Saint Ivuga
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- Aug 21, 2008
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Agriculture ,FoodSecurity and Cooperatives minister Stephene Wasira speaks at a past event.
Tanzania has failed to meet China's request to purchase over one million tonnes of maize.
This is because the Tanzanian government has been unable to find a reliable stock of maize.
The report that Tanzania is unable to supply a huge consignment of maize to the most populous nation in the world was revealed at the East African Grain Council (EAGC) conference on February 20 this year.
It is a sad report because the government has been repeatedly informing the public that the country has huge maize surplus and was looking for markets within and outside East Africa.
Confirming the report, an EAGC government representative who is also a principal economist at the ministry of Industry and Trade, Mr Kassim Mbufu, said the government was yet to respond to the Chinese government's request to purchase more than one million tonnes because there was no certainty for procurement of such a huge reserve of high quality maize. "The lack of reliable warehouses for stockpiling grain is the major cause of the inability of the country to sell such huge cargo of maize to China.
The application letter from China is still in government hands."
According to him, although official figures indicate that the country has surplus maize of 1.5 million tonnes, most of the maize has been stockpiled by individuals scattered countrywide without certainty of distributing it to the storage and marketing centres.
He insisted that the country would conduct international grain trading efficiently after improving the warehouse system. "Having received such a request from China a month ago until now we are silent because we are not sure of getting the required amount of high quality maize for exports. In this regard the strong warehouse receipt system is a must," he said.
"Most maize stocks are under the National Grain Reserve Agency and its major role is to maintain food security for Tanzanians. The private sector in the country has no capacity to sell huge amounts of maize and to engage in the formal export of maize." According to agribusiness experts, the warehouse receipt system involves a farmer owning a receipt used in future markets to guarantee the quantity and quality of a particular commodity being stored within an approved facility to fetch lucrative crop market and access credit for increased farm output.
A senior agriculture officer in the Department of Food Security under the ministry of Agriculture, Food Security and Cooperatives, Mr Sadoti Makwaruzi, supports that grain dealing is a complex business in Tanzania because a sound warehouse receipt system is not in place.
"Maize export is a complicated business in the country because the role of the government is to ensure food security. The National Food Reserve Agency is not allowed to do business under the law.
In response to this situation the government has established the national cereals and other produce boards," said Mr Makwaruzi. According to him, the interest of the government must be balanced by the interest of private dealers who are after profit maximisation.
He cites a case whereby a private maize dealer sells a kg of maize for Sh1,200 outside the country, while the agency sells for Sh120 in the local market.
Grain export in most cases is conducted through informal ways known as panya routes, according to him.
"There is a great need to establish a collective warehousing system to include the public and private sector grain dealers."
He said recognising the weakness of grain storage facilities in the country, the government was embarking on a programme of refurbishing 275 warehouses. "In the past financial year 30 warehouses were rehabilitated. In this financial year 38 warehouses in the southern highlands regions will be rehabilitated. We will continue with the programme in the next financial year."
According to him, in 2014/15 financial year the government has set aside Sh6.9 billion for refurbishing 52 warehouses.
Mr Guliad Terri, a policy analyst for Agricultural Non-State Actors (Ansaf) said the complication of grain market arose from the fact that every actor was distorting the market as there was no regulator.
EAGC programme officer Juma Ngumuo said there was a need to review the warehouse receipt system law to improve grain storage facilities.
"Maize and rise do not work well under the warehouse receipt system. We have to evaluate and review the system," said Mr Ngumuo.
In Tanzania, the warehouse receipt law was enacted in 2005 with the establishment of the Tanzania Warehouse Licensing Board to issue licences to operators, inspect warehouse operators and approve warehouse receipts.
The warehouse receipts are normally used by the farmers as collateral to access credit from the commercial banks.
The benefits of warehouse receipt system, according to experts, include enabling farmers to sell their farm produce at lucrative prices, acting as leverage for improved farmers' access to market and improve agricultural productivity.
MORE INFO: IMPLEMENTATION OF WAREHOUSE RECEIPT SYSTEM
According to 2014 report of the ministry of Agriculture, Food Security and Cooperatives, the warehouse receipt system has been confined to coffee and cotton and cashew nuts. It is not implemented in other crops due to resistance caused by powerful traders with profit motives.
Source:thecitizen
