Price fluctuations impede progress of small farmers

Price fluctuations have made it impossible for peasant farmers to see the value of their effort.Smallholder farmers in low income countries are vulnerable to commodity price fluctuations that impact heavily on their expected earnings necessary to improve household income and fight abject poverty.

The segment of smallholder farmers in Tanzania, who are the dominant leaders in the sector as a whole, support average farm sizes of between 0.9 and three hectares, cultivating 5.1 million hectares annually, 85 per cent on which they grow food crops.

Apart from the falling labour and land productivity due to application of poor technology, dependence on unreliable and irregular weather conditions, prices have been playing key role in determining farmers’ earnings.

Currently, the private sector has absorbed much of the responsibility for the production and processing functions, but some greedy individuals misuse the opportunity by interfering the pricing process of farmers’ produce, affecting their earnings.

Middlemen competition syndrome is mentioned to have impacted negatively on farmers’ earnings through low prices that hardly reflect the real market value of the agro-products. According to Tanzania Exporters Association (TANEXA) Executive Director, Laurence Naluyaga, who was speaking at a consultative workshop for enhancing food security in Eastern Africa:

“Cooperative Societies and farmers unions in most regions were lacking powers to intervene on matters related to prices of agrocommodities thus making farmers earnings never reflect of the cost of production.”

He said the middlemen have established an artificial fencing in some regions with high food productivity to protect their interests and ensuring that there is no interference on the pricing already set to serve their profit making motives.

“Some business persons (middlemen) have been inflating prices for food commodities after learning that other traders are wishing to deal directly with farmers,” he said.

He cited a typical case of Singida region where greedy traders have been controlling and determining the prices for sunflower, offering farmers very little while denying other business persons to enter the market.

To ensure fair trade prevails for the benefits of both farmers and whole business community including local exporters, Mr Laurence called for an urgent need for the government to address the shortcomings for a win-win situation.

He said the government should further establish price strategy that could make farmers and exporters enjoy the benefits accrued from engagement on farming activities.

“Our food prices are high and continue to volatile because of lacking proper system to gather and dispatch information on the volume of production and the available markets in the country and across the region,” said Dr Michael Waithaka at the consultative workshop.

Dr Waithaka from the Association of Strengthening Agricultural Research in Eastern and Central Africa (ASARECA), called for the need for government interventions to ensure the smooth flow of agro products from production point to the markets.

He said the ASARECA will be providing necessary information on the availability of agro products, particularly food for the government to take informed decisions instead of banning exports. 

Similarly, export ban of food products has been highlighted as one of the major factors that led to increased consumer price and costs of doing business coupled by bribes, documentation and time loss at check points.

This was said by Mr Festo Maro from the Association of Strengthening Agricultural Research in Eastern and Central Africa (ASARECA), while presenting a paper on Food Price Analysis: Implication to Food Security in Tanzania.

Various studies done on export ban imposed by the government a couple of years ago on cereal crops have revealed that the practice discourages investors in the agriculture sector while at the same time increasing poverty.

He said a feasible policy option is to go away with export bans as markets will adjust for surplus and deficit areas. In his opening remarks, Dr Francis Mwaijande, the Principal Investigator at the Economic and Social Research Foundation (ESRF), said any policy measures ought to affect food price and trade like export ban has great implications on welfare of the people involved.

“Policy decisions that affect price and its relation to production behaviour in agriculture is very complex and to a large extent results into growth that is either inclusive or exclusive,” he said.

He said price is important income determinant for over 80 per cent of farming communities in the country and entire food chain economic agents. The project funded by the World Bank through the ASARECA and carried in five countries of Tanzania, Rwanda, Uganda, Ethiopia and Kenya is designed to adequately attain the overall goal to enhance food security in the region.

It started in February, this year and will be completed in December, 3013. The project will provide an in-depth analysis of price trends and transmission within the region in monthly and quarterly basis. 

“Project researchers in these countries then will enhance early warning and policy response mechanism to mitigate the consequences of food insecurity,” he added.

Dr Mwaijande said the project will add value to the government initiatives like the Comprehensive African Agriculture Development Programme (CAADP) and the Southern Agriculture Growth Corridor of Tanzania (SAGCOT).

ASARECA’s Manager, Policy Analysis & Advocacy Programme Dr Michael Waithaka said the organization is expected to provide forecasting of food prices to countries to make informed decision that will never affect farmers or markets.

ASARECA is a sub-regional not-for-profit association consisting of 10 member countries including Burundi, Democratic Republic of Congo (DRC), Eritrea, Ethiopia, Kenya, Madagascar, Rwanda, Sudan, Tanzania, and Uganda.

As a not for profit association, ASARECA aims to enhance regional collective action in agricultural research for development, extension and agricultural training and education to promote economic growth, fight poverty, eradicate hunger and enhance sustainable use of resources in the region.
Source: The Daily News,, reported by Sebastian Mrindoko in Dar es Salaam

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