ETG Farmers Foundation (EFF) Export Trading Group (ETG)
Main responsible entity
2013 – 2016
Agriculture is the largest sector in the economy of Tanzania. About half of the GDP and exports come from agriculture. Moreover, most industries are linked to the agricultural sector as well. About 70% of the incomes of rural households are derived from the sale of agricultural products. Most smallholder farmers cultivate less than 5 acres of land using hand tools and traditional agricultural practices. Women form the majority of the agricultural labour force, especially in the production of food crops. Despite the importance of smallholder agriculture in the agricultural sector of the continent, restricted access to markets and credit, inadequate infrastructure and low levels of skills and knowledge transfer have constrained the productivity growth of the sector, resulting in increasing rural transformation through migration.
Most farmers are able to meet their daily food needs through their own harvest or by purchasing other food crops locally, but have no surplus food or income, and therefore rarely invest in productive assets or even in inputs for the next season, keeping the quantity and quality of their produce low and ending up trapped in poverty. Many even borrow from informal lenders to meet near-term cash needs.
The United Nations declared 2016, the International Year of the Pulses to give significance to pulses as a future food for health, nutrition and sustainability. Tanzania is the tenth largest producer of pulses in the world and the second in Africa.
EFF has created an opportunity to commercialize the farming of pulses (pigeon pea and green gram) amongst smallholder farmers in the region of Tanga by partnering with District Agricultural Authorities and thereby optimizing crop yields, the quality of production and increasing profitability for farmers, linking them to ETG as a guaranteed market buyer.
Despite favourable soil and climate conditions farmers were not producing these crops because they were unaware of their potential cash benefit and were lacking farming knowledge and technologies for substantial production which would attract a commercial market buyer.
Key characteristics of the experience/process
Season 1: March-December 2013 – Demo plot set up and group formation
Farmers’ skills development and knowledge transfer through demonstration plots management and group training. EFF, in cooperation with government field officers, implemented an extension training model which uses a commercial approach to provide farmers technical skills as well as insight to long term profitability and value. Taking advantage of the bimodal rain pattern in the region (two rainy seasons per year) the EFF team and government extension staff taught farmers skills and best practices in pigeon pea and green gram cultivation from land preparation to post harvest handling, holistic farm management, land preservation, new technologies including improved seed varieties, use of fertilizers and agro chemicals, and farming as a business skills.
Season 2: March-December 2014 – Contract farming scheme (seed input loan)
EFF established a network of 800 farmers (direct beneficiaries): 500 to grow pigeon peas and 300 to grow green grams on contract for ETG. Seed loan: Each contracted farmer received a loan 4 kg improved variety seed required to cultivate 1 acre of land and technical assistance. The average yield per farmer rose from below 100 kg/acre to 150/kg.
Season 3: March-December 2015 – Contract farming scheme (seed + agro chemical input loan)
Input finance was extended to 300 farmers growing pigeon peas and 100 farmers growing green gram with the addition of a supply of agro-chemicals. At procurement, EFF introduced mobile money payments, contributing to smallholders’ financial inclusion.
Season 4: March 2016 ongoing – EFF activities:
EFF has continued with demonstration plots while expanding the project with a seed multiplication scheme. There continues to be a provision of inputs for farmer and mechanization services have begun to be offered on a cash basis. Through the official registration of groups the linkages with credit institutions such as NMB Bank have become secure and sustainable.
Key actors involved and their role
ETG Farmers Foundation – implementing partner
ETG Tanzania – private sector partner
NMB Bank – financial lender
Government Extension Staff – field operations
Key changes observed with regards to food security and nutrition and sustainable agriculture and food systems
Of the 1300 farmers who took part in the project the average annual income for those who grew pigeon peas increased between US$220-$270 and for those who grew green grams their annual income increased by approximately US$380-$440. From the Tanga project 800 farmers grew pigeon peas averaging a yield of 300kg and of the 500 farmers who grew green grams their average yield was 350kg. This annual income significantly increased the livelihoods of rural farmers who have invested the income back into their properties and it has alleviated rural poverty within the Tanga region.
Despite the enormous potential, the sector has many challenges to face. As is the case of the whole agricultural sector, smallholder farmers lack commercially available improved pulse varieties; have limited access to inputs; training and services to improve productivity and reduce losses; and have limited access to rural finance, storage and warehousing facilities and market information. This means that there is a great need to not only scale up production, but to improve the quality of the product and its marketability to meet the growing global demand. EFF faced all of these challenges with the implementation of the project but working with government officials and financial institutions using ETG as a financial backer EFF was able to secure financing for smallholder farmers through NMB Bank and NMB Foundation.
In terms of seed varieties, although the general trend in availability of improved seeds in Tanzania is increasing. The seed requirements of farming communities, especially the smallscale farmers, in terms of quantities and/or crop species, has not been met by the formal seed system primarily due to: inadequate capacities of the local production, socio-cultural preferences of different farming communities in various agro-ecological regions and farmers’ low purchasing power. In the attempt to cover the seed shortage, promote crop diversification and enhance the uptake of improved varieties, in January 2016 EFF designed and established an on-farm seed multiplication scheme providing the necessary legal, administrative support, inputs, tools and technical training to selected farmers in the region, to enable them to produce and supply improved pigeon pea seeds to fellow farmers at affordable prices.
EFF saw the opportunity to introduce pulses to increase smallholder household income and reduce poverty in rural Tanzania. EFF trained government extension staff to set up and manage demonstration plots, imparting technical expertise and working in conjunction with government so the program could become sustainable and long lasting. We also introduced improved varieties of seeds, usage on inorganic and organic inputs through technical training and formalised groups by villages in over 20 villages reaching over 1,300 smallholder farmers. The project will continue after EFF withdraws itself from the project due to the now established linkages between the private sector partner ETG and the communities of farmers and formalised farmer groups.