The Tanzania Exporters Association (TANEXA) Executive Secretary, Mr Mtemi Laurence, made the remarks in Dar es Saalam in an interview with the ‘Daily News’ while commenting on the state and potential of agribusiness to the economic growth.
“Demand for food products have in recent years rose drastically which could have been an opportunity for investors in agro-industry to harness and reap premium profits,” he said. Producers in each place should seek to satisfy the surrounding markets.
Mr Laurence cited the case of rice production in Mbeya, Morogoro and Shinyanga regions which were supposed to focus on the markets available in their zones before looking for other areas in the country. Traders in agro-products need to enhance the quality of the products by applying better packaging standards for the commodities to find ways to penetrate in the supermarkets in the country, in the East African countries and the rest of Africa.
According to the Tanzania Industrial Competitive Report (TICR) 2012 states that the Manufacturing Value Added (MVA) as a share of the Gross Domestic Product (GDP) has mostly stagnated at roughly 9.5 per cent between 2000 and 2010, which is still below the average for the region, making Tanzania one of the least industrialised countries in the world.
Agriculture sector in the country remains the mainstay of the economy accounting for 24 per cent of the GDP and provide livelihood and income for around 75 per cent of the population. Despite high costs of production due to poor infrastructure from the production to the market places which have been constantly pushing up prices, demand for agriculture commodities is continuously building up, the fact that has remained unrecognized to most business people.
An agriculture expert with the United States Agency for International Development (USAID) in Tanzania Mr David Nyange expressed the need for diversification of crops as a necessary step to make agribusiness profitable.
“Shifting from traditional crop farming including cotton, coffee, tea and sisal whose prices have been taking a downward trend, to food products could put the country into a better position of reaping premium returns due to mounting local and international demands,” he remarked during the launching of the Agribusiness for Africa’s Prosperity on Monday this week.
For example, if costs of production of rice in Tanzania are high compared to other countries like Thailand and China, then traders in the said countries would export and supply local markets thus robbing lucrative opportunity for the local producers.