Agricultural Policy Analysis Prof. Samuel Wangwe Executive Director REPOA 28 th July 2012

Outline Context and Background Policy analysis to achieve transformation Conclusion

Context and Background The development challenge – Widespread poverty – Poverty as a rural phenomenon – Food as high share of household expenditure – Agriculture produces food as a wage good- driver of cost of production and competitiveness. – Agriculture produce raw material s and other inputs into production processes in industry and other sectors.

Pattern of structural transformation – Regular pattern: the economic importance of agriculture declines as GDP per capita (GDPpc) rises – the share of agriculture in the labour force is larger (at 75% in Tanzania) than that of GDP (at 25%), signaling lower labor productivity and higher poverty in agriculture. – achieving productivity gains in agriculture and developing a competitive sector of resource processing industries is the most logical starting point as a source of sustained growth.

Approach to poverty reduction Enrich and broaden policy discussions towards poverty reduction strategies in Africa Eliminate hunger and achieve sustainable food security facilitate collaboration on important policy issues including – Agriculture transformation- strong case for a productivity revolution in agriculture and promotion of agro-industry in the rural nonfarm economy. – south-south cooperation, – social protection- forms directed towards transformation, – public private partnerships.

Higher and sustained agricultural growth is needed to meet Tanzania’s Vision 2025, Five Year Development Plan and MKUKUTA II; Agriculture development for Poverty reduction –about 87 percent of the poor live in rural areas –agriculture accounts for a large share (60 percent) of rural household incomes; –agriculture accounts for about 25 percent of Tanzania’s GDP –agriculture stimulates economic growth indirectly through larger consumption and production linkages with the rest of the economy than other sectors. –meeting the country’s food security needs in both rural and expanding urban areas requires higher agricultural growth contributing to higher incomes and lowering food prices and enhancing nutrition.

Five Year Development Plans selects six goals for enhancing agricultural transformation for the realisation of Vision – a) Expanding and improving irrigation infrastructure; – b) Easing availability and enhancing utilization of modern agricultural inputs and mechanization; – c) Improving and strengthening availability of scientific production methodologies through research, training and provision of extension services; – d) Improving market access, and; – e) Promoting agro-processing and value addition activities.

KILIMO KWANZA comprises ten actionable pillars: – Political will to push our agricultural transformation. – Enhanced financing for agriculture. – Institutional reorganization and management of agriculture. – Paradigm shift to strategic agricultural production. – Land availability for agriculture. – Incentives to stimulate investments in agriculture. – Industrialization for agricultural transformation. – Science, technology and human resources to support agricultural transformation. – Infrastructure Development to support agricultural transformation. – Mobilization of Tanzanians to support and participate in its implementation.

Policy analysis to achieve transformation agriculture policy issues – New context: rising food prices, rejuvenated global attention to and support for agriculture, increased awareness of the influence of climate change on farming systems, Revival of political commitment. Improved governance, acceptance of decentralisation and participation- locally defined and optimized models of developing due to deep heterogeneity.

– the policy development process in agriculture: Setting the agriculture for development agenda: assessments to provide information on the basic facts and processes at play

– Decentralisation and participation: Participatory for shared vision: the type of agrarian society the country wants to be: smallholder-based or agribusiness; centralized in urban settings or with active rural nonfarm economies – systematic evaluation and impact analysis of successful past experiences with scaling up potential and experience from other countries – Financial sector reforms: access, suitability and affordability. Need for linkages from VICOBA to community banks and national level banks.

– Incentives: less tax on agriculture (improved pass through), to induce changes for higher productivities and transformation – Market development: national, regional and global markets. – Positioning in the regional and global regional economy – Politics and power or voice- rural cooperative economy – Land and water management: land use planning, land tenure, land reform, irrigation (what kind, under what conditions, water management). – industrial chain for agriculture- value addition and moving up the value chain

– Capacity for successful policy making needs to built and developed. – Recognizing the complexity of using agriculture for development – Recognizing the need for expertise, analysis, experimentation, learning, commitment, coordination, and perseverance – Institutional reforms: synergy between public and private sector. – capacity development (policy analysts, entrepreneurship, farmer associations and cooperatives, capacity to effectively harness the power of ICT).

Conclusion – Recognise the background and context og agricultural transformation – Participatory agenda to ensure shared vision on approach to agricultural transformation – Decentralisation for locally specific strategies. – Lear from experience (own and others) – Capacity development (human and institutional)

Thank you for your attention