Post-Harvest Innovations Project

1
Post-Harvest Innovations Project

• Policy Review

2
Policy Review Objective

• The aim of the policy review is to develop and
  present a clear picture of how present policies
  and the dynamics associated with their
  formulation and implementation have or will have
  bearing on the post-harvest situation in Tanzania
  and the national post-harvest innovation system.

3
Approach and Methodology

• Consultative meeting with Post-Harvest
  Innovations Project Officer
• Desk review and analysis of various policy
  documents
• Preparing and submitting a draft report to the
  Post-Harvest Innovation Project Officer.

4
Review of Relevant Documents

• Various documents were reviewed. These included
• The Agricultural Policy
• Agricultural Development Strategy
• The Land Policy
• The Cooperative Policy, Water Policy and Taxation
  Policy
• Trade Policy
• Local Government Reform Programme
• The Tanzania Development Vision 2025
• Poverty Reduction Strategy Paper (PRSP)
• Agriculture Sector Development Programme
  Framework Doc
• Agricultural Extension Vision 2000

5
The Agricultural Policy

• Agricultural policy provides the government
  decisions that influence the level and stability
  of food security and farm incomes
• these decisions are aimed at influencing the
  output and input prices, public investments
  affecting agricultural revenue and costs, and
  allocation of research funds to improve farming
  such as in areas of development of post harvest
  technologies
• The Policy seeks to ensure that the direction and
  pattern of development in the agricultural sector
  meets economic and social objectives and outputs.
  

6
The Agricultural Policy Cont

• The policy emphasizes on the importance of
  competitive markets, with the Government
  providing priority public goods and services and
  the conservation of the environment as a rational
  basis for agricultural development.
• The focus of the policy is on how the Government
  deploys these services to support the private
  sector in promoting growth and commercialization
  in the sector.

7
The Agricultural Policy Objectives

• The policy objectives are
• To improve standards of living in the rural areas
  through increased income generation from
  agricultural production, processing and
  marketing
• To increase foreign exchange earnings for the
  nation by encouraging the production and
  increased exportation of cash crops   

8
The Agricultural Policy Objectives Cont

• To produce and supply raw materials, including
  industrial crops while also expanding the role of
  the sector as a market for industrial outputs
  through the application of improved production,
  marketing and processing technology
• To develop and introduce new technology which
  increase the productivity of labour and land

9
The Agricultural Policy Objectives Cont

• To promote integrated and sustainable use and
  management of natural resources such as land,
  soil, water and vegetation to conserve the
  environment
• To develop human resources within the sector in
  order to increase the productivity of labour and
  to improve ability, awareness and morale
• To provide support services to the agriculture
  sector, which cannot be provided efficiently by
  the private sector.

10
Policy Statements Specific to Post-Harvest
Interventions

• The Government will encourage the formation of
  common interest groups (youth, women, retired
  officers, etc) to pull resources in order to
  establish and carry out agro-processing
  activities
• The Government will encourage the private sector,
  NGOs and other funding organizations to
  participate and support agro-processing
  activities by ensuring availability of necessary
  utilities and infrastructure

11
Policy Statements Specific to Post-Harvest
Interventions Cont

• The Ministry will emphasize on capacity building
  for both technical staff and community
• The Government will introduce and promote modern
  methods of agro-processing especially for roots,
  tubers, fruits and vegetables to add value and
  extend their shelf life
• The Government will ensure quality control and
  standards in processing, packaging and
  transportation of agricultural produce to ensure
  smooth handling

12
Policy Statements Specific to Post-Harvest
Interventions Cont

• The Government will facilitate availability of
  credit facilities involving private sector and
  NGOs
• The Government will strive to develop modalities
  to enhance competitiveness of locally processed
  agro-products
• The Government will encourage the production,
  importation and distribution of appropriate
  machinery and other facilities for
  agro-processing.

13
The Land Policy

• The national land policy promotes and ensures a
  secure land tenure system and encourages optimal
  use of land resources.
• It identifies three categories of land i.e.
• Village /customary land
• Public/Gazette land (i.e. national parks, forest
  reserves) and
• General land. General land is land that does not
  fall in the above two categories, this is the
  land available for private investors, that can be
  acquired for private enterprise development.

14
The Cooperative Policy

• The Cooperative Policy provides the framework for
  the restructured co-operatives
• to operate on an independent, voluntary and
  economically viable basis and
• to develop centres for providing and
  disseminating agricultural inputs, implements,
  technologies and information.

15
Agricultural Policy Formulation Process

• The Policy Unit in MAFS takes the lead in the
  formulation process by inviting the participation
  of all its technical departments to review
  respective policy statements

16
Agricultural Policy Formulation Process Cont

• Then the technical departments are instructed to
  review the agricultural policy and
• Provide a brief explanation of the current
  situation, important issues and challenges
  pertaining to their areas of jurisdiction
• Relating to the current situation, issues and
  challenges, the departments are required to
  propose necessary improvements/alternative policy
  statements

17
Agricultural Policy Formulation Process Cont

• Each of the departments presents the proposed
  policy changes at a policy review workshop
  normally organized by the Policy and Planning
  Department of MAFS
• Then the proposed changes are subjected to
  discussion and deliberations incorporated in the
  draft revised agricultural policy

18
Agricultural Policy Formulation Process Cont

• The draft policy is then discussed in a
  stakeholders workshop which includes
  representatives from farming communities, inputs
  suppliers, financial institutions, cooperatives
  and marketing, traders, district agricultural
  officers, ministry of finance and the POPP.
• The workshop deliberations are incorporated and a
  second draft of the policy is produced

19
Agricultural Policy Formulation Process Cont

• The draft is then subjected to normal approval
  process by submitting it to the Interministerial
  Coordination Committee.
• Thereafter the draft is discussed in the National
  Steering Committee before it is approved as a
  Government Policy-the Agricultural Policy.

20
Implementation of the Policy

• The Agricultural Policy is interpreted and
  implemented through
• Strategies
• programmes and projects
• The main strategy is the Agricultural Sector
  Development Strategy, which was formulated in
  2001 taking into account of the Agricultural and
  Livestock Development Policy of 1997 and the
  Cooperative Policy of 2000.

21
Implementation of the Policy cont

• The ASDS focuses on agricultural productivity and
  profitability, the promotion of private
  sector/public sector and process/contract grower
  partnerships.
• In the ASDS, priority issues include
• Strengthening the institutional framework for
  managing agricultural development in the country.
• Increased private sector participation through
  creation of a favourable climate for commercial
  activities

22
Implementation of the Policy cont

• Clarifying public and private roles in improving
  support services (research and extension,
  training, regulation, information and technical
  services and finance).
• Improving the inputs and output marketing
  systems.
• Mainstreaming the planning for agricultural
  development in other sectors (crosscutting issues
  such as rural infrastructure development, the
  impact of HIV/AIDS and malaria, youth migration
  and environmental management).

23
Implementation of the Policy cont

• Another important strategy that implements the
  agricultural policy is the Rural Development
  Policy
• The Rural Development Strategy provides a
  strategic framework that facilitates
  implementation coordination of sector policies
  and strategies concerned with the development of
  the rural communities.

24
Implementation of the Policy cont

• Down below these strategies, the policy is
  implemented through programmes and projects such
  as the Agricultural Sector Development Programme
  and the Participatory Agriculture Development and
  Empowerment Project (PADEP), the District
  Agriculture Sector Investment Project (DASIP),
  Agriculture Marketing Systems Development Project
  (AMSDEP) etc

25
Implementation of the Policy cont

• The PADEP emphasizes on empowerment of the
  farming communities through capacity building and
  investment on community projects
• The DASIP, like PADEP, emphasizes on capacity
  building, investment on community projects and
  promotion of rural financing and markets
• AMSDEP concentrates on development of sustainable
  marketing systems for both crop commodities and
  livestock products.

26
Implementation of the Policy cont

• The agricultural policy is also implemented
  through the Local Government Reforms Programme
  which outlines regulatory functions of the lower
  government bodies and structures, where it
  tackles the issues of good governance and
  financing.
• The programme also emphasizes on decentralization
  by devolution.

27
Agricultural Policy Evaluation

• No specific attempts have been done to evaluate
  the impact of agricultural policy
• The evaluation of policy is done only through the
  process of evaluation of the agricultural sector
  performance.
• The evaluation of the policy requires monitoring
  of policy implementation accompanied with data
  collection

28
Agricultural Policy Evaluation cont

• Such data is not collected. The data if available
  could be used to
• Assess the feasibility of the policy,
  implementation costs, impact on budget transfers
  (subsidy or trade policy-import/export
  restrictions), efficiency gains, trade effects
  and impact on government objectives.
• Assess the impact on investment policies
  (research/extension/development of new
  technologies and infrastructural development
  (market roads)

29
Agricultural Policy Evaluation cont

• Correct market failures (lack of market
  information, monopoly, fewer buyers or sellers,
  shortage of labour, shortage of credit,land etc)
• Identify the cost of production not reflected
  fully in the market incentives (such as those
  areas with limitations such as soil erosion and
  environmental pollution etc) and should justify
  the need for government interventions e.g.
  imposing taxes, subsidies or regulatory control

30
Agricultural Policy Evaluation cont

• Assess the impact of agricultural policy on the
  private profitability ( difference of revenue and
  costs) of agricultural systems and on the
  efficiency of resource use.
• As the policy evaluation is not done, a realistic
• need for review of the policy is not justified
  except
• for reasons of external pressures such as from
• donors and other stakeholders

31
Assessment of the raised Issues- Agro Processing

• Raised issues as presented in the agricultural
  Policy under review include
• Post harvest losses in Tanzania are estimated to
  be 20-40 against the expected 2-3 . The most
  likely cause of this loss could be due to
• lack of proper storage
• Inadequate knowledge on crop transportation and
  handling
• Lack of proper/efficient post harvest
  technologies
• Absence of preservatives
• Lack of processing equipment
• Lack of credit etc

32
Assessment of the raised Issues- Agro Processing
cont

• If these are the causes of the reported losses,
  then further analysis to establish the root cause
  could provide a hint on what could be an
  appropriate policy shift.
• Should the root cause be lack of knowledge in
  proper storage, shift toward investment policy
  would be appropriate i.e. investing in farmer
  training would be desired.

33
Assessment of the raised Issues- Agro Processing
cont

• However, this must be subjected to more tests on
  feasibility, implementation costs, budget
  transfer, efficiency losses, trade effects and
  finally the impact on government objectives.

34
Assessment of the raised Issues- Agro Processing
cont

• Should the root cause be lack of credit, the
  shift should be on promotion of SACCOs.
• Again this should be further subjected to the
  above stated tests to be able to come up with a
  more realistic policy statement.

35
Assessment of the raised Issues- Agro Processing
cont

• A realistic policy would be formed based on
  factors that influence or regulate development of
  more sustainable and efficient functioning SACCOs
• Factors that would influence increased production
  would lead into increased income and savings,
  hence more deposits in SACCOs, which would in
  turn lead into more loans for the post harvest
  technologies.

36
Assessment of the raised Issues- Agro Processing
cont

• Mechanical injury during handling and
  transportation of fruits and vegetables is a
  serious problem
• This is more related to the causes of reported
  losses already discussed
• The causes could be poor packaging, poor roads,
  poor transportation facilities, absence of
  packaging materials, absence of credit or lack of
  knowledge/negligence etc.

37
Assessment of the raised Issues- Agro Processing
cont

• All these causes would be summed up as farmers
  ignorance in respect of working markets or lack
  of necessary capital that is required for
  purchase of proper packaging materials and
  transportation of quality produce.
• If ignorance is the problem, then the policy
  shift should be on investment in training and if
  capital is the problem then promotion of SACCOs
  would be appropriate, but these should be formed
  based on demand and should meet conditions for
  proper functioning of SACCOs.

38
Assessment of the raised Issues- Agro Processing
cont

• Other raised issues include
• Lack of quality standards in processing and
  packaging of agricultural produce
• Utilization of chemically produced products by
  agro-processing factories instead of natural
  agricultural produce
• Small/medium scale processing centers suffer huge
  loss due to erratic supplies

39
Assessment of the raised Issues- Agro Processing
cont

• Due to insufficient demand, weak infrastructure,
  poor transportation and perishable nature of the
  crops, the grower sustains substantial losses
• Inconsistent supply of vegetables and fruits to
  the market, such that during rainy season there
  is abundant supply and scarcity of the same
  during dry season

40
Assessment of the raised Issues- Agro Processing
cont

• Locally processed products fail to compete with
  imported products
• Unavailability of appropriate machinery and
  technology.

41
Assessment of the raised Issues- Agro Processing
cont

• These issues could be summed up as issues related
  to conditions necessary for working markets.
  Competitive markets would require stable supplies
  in desired quality and quantity of the
  commodities as well as presence of many buyers.
  Possible policy shift would be on
• Investment on processing, packaging, storage,
  transportation/distribution of the products
• Investment on research and development of
  new/efficient post-harvest technologies

42
Assessment of the raised Issues- Agro Processing
cont

• Should the policy shift be on investment in
  processing, packaging, storage and
  transportation, the policy formulation should
  consider the influencing factors/incentives that
  would ensure perfect competition in the course of
  processing, packaging, storage and
  transportation.
• Such incentives would include possible subsidies,
  training, and regulatory control to ensure
  quality products are produced and reach the
  markets.

43
Assessment of the raised Issues- Agro Processing
cont

• Such policies should be backed up by periodic
  policy evaluation to assess their impacts on
  rural incomes.

44
Assessment of the Proposed Policy statements for
Agro-Processing (Policy under Review)

• Before attempting to do the assessment of the
  proposed policies in slides 10 through 12 above,
  better we define what a policy is as far as
  agriculture is concerned.
• Agriculture Policy should consist of decisions
  that influence the level and stability of output
  and input prices, public investments affecting
  agricultural revenues and costs, and the
  allocation of research funds to improve farming
  and processing technology.

45
Assessment of the Proposed Policy statements for
Agro-Processing (Policy under Review) cont

• This definition attempts to caution policy makers
  that any statement made by the government should
  be measured against impact on
• output and input prices,
• revenues and costs, and
• efficiency in the course of production,
  processing and marketing

46
Proposed Policy statements for Agro-Processing
(Policy under Review) cont

• This definition justifies policy shifts to
  promotion of the use of efficient technologies
  with consideration of the impact on budget
  transfers (subsidy or trade policy-import/ export
  restrictions) and investment in public services
  (research and extension,roads to markets etc)
• Such policy shifts should consider
• implementation costs, efficiency gains, trade
  effects and impact on government objectives.
• Impact on investment policies (research/extension/
  development of new technologies and
  infrastructural development (market roads)

47
Proposed Policy statements for Agro-Processing
(Policy under Review) cont

• By cross assessment of the proposed policy
  statements (slides 10-12), the policy statements
  emphasize on promotion of access to capital
  (bullets 1,2 6), on training and access to
  technologies (34) and on promotion of
  competitive markets (5,7 8).
• The policy statements assume that the target
  farmers face the problems of shortage of capital,
  need for capacity building and there is lack of
  working markets

48
Proposed Policy statements for Agro-Processing
(Policy under Review) cont

• While the policy statements seem to be
  appropriate, they are not formulated on the basis
  of performance, efficiency and implementability
  (formation of sustainable production and
  marketing chains/systems)
• These do not look into the effects of
  implementation costs, efficiency gains, trade
  effects and impact on government objectives.

49
Proposed Policy statements for Agro-Processing
(Policy under Review) cont

• The policy statements depict a picture of supply
  driven economy rather than they would be
  demand/market oriented economy.
• Government policies should take the lead in
  provision of public investments while creating
  better environment that will promote private
  sector involvement/investments. This calls for
  policy shits to market economy.

50
Conclusion

• Based on the above discussion, it appears that
  the market forces have failed to support growth
  of the required services and technology
  development
• As long as our main focus is the small farmer,
  promotion of the use of post harvest technologies
  has to reflect the situation under the
  smallholder farming environment

51
Conclusion cont

• The environment of smallholder farming can be
  explained as follows
• Partially integrated into markets
• High degree of imperfection of the markets which
  the small farmers confront
• Multi-activity character of farmers- non-farm
  activities some of which are non market tasks,
  and some of which rely on working markets e.g.
  crafts for sale
• Small farmers societies participate in exchange
  with the larger systems, and that small farm
  productions are exposed to market forces

52
Conclusion cont

• Post harvest technology use will have impact on
  smallholder households only if policies provide
  measures to reduce market imperfections under the
  smallholder farmers
• Policies should be formulated as a result of
  recommendations from impact assessment and
  evaluation studies.
• There is a significant shortfall of data and
  information that hamper evaluation of policies

53
Conclusion cont

• Rural markets are imperfect, the prices of goods
  or services will not reflect their true scarcity
  value, hence policies should promote services to
  remove this market imperfection.
• Farmers must have good incomes before they can
  sustain the use of technologies, including
  post-harvest technologies, hence policy should
  consider multidimensional characters of
  agricultural production and market chains.

54
Recommendations

• The inputs and outputs of small farms are subject
  to valuation by the wider market at prevailing
  prices, hence policies should take note of this
  fact.
• Agricultural policy formulation/policy statements
  for the post-harvest technologies should consider
  examination of the
• Microeconomic behavior of producers reflecting
  the production and marketing chains
• Marketing and trade related to technologies
• Macroeconomic linkages
• Exchange rates, Wage rates and Interest rates
  etc.

55
Recommendations cont

• Market failure develops when private sector is
  unable to develop the institutions necessary for
  efficient market functioning. Markets fail
  because of
• Lack of market information
• Small number of consumers/suppliers influencing
  the prices
• Buyers or sellers having no other market outlets
• Existence of externalities influencing high cost
  of production or low benefits from production
  activities e.g. soil erosion, environmental
  pollution etc

56
Recommendations cont

• Responding to the above findings, it is
  recommended to engage the service of qualified
  policy analyst to commission policy studies that
  will lead into necessary/appropriate policy
  shifts
• There is need to build the capacity of the staff
  who are involved in policy formulation
• Monitoring of the implementation of the policy is
  necessary for prompting the need for policy
  review.

57
Recommendations cont

• Monitoring and evaluation of policies should
  receive adequate annual budget.

58
THE END