in Annex 6

Arusha

Mount Meru Group

PO Box 7094, Arusha: atul@mtmerugroup.com, 0784 400 400

Not yet using in soya in Tanzania but large operation in Uganda (including contract farming) and exports soya meal to Tanzania (Mwanza)

Jamahedu Health Foods Co Ltd

PO Box 11740, Arusha: 027 250 9649

Fortified flour and soya-corn drink powder as non-caffeine substitute for coffee

Afrotech Shibe Products

PO Box 614, Arusha: 0752 076 720

Fortified flour: no bar code

Afri-Youth Development Services (Halisi)

PO Box 17, Arusha: afripridetz@yahoo.com, 0754 300 748

Lishe bora ya uji (fortified flour for porridge) (finger millet, maize, rice, groundnuts, wheat, soya); soya meal

Joshua Products

PO Box 10390, Arusha: ejdjoshua@yahoo.com, 0754 015 011

Fortified flour, soya drink, soya meal: no bar code (but in course of registration in September 2013)

Moshi Roselyn Natural Foods

PO Box 1103 Moshi: roselyntz@yahoo.com; 0784 787 846, 0773 983 535, 0787 787 846, 0715 787 846

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Location Company Contacts Products and notes

Morogoro International Tanfeeds Ltd

tanfeeds@yahoo.com, 0754 690 023/07 15

Soya oil and soya cake for animal feed

Iringa Kiboko Animal Feeds

PO Box 333 Iringa: rajan@kibok.biz, 0712 604 888

Not using soya in September 2013 but switching business emphasis to baking and plans to fortify bread and cakes in future

Njombe Matwembe Village Company

John Kamonga: 0754 578 658

Failed to turn up for arranged meeting

Mwanza Vegetabie Oil Industries Ltd

PO Box 211, 123 Nyerere Road, Mwanza

Soya lecithin in margarine

Bahari Bounty

PO Box 3968, Dar es Salaam: bhagat@baharibounty.com, 0784 780 633

Buys soya meal in Mwanza imported from Uganda by Mount Meru Millers for use in own mix feeds for poultry enterprise

Dodoma Ma-tabitha (Mama Lema Godson Chanel)

PO Box 10351984, Dodoma matabita@yahoo.com 0755 389 384

Nutritious flour (but not yet using soya in September 2013)

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Annex 6. Poultry feed manufacturing enterprises in Tanzania

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Annex 7. Some activities of the Soya ni Pesa project in the roman catholic diocese of Njombe

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Annex 8. International funding obtained by Tanfeeds of Morogoro

International Tanfeeds Ltd. is a private commercially-registered company based in Morogoro, Tanzania. Its Managing Director (the effective owner) is Professor of Animal Production at Sokoine University of Agriculture. Perhaps because of the background of its Managing Director, Tanfeeds produces a range of animal feeds that contain ingredients that are not commonly incorporated into animal feeds by other manufacturers in the country. The company is investing in the feed industry by introducing the latest technology to Tanzania. Innovations will include producing pelleted feed (not alone in the expansion plans of feed manufacturers in Tanzania but a new departure nonetheless) in addition to regular meal, and the use of soya expeller cake in feed rations (see Box 2 in main text for additional details). Tanfeeds has been successful in obtaining large amounts of funding either as grants or as loans from two international agencies. The United States African Development Foundation is an independent Federal agency established to support African-designed and African-driven solutions that address grassroots economic and social problems in conflict and post-conflict communities. USADF provides grants of up to US$ 250 000 directly to marginalized community groups and enterprises in Africa. These grants help organizations create and sustain jobs, improve income levels, and address social development needs. International Tanfeeds Ltd is the recipient of one such grant, Number 2045, amounting to US$ 246 146 with a start date of September 2009 and a finish date of September 2013. The funds are to be used to construct a processing factory, purchase a truck, establish a revolving loan fund and establish smallholder supply contracts. For fuller details of activities and budget see the following four pages of ‘Appendix A’ and the fifth of ‘Appendix A-1’. The Africa Enterprise Challenge Fund (AECF) provides grants and interest-free loans to businesses that wish to implement innovative, commercially-viable, high-impact projects in Africa. AECF is a US$ 205 million private sector fund that is backed by some of the biggest names in development finance and hosted by the Alliance for a Green Revolution in Africa (AGRA). Its aim is to encourage private sector companies to compete for investment support for new and innovative business ideas. The Fund is open to proposals from any country in the world as long as the project implementation will be in a specified county or countries in Africa. AGRA is an alliance jointly created in 2006 by the Rockefeller Foundation and the Bill & Melinda Gates Foundation aimed at improving agricultural productivity and the wellbeing of smallholder farmers throughout Sub-Saharan Africa. AGRA is registered as a non-profit entity in the United States but operates from Nairobi where it is registered as a branch of a foreign corporate entity. AECF is a special partnership initiative of AGRA that supports AGRA’s mission. The Board of AGRA provides the governance structure for AECF and is responsible to AECF’s donors. In practice, however, AECF operates as an independent fund reporting to its own Investment Committee which in turn reports to a Governing Council made up of its donor funders and ultimately AGRA’s Board. AECF is currently funded by the Australian Government Aid Program, Danish International Development Agency (DANIDA), the UK Department for International Development (DFID), the International Fund for Agricultural Development (IFAD), the Netherlands Ministry of Foreign Affairs (NMFA) and the Swedish International Development Cooperation Agency (SIDA). Others donors may join in the future. International Tanfeeds is benefiting from a total of US$ 900 000 in funds though AECF as a US$ 100 000 Repayable Grant (loan), US$ 200 000 Grant and US$ 600 000 in matching funds from BLGG. (BLGG Research from the Netherlands aims to contribute to sustainable agricultural production by developing systems for soil and crop quality assessment and recommendations).

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Support from the United States African Development Foundation

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Support from the Africa Enterprise Challenge Fund (AECF) AECF Funded Project: Integrating Livestock Feed Production with Poultry Breeding AECF Funding Window: Round 3 AECF Investment US$ 100,000 Repayable Grant US$ 200,000 Amount of Grant US$ 600,000 BLGG’s matching funds Total AECF Funding: USD$ 300,000 Project Duration: January 2012 - December 2017 Project Sector: Agri-Business Project description International Tanfeeds Ltd. is a private commercial registered company based in Morogoro, Tanzania that was established in 2008. Tanfeeds is investing in the feed industry by introducing the latest technology applicable in Europe and other developed countries to Tanzania. This will be achieved through a combination of pelleting feed and soya extrusion for inclusion in feed rations. The company will produce animal feed by adding value to crops and by-products and by converting them into valuable animal feed. The following raw materials will be purchased: cereals like maize, sorghum, sardines (fish meal), soya, and by-products like oilcakes, maize bran, rice bran, wheat by-products (wheat bran, pollard). These are combined with other purchased inputs like minerals, vitamins and synthetic amino acids to form a balanced diet for livestock after milling and mixing into required proportions depending on the type of animal before they are packed and sold. Extruded pellets are the norm in more advanced economies but would be a first in Tanzania where feeds are formulated as a meal. This will be achieved by:

Producing high quality animal feed and promoting efficient livestock production through pelleting technology and soya extrusion, which is a new technology in Tanzania.

Creating employment through the value chain to both contracted farmers and non-contracted farmers who supply crops and by-products to the company.

Establishing a framework for infrastructure of farmers’ access to markets for soya and poultry farmers along the value chain of animal feed industry.

The Project is suitable for AECF funding because Pellet feed would be a new technology, sure to be replicated. Progress to Date: The project has recently been funded and is yet to progress.