Post-Harvest Innovations Project Policy Review Presented by Steven Semgalawe
Policy Review Objective The aim of the policy review is to develop and present a clear picture of how present policies and the dynamics associated with their formulation and implementation have or will have bearing on the post-harvest situation in Tanzania and the national post-harvest innovation system.
Approach and Methodology • Consultative meeting with Post-Harvest Innovations Project Officer • Desk review and analysis of various policy documents • Preparing and submitting a draft report to the Post-Harvest Innovation Project Officer.
Review of Relevant Documents • Various documents were reviewed. These included: • The Agricultural Policy • Agricultural Development Strategy • The Land Policy • The Cooperative Policy, Water Policy and Taxation Policy • Trade Policy • Local Government Reform Programme • The Tanzania Development Vision 2025 • Poverty Reduction Strategy Paper (PRSP) • Agriculture Sector Development Programme Framework Doc • Agricultural Extension Vision 2000
The Agricultural Policy • Agricultural policy provides the government decisions that influence the level and stability of food security and farm incomes • these decisions are aimed at influencing the output and input prices, public investments affecting agricultural revenue and costs, and allocation of research funds to improve farming such as in areas of development of post harvest technologies • The Policy seeks to ensure that the direction and pattern of development in the agricultural sector meets economic and social objectives and outputs.
The Agricultural Policy Cont… • The policy emphasizes on the importance of competitive markets, with the Government providing priority public goods and services and the conservation of the environment as a rational basis for agricultural development. • The focus of the policy is on how the Government deploys these services to support the private sector in promoting growth and commercialization in the sector.
The Agricultural Policy Objectives The policy objectives are: • To improve standards of living in the rural areas through increased income generation from agricultural production, processing and marketing; • To increase foreign exchange earnings for the nation by encouraging the production and increased exportation of cash crops
The Agricultural Policy Objectives Cont… • To produce and supply raw materials, including industrial crops while also expanding the role of the sector as a market for industrial outputs through the application of improved production, marketing and processing technology; • To develop and introduce new technology which increase the productivity of labour and land
The Agricultural Policy Objectives Cont… • To promote integrated and sustainable use and management of natural resources such as land, soil, water and vegetation to conserve the environment; • To develop human resources within the sector in order to increase the productivity of labour and to improve ability, awareness and morale; • To provide support services to the agriculture sector, which cannot be provided efficiently by the private sector.
Policy Statements Specific to Post-Harvest Interventions • The Government will encourage the formation of common interest groups (youth, women, retired officers, etc) to pull resources in order to establish and carry out agro-processing activities; • The Government will encourage the private sector, NGOs and other funding organizations to participate and support agro-processing activities by ensuring availability of necessary utilities and infrastructure;
Policy Statements Specific to Post-Harvest InterventionsCont… • The Ministry will emphasize on capacity building for both technical staff and community; • The Government will introduce and promote modern methods of agro-processing especially for roots, tubers, fruits and vegetables to add value and extend their shelf life; • The Government will ensure quality control and standards in processing, packaging and transportation of agricultural produce to ensure smooth handling;
Policy Statements Specific to Post-Harvest InterventionsCont… • The Government will facilitate availability of credit facilities involving private sector and NGOs; • The Government will strive to develop modalities to enhance competitiveness of locally processed agro-products; • The Government will encourage the production, importation and distribution of appropriate machinery and other facilities for agro-processing.
The Land Policy • The national land policy promotes and ensures a secure land tenure system and encourages optimal use of land resources. • It identifies three categories of land i.e. • Village /customary land; • Public/Gazette land (i.e. national parks, forest reserves) and • General land. General land is land that does not fall in the above two categories, this is the land available for private investors, that can be acquired for private enterprise development.
The Cooperative Policy • The Cooperative Policy provides the framework for the restructured co-operatives • to operate on an independent, voluntary and economically viable basis and • to develop centres for providing and disseminating agricultural inputs, implements, technologies and information.
Agricultural Policy Formulation Process • The Policy Unit in MAFS takes the lead in the formulation process by inviting the participation of all its technical departments to review respective policy statements
Agricultural Policy Formulation Process Cont… • Then the technical departments are instructed to review the agricultural policy and • Provide a brief explanation of the current situation, important issues and challenges pertaining to their areas of jurisdiction • Relating to the current situation, issues and challenges, the departments are required to propose necessary improvements/alternative policy statements
Agricultural Policy Formulation Process Cont… • Each of the departments presents the proposed policy changes at a policy review workshop normally organized by the Policy and Planning Department of MAFS • Then the proposed changes are subjected to discussion and deliberations incorporated in the draft revised agricultural policy
Agricultural Policy Formulation Process Cont… • The draft policy is then discussed in a stakeholders’ workshop which includes representatives from farming communities, inputs suppliers, financial institutions, cooperatives and marketing, traders, district agricultural officers, ministry of finance and the POPP. • The workshop deliberations are incorporated and a second draft of the policy is produced
Agricultural Policy Formulation Process Cont… • The draft is then subjected to normal approval process by submitting it to the Interministerial Coordination Committee. • Thereafter the draft is discussed in the National Steering Committee before it is approved as a Government Policy-the Agricultural Policy.
Implementation of the Policy • The Agricultural Policy is interpreted and implemented through: • Strategies • programmes and projects • The main strategy is the Agricultural Sector Development Strategy, which was formulated in 2001 taking into account of the Agricultural and Livestock Development Policy of 1997 and the Cooperative Policy of 2000.
Implementation of the Policy cont… • The ASDS focuses on agricultural productivity and profitability, the promotion of private sector/public sector and process/contract grower partnerships. • In the ASDS, priority issues include: • Strengthening the institutional framework for managing agricultural development in the country. • Increased private sector participation through creation of a favourable climate for commercial activities
Implementation of the Policy cont… • Clarifying public and private roles in improving support services (research and extension, training, regulation, information and technical services and finance). • Improving the inputs and output marketing systems. • Mainstreaming the planning for agricultural development in other sectors (crosscutting issues such as rural infrastructure development, the impact of HIV/AIDS and malaria, youth migration and environmental management).
Implementation of the Policy cont… • Another important strategy that implements the agricultural policy is the Rural Development Policy • The Rural Development Strategy provides a strategic framework that facilitates implementation coordination of sector policies and strategies concerned with the development of the rural communities.
Implementation of the Policy cont… • Down below these strategies, the policy is implemented through programmes and projects such as the Agricultural Sector Development Programme and the Participatory Agriculture Development and Empowerment Project (PADEP), the District Agriculture Sector Investment Project (DASIP), Agriculture Marketing Systems Development Project (AMSDEP) etc
Implementation of the Policy cont… • The PADEP emphasizes on empowerment of the farming communities through capacity building and investment on community projects • The DASIP, like PADEP, emphasizes on capacity building, investment on community projects and promotion of rural financing and markets • AMSDEP concentrates on development of sustainable marketing systems for both crop commodities and livestock products.
Implementation of the Policy cont… • The agricultural policy is also implemented through the Local Government Reforms Programme which outlines regulatory functions of the lower government bodies and structures, where it tackles the issues of good governance and financing. • The programme also emphasizes on decentralization by devolution.
Agricultural Policy Evaluation • No specific attempts have been done to evaluate the impact of agricultural policy • The evaluation of policy is done only through the process of evaluation of the agricultural sector performance. • The evaluation of the policy requires monitoring of policy implementation accompanied with data collection
Agricultural Policy Evaluation cont… • Such data is not collected. The data if available could be used to: • Assess the feasibility of the policy, implementation costs, impact on budget transfers (subsidy or trade policy-import/export restrictions), efficiency gains, trade effects and impact on government objectives. • Assess the impact on investment policies (research/extension/development of new technologies and infrastructural development (market roads)
Agricultural Policy Evaluation cont… • Correct market failures (lack of market information, monopoly, fewer buyers or sellers, shortage of labour, shortage of credit,land etc) • Identify the cost of production not reflected fully in the market incentives (such as those areas with limitations such as soil erosion and environmental pollution etc) and should justify the need for government interventions e.g. imposing taxes, subsidies or regulatory control
Agricultural Policy Evaluation cont… • Assess the impact of agricultural policy on the private profitability ( difference of revenue and costs) of agricultural systems and on the efficiency of resource use. As the policy evaluation is not done, a realistic need for review of the policy is not justified except for reasons of external pressures such as from donors and other stakeholders
Assessment of the raised Issues- Agro Processing Raised issues as presented in the agricultural Policy under review include: • Post harvest losses in Tanzania are estimated to be 20-40% against the expected 2-3 %. The most likely cause of this loss could be due to: • lack of proper storage • Inadequate knowledge on crop transportation and handling • Lack of proper/efficient post harvest technologies • Absence of preservatives • Lack of processing equipment • Lack of credit etc
Assessment of the raised Issues- Agro Processing cont… • If these are the causes of the reported losses, then further analysis to establish the root cause could provide a hint on what could be an appropriate policy shift. • Should the root cause be lack of knowledge in proper storage, shift toward investment policy would be appropriate i.e. investing in farmer training would be desired.
Assessment of the raised Issues- Agro Processing cont… • However, this must be subjected to more tests on feasibility, implementation costs, budget transfer, efficiency losses, trade effects and finally the impact on government objectives.
Assessment of the raised Issues- Agro Processing cont… • Should the root cause be lack of credit, the shift should be on promotion of SACCOs. • Again this should be further subjected to the above stated tests to be able to come up with a more realistic policy statement.
Assessment of the raised Issues- Agro Processing cont… • A realistic policy would be formed based on factors that influence or regulate development of more sustainable and efficient functioning SACCOs • Factors that would influence increased production would lead into increased income and savings, hence more deposits in SACCOs, which would in turn lead into more loans for the post harvest technologies.
Assessment of the raised Issues- Agro Processing cont… • Mechanical injury during handling and transportation of fruits and vegetables is a serious problem; • This is more related to the causes of reported losses already discussed • The causes could be poor packaging, poor roads, poor transportation facilities, absence of packaging materials, absence of credit or lack of knowledge/negligence etc.
Assessment of the raised Issues- Agro Processing cont… • All these causes would be summed up as farmer’s ignorance in respect of working markets or lack of necessary capital that is required for purchase of proper packaging materials and transportation of quality produce. • If ignorance is the problem, then the policy shift should be on investment in training and if capital is the problem then promotion of SACCOs would be appropriate, but these should be formed based on demand and should meet conditions for proper functioning of SACCOs.
Assessment of the raised Issues- Agro Processing cont… Other raised issues include: • Lack of quality standards in processing and packaging of agricultural produce; • Utilization of chemically produced products by agro-processing factories instead of natural agricultural produce; • Small/medium scale processing centers suffer huge loss due to erratic supplies;
Assessment of the raised Issues- Agro Processing cont… • Due to insufficient demand, weak infrastructure, poor transportation and perishable nature of the crops, the grower sustains substantial losses; • Inconsistent supply of vegetables and fruits to the market, such that during rainy season there is abundant supply and scarcity of the same during dry season;
Assessment of the raised Issues- Agro Processing cont… • Locally processed products fail to compete with imported products; • Unavailability of appropriate machinery and technology.
Assessment of the raised Issues- Agro Processing cont… These issues could be summed up as issues related to conditions necessary for working markets. Competitive markets would require stable supplies in desired quality and quantity of the commodities as well as presence of many buyers. Possible policy shift would be on: • Investment on processing, packaging, storage, transportation/distribution of the products • Investment on research and development of new/efficient post-harvest technologies
Assessment of the raised Issues- Agro Processing cont… • Should the policy shift be on investment in processing, packaging, storage and transportation, the policy formulation should consider the influencing factors/incentives that would ensure perfect competition in the course of processing, packaging, storage and transportation. • Such incentives would include possible subsidies, training, and regulatory control to ensure quality products are produced and reach the markets.
Assessment of the raised Issues- Agro Processing cont… • Such policies should be backed up by periodic policy evaluation to assess their impacts on rural incomes.
Assessment of the Proposed Policy statements for Agro-Processing (Policy under Review) • Before attempting to do the assessment of the proposed policies in slides 10 through 12 above, better we define what a policy is as far as agriculture is concerned. • Agriculture Policy should consist of decisions that influence the level and stability of output and input prices, public investments affecting agricultural revenues and costs, and the allocation of research funds to improve farming and processing technology.
Assessment of the Proposed Policy statements for Agro-Processing (Policy under Review) cont… • This definition attempts to caution policy makers that any statement made by the government should be measured against impact on: • output and input prices, • revenues and costs, and • efficiency in the course of production, processing and marketing
Proposed Policy statements for Agro-Processing (Policy under Review) cont… • This definition justifies policy shifts to promotion of the use of efficient technologies with consideration of the impact on budget transfers (subsidy or trade policy-import/ export restrictions) and investment in public services (research and extension,roads to markets etc) • Such policy shifts should consider: • implementation costs, efficiency gains, trade effects and impact on government objectives. • Impact on investment policies (research/extension/development of new technologies and infrastructural development (market roads)
Proposed Policy statements for Agro-Processing (Policy under Review) cont… • By cross assessment of the proposed policy statements (slides 10-12), the policy statements emphasize on promotion of access to capital (bullets 1,2 & 6), on training and access to technologies (3&4) and on promotion of competitive markets (5,7 & 8). • The policy statements assume that the target farmers face the problems of shortage of capital, need for capacity building and there is lack of working markets
Proposed Policy statements for Agro-Processing (Policy under Review) cont… • While the policy statements seem to be appropriate, they are not formulated on the basis of performance, efficiency and implementability (formation of sustainable production and marketing chains/systems) • These do not look into the effects of implementation costs, efficiency gains, trade effects and impact on government objectives.
Proposed Policy statements for Agro-Processing (Policy under Review) cont… • The policy statements depict a picture of supply driven economy rather than they would be demand/market oriented economy. • Government policies should take the lead in provision of public investments while creating better environment that will promote private sector involvement/investments. This calls for policy shits to market economy.
Conclusion • Based on the above discussion, it appears that the market forces have failed to support growth of the required services and technology development • As long as our main focus is the small farmer, promotion of the use of post harvest technologies has to reflect the situation under the smallholder farming environment