James Faustine
Member
- Jul 29, 2021
- 10
- 11
INTRODUCTION.
Agriculture is the backbone of the Tanzanian Economy but its contribution towards the country's Gross Domestic Product (GDP) is still not significant in comparison to other sectors of the economy such as the service sector, industry sector and the construction sector.Despite the government's efforts in encouraging agriculture productivity in Tanzania, agriculture productivity is still low resulting to low exportation of the agriculture products.
There are both threats and opportunities in the agriculture sector but it is so unfortunate that most of the countries in sub-Saharan Africa fail to exploit the available opportunities. Many sub-Saharan African countries are still lagging behind in terms of agricultural development by producing low-skill, low-value products and services, struggling to obtain a significant value-added share in global trade. “Without market knowledge, particular expertise, or competitive products or services, entire economies will essentially fail to take advantage of the potentially high benefits of global markets and the increases in global trade flows”(Associates et al.)
Value chain in the agriculture sector may serve as a catalyst for sustainable development and encourage the export of the agriculture products and facilitate economic growth. For instance the agricultural sector in the East African Community depends mainly on certain staple crops such as maize or rice in terms of both income-generation and consumption.“There is, on the whole, low agricultural productivity and persistently high post-harvest losses.
Moreover, the majority of farmers, in particular smallholder farmers, support themselves through subsistence farming, rather than income-generation and a large proportion of trade is informal” (Chain, 2014).Value chain in agriculture incorporates the set of actors and activities that bring basic agricultural products from production in the field to final consumption, where at each stage value is added to the product. A value chain can be a vertical linking or a network between various independent business organizations and may sometimes involve processing, packaging, storage, transport and distribution(Valley, 2010).
In East African Countries the value chain in agriculture is not a new phenomena, despite the low agricultural exports the East African countries are trying their best to add value in their agricultural export so as to remain competitive. Example, fresh vegetable chain in Kenya where the small exporters would buy green beans in local wholesale market directly from the small holder farmers, pack them and send them to the importers in united Nations.
Despite the threats that exist in the market for agriculture products, there are a lot of market potentials and opportunities that can be obtained by incorporating value chains in the agriculture sector, which in turn may lead to export promotion in the country and encourage the growth of the economy.
MAIN BODY
The point’s below highlights and explains how Agricultural Value chains may serve as a remedy for low economic growth in Tanzania;
Value chain as the way to exploit market opportunities. There are various market opportunities that can be obtained from adding value chain for the agricultural commodities such as an opportunity for increasing revenue by increasing the volume of production.
In line with this value chain may facilitates the production of by-products which in turn may be sold in foreign markets and increase the country’s earning through export and hence promote economic growth. “Potential also exist in improving the profitability of processing through diversifying the product range including through commercial utilization of the readily available waste, and by utilization of other by- products such as cashew nut shells liquid (CNSL), and cashew apples for biogas generation”(UNIDO, 2011).
Market opportunities will serve as the catalyst for increasing agricultural production which in one way or another will be triggered by increasing rate of value chains in agriculture. Example Value chain in agriculture sector may lead to diversification which entails selling new products in the new markets (foreign markets) which may in turn lead to the growth of the economy.
Value chain strengthens production linkages. Value chain facilitates forward and backward linkages between various sectors of the economy. The agriculture sector may sell inputs (raw materials) to the industries for processing and transforming them into final goods. “If entrepreneurial traders can see the returns of doing business in a new way by investing in improved post-harvest systems while sharing the gains with smallholders, this will create a virtuous cycle where traders and processors continue to invest in backward linkages”(Boone, 2011)
Value chain promotes Industrialization. Economic growth and industrialization cannot be separated ad they influence each other. Industrialization is the engine for economic growth as it facilitates infrastructural development, stimulate production activities and lead to the creation of employment opportunities.
Value chains may attract different industries (processing industries) which will base on processing the raw materials from the agriculture sector into different by-products. The influx of these industries will stimulate agriculture production, industrial sector development and hence promote economic growth. “Successful integration into a value chain allows a country to potentially accelerate its industrialization”(UNDP et al, 2014)
A value chain improves the quality of exports. The quality of exports may affect the price and influence the foreign demand and consumption. The low quality goods especially from the developing countries tend to fetch lower prices in the world market which in turn makes the developing countries goods to be out-competed by the goods from the developed countries; however the value chain in the agriculture sector may serve as the catalyst for increasing the agriculture exports in countries like Tanzania .
The international buyers are quality-induced and quality, dependability, volume ,traceability and the delivery speed are among the elements that the buyers take into consideration. The sector based strategy to increase the export earnings in the agriculture sector should reflect clearly the market conditions and the processes required to deliver a product to the market (centre, 2003)
Value chains expand the technological frontier. Technology and agriculture productivity are two sides of the coin. Value chain enhances technological changes as there will many processing industries that will act as the bridge between the unprocessed agriculture products and the semi or processed goods after the value chain processes has taken place. Economic growth of the country may be indicated by the outward shift of its production possibility frontier.
Over a period of time, a number of specialized international organizations have been trying to work closely with the least developed countries (LDCs) to promote the expansion of local and international value chains that benefit small agricultural producers and entrepreneurs, who create jobs and income. The notable organizations includes but not limited to, Food and Agriculture Organization (FAO), the international fund for Agricultural development (IFAD), the African development Bank (AFDB)(Path, 2013)
CONCLUSION
The government efforts in promoting economic growth in Tanzania will be fruitless if value chains are not well incorporated in the agriculture sector as most of the developing countries like Tanzania depend largely on the agriculture sector to improve and boost their economy.
Therefore the Government through her agencies as well as the private agricultural institutions should engage fully in an integrated value chain development support program that would foster the development of and value addition in the agriculture sector so as to foster economic growth. This should go hand in hand with improving access to finance at various levels of the agriculture value chain, capacity building, technological upgrading, use of by-products such, chain coordination, and an improving business and market environment.
REFERENCES
American, L., & Valley, S. (2010). Agricultural value chain development : Threat or opportunity for women ’ s employment ?
Associates, J. E. A., Webber, M., Associates, J. E. A., Labaste, P., & Bank, T. W. (n.d.). Using value chain approaches in sub-saharan africa.
Boone, P. (2011). Market linkages initiative. (December).
Centre, I. T. (2003). Value Chain Analysis:A strategy to Increase Export Earnings. International Trade Forum Magazine (1).
Chain, A. V. (2014). Briefing Paper. 1–8.
Director-general, L. I. Y., Undp, U., Maarten, A., World, S., & Organisation, T. (2014). Value Chains and Industrialisation. 3(5).
Path, T. H. E. D. (2013). chapter 3: Value chains and the development path. 89–119.
UNIDO. (2011). Tanzania ’ s Cashew Value Chain : A diagnostic.
Agriculture is the backbone of the Tanzanian Economy but its contribution towards the country's Gross Domestic Product (GDP) is still not significant in comparison to other sectors of the economy such as the service sector, industry sector and the construction sector.Despite the government's efforts in encouraging agriculture productivity in Tanzania, agriculture productivity is still low resulting to low exportation of the agriculture products.
There are both threats and opportunities in the agriculture sector but it is so unfortunate that most of the countries in sub-Saharan Africa fail to exploit the available opportunities. Many sub-Saharan African countries are still lagging behind in terms of agricultural development by producing low-skill, low-value products and services, struggling to obtain a significant value-added share in global trade. “Without market knowledge, particular expertise, or competitive products or services, entire economies will essentially fail to take advantage of the potentially high benefits of global markets and the increases in global trade flows”(Associates et al.)
Value chain in the agriculture sector may serve as a catalyst for sustainable development and encourage the export of the agriculture products and facilitate economic growth. For instance the agricultural sector in the East African Community depends mainly on certain staple crops such as maize or rice in terms of both income-generation and consumption.“There is, on the whole, low agricultural productivity and persistently high post-harvest losses.
Moreover, the majority of farmers, in particular smallholder farmers, support themselves through subsistence farming, rather than income-generation and a large proportion of trade is informal” (Chain, 2014).Value chain in agriculture incorporates the set of actors and activities that bring basic agricultural products from production in the field to final consumption, where at each stage value is added to the product. A value chain can be a vertical linking or a network between various independent business organizations and may sometimes involve processing, packaging, storage, transport and distribution(Valley, 2010).
In East African Countries the value chain in agriculture is not a new phenomena, despite the low agricultural exports the East African countries are trying their best to add value in their agricultural export so as to remain competitive. Example, fresh vegetable chain in Kenya where the small exporters would buy green beans in local wholesale market directly from the small holder farmers, pack them and send them to the importers in united Nations.
Despite the threats that exist in the market for agriculture products, there are a lot of market potentials and opportunities that can be obtained by incorporating value chains in the agriculture sector, which in turn may lead to export promotion in the country and encourage the growth of the economy.
MAIN BODY
The point’s below highlights and explains how Agricultural Value chains may serve as a remedy for low economic growth in Tanzania;
Value chain as the way to exploit market opportunities. There are various market opportunities that can be obtained from adding value chain for the agricultural commodities such as an opportunity for increasing revenue by increasing the volume of production.
In line with this value chain may facilitates the production of by-products which in turn may be sold in foreign markets and increase the country’s earning through export and hence promote economic growth. “Potential also exist in improving the profitability of processing through diversifying the product range including through commercial utilization of the readily available waste, and by utilization of other by- products such as cashew nut shells liquid (CNSL), and cashew apples for biogas generation”(UNIDO, 2011).
Market opportunities will serve as the catalyst for increasing agricultural production which in one way or another will be triggered by increasing rate of value chains in agriculture. Example Value chain in agriculture sector may lead to diversification which entails selling new products in the new markets (foreign markets) which may in turn lead to the growth of the economy.
Value chain strengthens production linkages. Value chain facilitates forward and backward linkages between various sectors of the economy. The agriculture sector may sell inputs (raw materials) to the industries for processing and transforming them into final goods. “If entrepreneurial traders can see the returns of doing business in a new way by investing in improved post-harvest systems while sharing the gains with smallholders, this will create a virtuous cycle where traders and processors continue to invest in backward linkages”(Boone, 2011)
Value chain promotes Industrialization. Economic growth and industrialization cannot be separated ad they influence each other. Industrialization is the engine for economic growth as it facilitates infrastructural development, stimulate production activities and lead to the creation of employment opportunities.
Value chains may attract different industries (processing industries) which will base on processing the raw materials from the agriculture sector into different by-products. The influx of these industries will stimulate agriculture production, industrial sector development and hence promote economic growth. “Successful integration into a value chain allows a country to potentially accelerate its industrialization”(UNDP et al, 2014)
A value chain improves the quality of exports. The quality of exports may affect the price and influence the foreign demand and consumption. The low quality goods especially from the developing countries tend to fetch lower prices in the world market which in turn makes the developing countries goods to be out-competed by the goods from the developed countries; however the value chain in the agriculture sector may serve as the catalyst for increasing the agriculture exports in countries like Tanzania .
The international buyers are quality-induced and quality, dependability, volume ,traceability and the delivery speed are among the elements that the buyers take into consideration. The sector based strategy to increase the export earnings in the agriculture sector should reflect clearly the market conditions and the processes required to deliver a product to the market (centre, 2003)
Value chains expand the technological frontier. Technology and agriculture productivity are two sides of the coin. Value chain enhances technological changes as there will many processing industries that will act as the bridge between the unprocessed agriculture products and the semi or processed goods after the value chain processes has taken place. Economic growth of the country may be indicated by the outward shift of its production possibility frontier.
Over a period of time, a number of specialized international organizations have been trying to work closely with the least developed countries (LDCs) to promote the expansion of local and international value chains that benefit small agricultural producers and entrepreneurs, who create jobs and income. The notable organizations includes but not limited to, Food and Agriculture Organization (FAO), the international fund for Agricultural development (IFAD), the African development Bank (AFDB)(Path, 2013)
CONCLUSION
The government efforts in promoting economic growth in Tanzania will be fruitless if value chains are not well incorporated in the agriculture sector as most of the developing countries like Tanzania depend largely on the agriculture sector to improve and boost their economy.
Therefore the Government through her agencies as well as the private agricultural institutions should engage fully in an integrated value chain development support program that would foster the development of and value addition in the agriculture sector so as to foster economic growth. This should go hand in hand with improving access to finance at various levels of the agriculture value chain, capacity building, technological upgrading, use of by-products such, chain coordination, and an improving business and market environment.
REFERENCES
American, L., & Valley, S. (2010). Agricultural value chain development : Threat or opportunity for women ’ s employment ?
Associates, J. E. A., Webber, M., Associates, J. E. A., Labaste, P., & Bank, T. W. (n.d.). Using value chain approaches in sub-saharan africa.
Boone, P. (2011). Market linkages initiative. (December).
Centre, I. T. (2003). Value Chain Analysis:A strategy to Increase Export Earnings. International Trade Forum Magazine (1).
Chain, A. V. (2014). Briefing Paper. 1–8.
Director-general, L. I. Y., Undp, U., Maarten, A., World, S., & Organisation, T. (2014). Value Chains and Industrialisation. 3(5).
Path, T. H. E. D. (2013). chapter 3: Value chains and the development path. 89–119.
UNIDO. (2011). Tanzania ’ s Cashew Value Chain : A diagnostic.
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