National Key Result Area (NKRA) Agriculture Lab

Transcription

1 National Key Result Area (NKRA) Agriculture Lab

2 Commercial farming 1 25 Commercial farming deals for paddy and sugarcane Smallholder aggregation Professionally managed collective rice irrigation and marketing schemes 275 Collective warehouse based marketing schemes COWABAMA 1

3 1 There are very few large scale-farms in Tanzania today, concentrated in a few regions Large-scale commercial farm above 4,000 hectares Kagera Sugar Company (12,000 ha) Kagera Mwanza Shinyanga Mara Arusha Kilimanjaro T.P.C Estate (7,600 ha) Kigoma Rukwa Tabora Mbeya Singida Dodoma Iringa Manyara Ruvuma Tanga Morogoro Pwani Lindi Mtwara Zanzibar Dar Es Salaam Mtibwa Sugar Estate (7,500 ha) Kilombero Sugar(K1) (5,000 ha) Kilombero Sugar(K2) (5,000 ha) Kilombero Plantation (4,000 ha) 2

4 1 The business environment is not attractive for investors Land Infrastructure Policy and governance We have been here for 7 years, and still do not have the land title The process to obtain land title and derivative rights is cumbersome and not well communicated to investors There are no access roads to the farm We have to build irrigation infrastructure not only for ourselves but also for our outgrowers There is no reliable power supply The government decided to allow the import of 120,000 tonnes of tariff-free rice, as a result, the price of rice has dropped, and this might put us out of business The government need to honor the contract that they sign- they did not renew the incentives they promised We were supposed to have water rights for 20 years, but now we are being told that it expires in 5 years We have to work with so many different government departments and no one feels accountable to ensure that due processes are adhered to The cess tax is a huge disincentive for investment and smallholders alike 3

5 1 25 commercial farming deals for paddy and sugar have been identified Pilot sites Districts identified for commercial paddy and sugarcane Kagera A H Mwanza Mara Arusha Shinyanga Kilimanjaro C Kigoma Manyara Tabora B Tanga I Dodoma Zanzibar Singida F Rukwa Dar Es Morogoro J Iringa Salaam Pwani Mbeya E D K Ruvuma Lindi G Mtwara District A Karagwe B Kasulu C Kibondo D Kilombero E Ludewa F Morogoro G Mtwara H Musoma I Pangani J Rufiji K Ulanga Site No Site Crop Land size of nucleus farm Land size of smallholder 1 Kitengule Sugarcane 16,000 2,000 2 Kasulu Sugarcane 20,000 2,000 3 Kumsenga/Kibwie Sugarcane 20,000 5,000 4 Kiberege Sugarcane 20,000 10,000 5 Kihansi, Paddy 5,200 8,000 6 Mpanga-Ngalimila Paddy 5,128 16,203 7 Ruipa Sugarcane 13,000 6,500 8 Kisegese Paddy 10,000 15,188 9 Manda Sugarcane 20,000 5, Kisaki Sugarcane 20,000 10, Mkulazi Sugarcane 50,000 25, Mkulazi Sugarcane 50,000 25, Mvuha Sugarcane 20,000 10, Mahurungu Sugarcane 3,000 2, Ikongo Sugarcane 12,000 3, Pangani Sugarcane 3,200 1, Lukulilo Paddy 8,000 4, Mkongo Sugarcane 22,000 7, Muhoro Sugarcane 20,000 16, Rufiji Delta Paddy 5,000 13, Tawi/Utunge Sugarcane 20,000 5, Itete Paddy 10,000 30, Kilosa kwa mpepo Paddy 5,000 18, Misegese Paddy 5,000 15, Ngohelanga Paddy 6,000 15,000 1 Bagomoyo site not included in list as deal is close to being complete 4

6 1 However, there are a number of bottlenecks in the pipeline and most sites are stuck due to issues with acquiring land title The deal pipeline Only Mukulazi site has land title 15 B 1 Begin farming Acquire land title Environmental impact assessment Build infrastructure Engage outgrowers Obtain permits (e.g water permit, business license) Obtain agreements (e.g. PPA, implementation agreement) 1 Bagomoyo site not included in list of 25 sites as deal is close to being complete, but investors are currently being held back due to issues relating to agreements 5

7 1 Access to land and an enabling business environment are needed to ensure investments into 25 sites Action Description Result i Create a Special Lands and Infrastructure Task Force A temporary cross-agency team to accelerate securing land title, building infrastructure and conducting agro-ecological studies for 25 land parcels 25 sites ready for investment CCROs for smallholders ii Conduct community engagement Conduct pre engagement training to educate communities on business, good agriculture practices and farmer organization Communities ready for engagement with investors iii Develop standard tender assessment criteria and Term Sheet Create standard meritocracy assessment criteria to award sites to investors Create prototype Term Sheet including investment incentive package, terms and conditions and KPIs 25 high quality commercial agriculture investors iv Uplift mandate of TIC and Investor Complain Bureau Dedicated unit within TIC responsible for attracting investors, coordinating applications, addressing complains and monitoring compliance Efficient one stop center for investors, and avenue to address investor issues Together with selected interventions ensuring availability of rice seed and developing industry associations we believe that 25 deals can be pushed through the pipeline by

8 i The Special Land and Infrastructure Task Force will be a cross-agency body Organization of the Task Force Working model Oversight: PDB Chairperson: PMO Members: MAFC MLHHSD Min of Works Min of Water Min of Finance Min of Energy and Minerals Min of Industry Trade and Marketing POPC NEMC TIC RUBADA National Land Use Planning Commission SAGCOT Sugar Board of Tanzania Task Force will break cross-agency silos by ensuring that the right people are in the room at the same time Scheduled to be in operation to Jan 2015, when construction of to-farm infrastructure for the last 5 sites commences Appointment letter will be sent to relevant Directors, Commissioners, and Director Generals, who will appoint individuals from their organization/unit to the Task Force Consist of both permanent (to Jan 2015) and temporary members Most members will be seconded to the Task Force from their relevant agencies on a part-time basis (exact number of days per week TBD) Incentives to ensure attendance to be reviewed 7

9 i The mandate of the Task Force will be to secure titles and build infrastructure and ensure environmental suitability Secure land title Mandate of the Task Force Ensure consistency of boundaries in map of different agencies Conduct community engagement and inform them of development plans Conduct reconnaissance and agriculture survey to identify and demarcate land for investment Gazette area to change status of land from village land to general land Conduct compensation and resettlement Titling of land Build infrastructure Ensure soil and water suitability Determine infrastructure needs and plan for "to farm" infrastructure development (access roads, electricity, bridges) Finalize budget needed for infrastructure development Syndicate infrastructure plans with DPs and determine potential areas for collaboration Tendering process for the construction of infrastructure Oversee construction of infrastructure Conduct soil survey and develop detailed land management plans Establish mechanism (e.g. virtual library) to share relevant soil and water data Model environmental impact based on existing data Generate necessary environment information (SEA and/or IEA) for investment Develop monitoring and reporting mechanism to ensure environmental compliance 8

10 ii There will be at least 4 visits to each site, prior to investors coming in, to ensure sufficient community engagement Visit no. Purpose of visit Length of visit Team conducting visit Meet with District Council and Village Assembly to inform them of investment plans Reconnaissance survey to confirm availability of land and infrastructure needs Verification of Land Use Plans Community consultant on Customary Certificate of Right of Occupancy Demarcate site and erect beacons Conduct Soil survey Environmental analysis Social analysis Training needs assessment Pre-engagement training on the issues of Environmental sustainability Conducting businesses Farmer organization Good agriculture practices 8 days Subset of Task Force 7 days Subset of Task Force Technical team 14 days Soil survey team Environmental analysis team Social analysis team Training needs team 16 days Consultant team Additional visit to conduct other activities (e.g. compensation and resettlement) will take place as necessary 9

11 iii A standardized proposal evaluation criteria, Term Sheet and M&E process will be developed to expedite investments Steps with planned changes Description Agency in charge No. of days in step Tender sites for investors to bid on Existing TIC process for advertising and tendering sites for investment will be used for the 25 sites Assess proposals and award tender New set of assessment criteria, in a detailed scorecard including: Company background Economic value of project Level of technical sophistication of project Community involvement plans Provision of smallholder financing Sign Term Sheet and additional incentives Includes detailed sets of responsibilities for both the government (e.g. provide titled land, provide stable policy environment etc.) and the investor (e.g. capital investment, build on farm infrastructure, aid in M&E etc.) Monitoring and evaluation of project Company to submit report every 3 months TIC and MAFC to conduct site survey every 3 months to ensure implementation of project is going according to plan Strict sanctions and penalties for noncompliance TIC TIC TIC, NISC TIC & MAFC 30 days 6 days 4 days Every 3 months New TIC process to tendering and awarding sites, using best practice timeframes 10

12 iii Drafts of list of target investors, assessment criteria, term sheet, and M&E criteria have been developed in the lab Tender sites for investors to bid on Assess proposals and award tender Sign Term Sheet and additional incentives Monitoring and evaluation of project Screen shots Description Prioritized list of both international and local potential investors to send invitations and notifications of tender announcements to Detailed scorecard to assess applications of potential investors, with weighted scores for each criteria List of responsibilities of both government and investors to be detailed out by relevant agencies and approved by NISC Draft criteria to be assessed in M&E processes, based on assessment scorecard To be finalized by a consultant 11

13 iii Drafts of the assessment criteria, Term Sheet and M&E have been developed, and will be finalized after syndication with stakeholders Term Sheet example Summary of draft Term Sheet Responsibilities of the government Responsibilities of the investor Facilitate acquisition of tilted land and Land Provide investment capital, including for Equity deal (i.e. Acquire 20% shares in the injecting equity of not less than 30% of project for subsequent sale to the public, and total project cost oversee acquisition by out-growers of a further Develop on-farm infrastructure e.g. 5% shares) irrigation facilities, roads Aid in community engagement. e.g. Create Provide suitable technology, management community awareness; Facilitate conducive and trained manpower environment for compensation and resettlement; Adhere to laws and regulations. e.g. Support EIA for out-grower schemes; Facilitate Pay land rent annually as stipulated; Carry establishment of farmers organizations; Provide out Environmental Impact funds for community engagement Assessment/Strategic Environmental Facilitate the procurement of required Assessment permits/approvals. e.g. Company Registration; Conduct responsible community Residence permits class A & B for a restricted engagement. e.g. Provide community number of staff support to out-grower schemes (inputs, Issue incentives. e.g. Exemption of import extension services, technology transfer); duties during project implementation, corporate Prepare and implement a program for tax exemption, withholding tax on dividends skills transfer/training of Tanzanians; (dependent on merit of project) Abide by all obligations under out-grower Monitor implementation of investor s Business or contract farming Plan Aid in M&E e.g. Provide periodic Provide a stable policy environment, including implementation reports to the government; ensuring transparency on import and export Submit audited final accounts to TIC or permits or market liberalization policies; any other relevant authority Coordinate discussion forums regularly Steps to finalize Term Sheet Send draft term sheet to relevant agencies (TIC, TRA, TPSF, MOF, Agriculture Council of Tanzania, SAGCOT center, RUBADA) Conduct workshop to gather feedback on Term Sheet Modify Term Sheet based on feedback Send Term Sheet to NISC Technical Committee Finalize Term Sheet based on Technical Committee feedback NISC to give final approval on Term Sheet 12

14 iv Current bodies need to be improved in order to facilitate investments FROM Current mandate A facilitation body that assists investors in necessary applications TO Proposed changes Dedicated unit, overseen by PDB, to receive and take ownership of all applications (forwards them to line ministries and ensures that applications are processed in due time) Tanzania Investment Centre No mandate to grant approvals or oversee applications in line ministries Current 14 day system that automatically grants approval if line ministries do not respond within 14 days is not enforced Unit implements online tracking system with line ministries to show where applications are sitting, relevant person in charge and how long application has been pending Automatically raises issues to Investors Complain Bureau if applications have taken longer than allocated time Raises other complaints e.g. sudden policy changes, to Investors Complain Bureau Investors Complaint Bureau Meets on an ad hoc basis, subject to the Prime Minister s availability No transparency on complaints in the pipeline that needs to be addressed Bureau disciplined to meet monthly Implement online tracking system to show complains that need to be addressed and how long they have been in the pipeline 13

15 1 The Agriculture Lab already accelerated initiatives to close the Bagamoyo Eco-Energy project Large scale iconic project in Tanzania, with high potential impact At risk because of bureaucracy and Government inefficiency The lab used a pressure cooker to resolve issues Ensured AG Chambers provided immediate feedback on Land lease and Right of Occupancy Negotiated water rights from 5 years to 30 years on behalf of Investor Production of 150,000T of sugar, 11,000cbm ethanol and 32MW electricity 2,300 direct jobs, 10,000 indirect jobs 2,000 outgrowers producing about tonnes of sugar Part of working group to accelerate Implementation and Shareholder s Agreement Raised issue to the President to increase pressure and awareness 14

16 1 The development of the rice and sugar industries require increasing the availability of rice seeds, and developing industry associations Issues Lack of good quality rice seeds suitable for Tanzania to meet commercial and smallholder farm targets Private sector players have lack of incentive to produce rice seeds due to seed saving practices Solutions MAFC to engage the Agriculture Seed Agency (ASA) and private seed companies to produce certified seeds Creation of the Rice Seed Sub- Fund under the Input Fund to provide soft loans to rice seed companies Lack of coordination amongst the players in the rice and sugarcane value chain, leading to weak lobbying power and industry representation Work with existing stakeholders (e.g. TARIPA) to facilitate players in the industry to develop rice and sugar associations 15

17 1 Commercial rice production will allow Tanzania to be a large exporter of rice Production from BRN projects ESTIMATES Production and consumption of rice, Million tons production BAU increase BRN production Total 2015 production Total 2015 BAU consumption increase BRN production 2020 production 2020 consumption Export of rice could more than triple from 0.9 million MT to 3.1 million MT from 2015 to 2020 Assumptions: Constant growth rate of 4% CAGR for consumption and 7% for BAU production, based on historical growth rates; 1 st year of harvest: 2 ton/ha for outgrowers, 4 ton/ha for nucleus farm, 50% of outgrower area in production, 40% of nuclear are in production 2 nd year of harvest: 3 ton/ha for outgrowers, 5 ton/ha for nucleus farm, 60% of outgrower area in production, 70% of nuclear are in production 3 rd year of harvest: 4 ton/ha for outgrowers, 6 ton/ha for nucleus farm, 70% of outgrower area in production, 90% of nuclear are in production 4 th year of harvest: 6 ton/ha for outgrowers, 8 ton/ha for nucleus farm, 80% of outgrower area in production, 100% of nuclear are in production 5 th year of harvest: 8 ton/ha for outgrowers, 10 ton/ha for nucleus farm, 100% of outgrower area in production, 100% of nuclear are in production 6 th year of harvest onwards: 10 ton/ha for outgrowers, 4 ton/ha for nucleus farm, 50% of outgrower area in production, 100% of nuclear are in production 16

18 1 Commercial sugarcane production will allow Tanzania to be a large exporter of sugar Production from BRN projects ESTIMATES Production and consumption of sugar, Million tons production BAU increase BRN production Total 2015 production Total 2015 BAU consumption increase BRN production 2020 production 2020 consumption Tanzania could move from a net importer to a large net exporter of sugar, supplying close to 4 million MT to the international market Export of rice could more than triple from 0.9 million MT to 3.1 Assumptions: Constant growth rate of 4% CAGR for consumption million MT and from 7% for 2015 BAU production, to 2020 based on historical growth rates; 1 st year of harvest: 5 ton/ha for outgrowers, 8 ton/ha for nucleus farm, 50% of outgrower area in production, 40% of nuclear are in production 2 nd year of harvest: 6 ton/ha for outgrowers, 9 ton/ha for nucleus farm, 60% of outgrower area in production, 70% of nuclear are in production 3 rd year of harvest: 7 ton/ha for outgrowers, 10 ton/ha for nucleus farm, 70% of outgrower area in production, 90% of nuclear are in production 4 th year of harvest: 8 ton/ha for outgrowers, 11 ton/ha for nucleus farm, 80% of outgrower area in production, 100% of nuclear are in production 5 th year of harvest: 10 ton/ha for outgrowers, 11 ton/ha for nucleus farm, 100% of outgrower area in production, 100% of nuclear are in production 6 th year of harvest onwards: 11 ton/ha for outgrowers, 11 ton/ha for nucleus farm, 50% of outgrower area in production, 100% of nuclear are in production 17

19 The implementation of commercial deals will take place in waves Lessons from Wave 1 will be carried into Wave 2 and 3 ESTIMATES Wave 1 (pilot) Now Apr 2014 Sites: Lukulilo, Mkongo, Mpanga-Ngalimila, Muhoro, Tawi/Utunge, Bagamoyo Wave 2 Aug 2013 Oct 2014 Sites: Kiberege, Kisaki, Misegese, Mvuha, Ruipa, Itete, Kilosa kwa mpepo, Kisegese, Mkulazi, Ngohelanga Wave 3 Dec 2013 Apr 2015 Sites: Kihansi, Mahurungu, Mkulazi, Pangani, Rufiji Delta, Ikongo, Kasulu, Kitengule, Kumsenga/ Kibwie, Manda No. of deals Paddy No. of ha 33, ,000 45,000 No. of tons (of which by 2015) 333,000 (46,000) 1,292,000 (0) 447,000 (0) Sugar cane No. of deals No. of ha 90, , ,000 No. of tons (of which by 2015) 1 Includes Bagamoyo site 1,265,000 (150,00) 2,030,000 (0) 1,240,000 (0) 18

20 Commercial farming 1 25 Commercial farming deals for paddy and sugarcane Smallholder aggregation Professionally managed collective rice irrigation and marketing schemes 275 Collective warehouse based marketing schemes COWABAMA 19

21 2 Existing irrigation schemes face a number of challenges resulting in low yield and incomes for rice smallholders Land and infrastructure Extension services Inputs Market Key issues Land mapping not carried out for small plots in selected irrigated areas Inadequate funding for smallholder irrigation development Inadequate skills to manage smallholder irrigation schemes Underdevelopment of irrigation potential area with improved irrigation infrastructure Underutilization of irrigation land Low supervision of crop management at scheme level Low knowledge of rice management of farmers and extension officers Lack of transport facilities to extension officers and irrigation technicians Poor availability and access to inputs by smallholders Existence of poor quality inputs in the market Poor application or use of inputs Little usage of improved/high yielding varieties Inadequate usage of mechanisation among smallholder farmers Poor or unavailability of storage facilities Poor processing facilities Poor marketing structure Unreliable outputs markets Lack of accountability for underperformance of government officials Yields and incomes are low 20

22 2 Structure of Irrigators Organisation (IO) General Meeting New to structure Technical Management Team Internal Auditor Executive Committee Technical Management Team Private Service Provider Treasurer Secretary Technical Manager Planning and Finance Sub- Committee Agriculture & Environment Commitee Construction Operation & Maintenance Commitee Irrigation Technician Warehouse Operator Extension Officer Block leaderships 21

23 2 The private service provider will play a catalytic role in this model Private Service Provider Roles and responsibility Build capacity of irrigators organization (IO) and smallholder farmers to take over the management after 2 years. Provide various trainings related to leadership skills, financial management, record keeping, agronomic skills, post-harvest handling, marketing etc Organise bulk purchase of inputs in collaboration with IO Organise storage of paddy for collective marketing Work together with IO to look for potential buyers Link the IOs warehouses with the Commodity Exchange (COMEX). Work with IO to identify and engage high grade processors for better marketing Identify and engage mechanization services Recruit technical team, including Technical Manager, Extension Officer, Irrigation Technician and Warehouse Operator Hire consultants, and other business development services (BDS) providers to provide various business development services to the IO and all users of the scheme Conduct different studies/research work including market surveys, baseline surveys, inventory of warehouses and processing facilities in the target area Contact branding companies and Market Information Service providers Link IOs to financial institutions Incentives required to perform Timely payment Relationship with other key stakeholders Executive Committee (IO) Private Service Provider Technical Manager Qualifications At least 2 years experience working with small holder farmers in Tanzanian environment Must have technical capacity to cover at least one district out of 8 Must have skills to organize smallholder farmers and link them to markets Performance managed by Local Government Authority 22

24 2 We have selected the following districts to pilot the smallholder irrigation schemes for paddy Smallholder paddy pilot districts Number of schemes Current yield (MT/ha) Mvomero 3 Mvomero 4.2 Mpanda DC 7 Mpanda DC 3.4 Morogoro R 4 Morogoro R 3.9 Mpanda Mvomero Kilosa Mbarali 35Mbarali 3.9 Iringa Rural Morogoro Rural Kyela 2 Kyela 4.3 Mbarali Kilombero Kilosa 8 Kilosa 4.2 Kyela Kilombero 8 Kilombero 3.6 Iringa R 11 Iringa R

25 2 There are a number of tasks that need to be carried out along the value chain/by each stakeholder to enable this model to work 1 Sensitization on the Model MAFC to convene a 2 days awareness creation seminar on the model to key stakeholders in 4 regions and 8 districts MAFC to conduct a one day seminar to each of the 8 districts LGA to sensitize targeted communities in 78 schemes LGA to establish and strengthen Irrigators Organisation (IO) 2 Implementation of the Model Targeted 78 schemes to confirm and apply for the services MAFC to prepare TOR for private service provider and tender documents for 78 schemes MAFC to advertise tender and shortlist private service providers to implement the model MAFC & LGA to do joint recruitment of private service providers LGA to conduct orientation of private service providers on the model and site possession Private service provider to provide services as per TOR Cabinet to resolve establishment of the Legal Framework for Irrigation Development Ministries responsible for Irrigation and Civil Service to establish the National Irrigation Commission for accelerated irrigation development in Tanzania 24

26 2 There are a number of tasks that need to be carried out along the value chain/by each stakeholder to enable this model to work 3 4 Land Use Planning and Titling Construction of irrigation infrastructure, warehouses and farm roads National Land Use Planning Commission to develop Village Land Use Plans in 78 schemes Ministry of Lands to establish registries for District and Village Land Registries for 8 districts Ministry of Lands to provide equipment and materials for District and Village Land Registries Ministry of Lands to prepare and issue CCROs to farmers in 78 schemes PMO-RALG to establish District Irrigation Development Department (DID) at LGA DED to conduct baseline survey (social, soil, topo, water resource, agronomy, economic, environmental studies) DED & ZIO to prepare tender document and advertise (construction of irrigation infrastructure and IO office) DED and ZIO to recruit contractor for the construction/rehabilitation of irrigation infrastructures and IO Office Contractor to construct/rehabilitate irrigation infrastructure and IO Offices in 78 schemes Zonal Irrigation Office & LGA to supervise the construction of irrigation infrastructure and IO Office District Council to prepare tender documents and sign contract for construction/rehabilitation of warehouses 25

27 2 There are a number of tasks that need to be carried out along the value chain/by each stakeholder to enable this model to work 4 5 Construction of irrigation infrastructure, warehouses and farm roads (cont.) Capacity building of extension service providers District Council to recruit contractors for construction/rehabilitation of warehouses in 78 schemes Contractor to construct/rehabilitate warehouses in 78 schemes Tanzania Building Agents to supervise construction of warehouses District Council to prepare tender documents for rehabilitation/upgrading of farm roads District Council to recruit contractors to rehabilitate/upgrade farm roads Contractor to rehabilitate/upgrade farm roads District Irrigation Engineer to supervise rehabilitation/upgrade of farm roads Strengthening of LGA Strengthening of Zonal Irrigation Office Training institutions to retrain extension officers and irrigation technicians in 78 schemes Extension officer/input companies to establish farmers field school Training institutions to train lead farmers on GAP (Good Agricultural Practices) - 5 farmers per scheme Lead farmers/extension Officer to train farmers at scheme level Private service provider to provide transport logistics (motorbikes) and working facilities to extension officer and irrigation technician in 78 schemes 26

28 2 There are a number of tasks that need to be carried out along the value chain/by each stakeholder to enable this model to work 6 Contracting input suppliers, mechanisation and financial institutions Executive Committee (IO)/ Management to establish demand for inputs Seed companies to produce the selected improved seed for 78 schemes Technical Manager and Executive Committee (IO) to identify, negotiate and enter into procurement contract with input suppliers Technical Manager and Executive Committee (IO) to negotiate with LGA for government input subsidy Technical Manager and Executive Committee (IO) to identify financial institutions and conditions for loans Technical Manager to facilitate negotiations between the financial institutions and IO for loans Technical Manager and Executive Committee (IO) to identify and contract provider of mechanization services 7 Warehouses Management and Market Linkages Private service provider to identify and prepare inventory of existing warehouses, owners and processing facilities Private service provider to conduct market survey Executive Committee (IO) to sign contract with warehouse operator Private service provider to procure basic warehouse equipment Private service provider to recruit warehouse workers Technical Manager to sign contract with processors and buyers Private service provider to establish market information system Technical Manager to identify and contract branding companies 27

29 2 There are a number of tasks that need to be carried out along the value chain/by each stakeholder to enable this model to work 8 Establishment of commodity exchange and inclusion of rice as priority Cabinet to resolve establishment of Commodity Exchange in Tanzania and approve establishment of Commodity Exchange of Tanzania secretariat under Ministry of Industry and Trade (MIT) Commodity Exchange of Tanzania secretariat to collect all studies on COMEX including the Roadmap Commodity Exchange of Tanzania secretariat to prepare system design Commodity Exchange of Tanzania secretariat to establish a trading floor using consultants Rice to be among the commodities to be traded in Commodity Exchange of Tanzania Service provider to link rice warehouses to Commodity Exchange 28

30 2 By 2015, the lab aims to increase yield to 8MT/ha, impacting 60,000 ha and 70,000 smallholder households Productivity 8MT/ha 6MT/ha 4MT/ha 2013 Income (TZS mil/ha)

31 2 It is expected that smallholder farmers will have increased income with the new approach RICE EXAMPLE Yield (tons per ha): 4.0 Current situation X Amount consumed on-farm 1 (tons per ha): 0.8 Marketed amount (tons per ha): 3.2 Farm-gate price ( 000 TZS per ton): 800 Cash revenue ( 000 TZS per ha): 2,560 Cash cost 2 ( 000 per ha): 950 Under the current practices, a typical smallholders in irrigated area is earning cash profit of TZS1.6 million per ha Cash profit ( 000 per ha): 1,610 Expected condition under proposed model X Yield of ~8 tons per ha ~10% lower yield due to unforeseen circumstances Yield (tons per ha): Amount consumed on-farm 1 (tons per ha): Marketed amount (tons per ha): Farm-gate price ( 000 TZS per ton): Cash revenue ( 000 TZS per ha): 5,120 4,608 Cash cost 2 ( 000 per ha): 2,360 2,360 Cash profit ( 000 per ha): 2,760 2,248 With the proposed model, farmer s income is expected to increase by 71% under optimum condition In the case where conditions may not be so favourable, farmer can still expect income increase by 40% under the proposed model 1 Based on ~80% commercialization rate for farmers 2 Based on recommended seed and fertilizer usage SOURCE: Team s analysis 30

32 78 existing smallholder rice irrigation schemes will be impacted under the new model, impacting 70,000 smallholder farmers over 60,000ha Productivity 8 districts are selected for the first phase 8MT/ha 6MT/ha 4MT/ha Mpanda Mvomero Kilosa Mbarali Iringa Rural Morogoro Rural Kilombero Smallholder income (TZS mil/ha) Kyela Number of schemes Mvomero Mpanda DC Morogoro R Mbarali Kyela Kilosa Kilombero Iringa R Mvom Mpand Morog 35Mbarali Kyela Kilosa Kilomb Iringa R Current yield (MT/ha)

33 The model will introduce a private service provider in each district to manage the schemes while building Irrigator Organisations capacity over the course of 2 years Change agent Existing structure Proposed model Ministries, PMO-RALG and Local Government Authority Irrigators Organisation (IO) Financial Institution Input Supplier & Mechanisation Buyers Irrigators Organisation (IO) Ministries, PMO-RALG and Local Government Authority Private Service Provider Financial Institution Input Supplier & Mechanisation Buyers Smallholder farmers Processor Warehouse Smallholder farmers Warehouse Processor Currently, IO is responsible for management of irrigation service Smallholder farmers operate individually and have poor linkages with other key stakeholders Private service provider will be hired to provide technical and management support to the IO IO will be facilitated by private service provider to be the aggregation medium linking farmers to the key stakeholders 32

34 The private service provider will play a catalytic role along the value chain The private service provider is hired on annual contract, renewable depending on performance The private service provider will recruit technical managers, warehouse operators, irrigation technicians and extension officers to form the Technical Management Team that supports the IO Technical Management Team Private Service Provider Technical Manager Inputs Organizing bulk purchase of inputs in collaboration with IO Identify and engage mechanization services Link IOs to financial institutions Extension services Land tenure not secured in selected irrigated areas Extension services Prepare inventory of warehouses and processing facilities Organizing storage of paddy in a given warehouse for collective marketing Working with IO to identify and engage high grade processors for better marketing Extension services Conduct different studies/research work including market and baseline surveys Working together with IO to look for potential buyers Contact branding companies and Market Information Service providers Link the IOs warehouses with the Commodity Exchange (COMEX) Irrigation Technician Warehouse Operator Extension Officer Capacity building of IO Bringing best practices and introducing professional management to the IO Provision of various trainings related to leadership skills, financial management, record keeping, agronomic skills, post-harvest handling, marketing for IO to be able to take over the management independently after 2 years Hire consultants and other business development services (BDS) providers to provide various business development services to the IO and all users of the scheme 33

35 For the model to work, some key activities have been identified Key Activities 1) Sensitisation Of Model 2) Implementation Of Model 3) Land Use Planning And Titiling 4) Construction of Infrastructure 5) Capacity Building Of Extension Service Providers 6) Contracting Input Suppliers, Mechanisation And Financial Institutions 7) Warehouses Management And Market Linkages 8) Inclusion Of Rice In Commodity Exchange Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Responsible MAFC, LGA MAFC, LGA Ministry of Lands LGA Private Service Provider Executive Committee (IO), Technical Manager Private Service Provider Ministry of Industry and Trade 34

36 Total budget required for the smallholder rice irrigation schemes to work is TZS333.9 bil for Private sector Budget required (TZS mil) Public (DE) Public (RE) DP (DE) DP (RE) TZS252,756 mil TZS68,701 mil TZS12,435mil 35

37 Overview Recommendations 36

38 Charter - Smallholder model for rice Objective Rationale To increase production, productivity and marketing for smallholder rice farmers in irrigation schemes Expected impact (KPI and targets) Demand for rice is increasing at national and regional levels. We seek to make Tanzania a rice granary for the Eastern Africa region. For the first wave, we have prioritised the following areas based on selected criteria: Morogoro Mbeya Rukwa/Katavi Ruvuma Given the need for Big Results Now in the next two years, we focus on ongoing irrigation initiatives with big government commitment i.e. SAGCOT areas Key deliverables i ii Lab charter Case for change Existing situation iii Stakeholder mapping iv Data gathering comparison with best practices v Lab recommendation 3 feet vi Constraints budget, human resources, environment vii Individual KPI Yield from 4 MT/ha to 8 MT/ha Smallholder income from TZS1.6mil/ha to TZS2.7mil/ha Production from 240,000 MT to 480,000 MT 70,000 existing smallholder households impacted 60,000 hectares of area covered Funding and other support Government of Tanzania Development Partners Private Sector Stakeholders / key syndication required Ministry of Agriculture, Food Security and Cooperatives, Ministry of Land, Prime Minister s Office, Local Government Authorities Smallholder farmers/ organisations Development Partners NGO/ CBO/ Private sector Input suppliers Processors Buyers Financial institutions Owner(s) Ministry of Agriculture, Food Security and Cooperatives Prime Minister s Office Local Government Authority 37

39 Rice in Tanzania is already self sufficient with projection that further growth in rice production will be exported Production (MT) % Rice 171% 177% 182% Production Requirement % Self sufficiency ratio / / / / /15 SOURCE: MAFC, Team s projection 38

40 Currently, there are several major programmes impacting the paddy crop in Tanzania (1/2) Existing programme Description Owner Area Cost Policy and human resource programme Japanese grant Ministry of Agriculture, Food Security and Cooperatives 7 in SAGCOT area and 13 in other regions USD 15,000,000 Eastern Africa Agriculture Productivity Programme (EAAPP) East African Regional Programme to support Research Technological Development ASARECA All regions of Tanzania in the rice subsector USD 4,000,000 Accelerated Food Security Programme Input subsidy Ministry of Agriculture, Food Security and Cooperatives All regions of Tanzania in the rice subsector including SAGCOT area USD 160,000,000 39

41 Currently, there are several major programmes impacting the paddy crop in Tanzania (2/2) Existing programme District Irrigation Development Fund (DIDF/ASDP) Description Irrigation development at the LGA level Owner Ministry of Agriculture, Food Security and Cooperatives Area Cost All regions USD 61,800 Tanzania Agriculture Partnership Stimulate agricultural growth in Tanzania through commercial oriented activities Agriculture Council of Tanzania (Tanzania agricultural partnership programme) 50 Districts in Tanzania Mainland USD 12,000,000 Marketing Infrastructure, Value Addition and Rural Finance Support program (MIVARF) Increase financing, development of market infrastructure and agroprocessing Tanzania, IFAD1, AfDB2, AGRA Whole of Tanzania USD 150,000,000 1 International Fund for Agricultural Development (IFAD) aims to combat rural hunger and poverty in developing countries through low interest loans and direct assistance 2 African Development Bank (AfDB) Group aims to spur sustainable economic development and social progress in its regional member countries (RMCs), thus contributing to poverty reduction 40

42 Existing irrigation schemes are plagued with challenges along the value chain resulting in low yield and income Land and infrastructure Extension services Inputs Market Key issues Land tenure not secured in selected irrigated areas Inadequate investment in smallholder irrigation development Ineffective management of smallholder irrigation schemes Underdevelopment of irrigation potential area with improved irrigation infrastructure Underutilization of irrigation land Low supervision of crop management at scheme level Low knowledge of rice management of farmers and extension officers Lack of transport facilities to extension officers and irrigation technicians Poor access to inputs by smallholders Existence of poor quality inputs in the market Inadequate availability and distribution of inputs Poor application or use of inputs Little usage of improved/high yielding varieties Inadequate usage of mechanisation among smallholder farmers Poor or unavailability of storage facilities Poor processing facilities Poor marketing structure Unreliable outputs markets Lack of accountability for government officials for underperformance Yields and incomes are low 41

43 Key issues along the value chain Land and infrastructure Extension services Inputs Market Issue Challenges Recommendation Stakeholder Land tenure not secured in selected irrigated areas Farmers in some villages do not have legal rights over their farms where these schemes are found not to have land use plans Without Certificate of Customary Right of Occupancy (CCROs), farmers are not able to access credit facilities Local Government Authorities do not have sufficient capabilities to facilitate village land use planning as well as issuance of CCROs To prepare land use plans for villages with irrigation schemes Mapping rice fields and issuing CCROs to individual farmers Capacity building to district authorities to establish Department of Irrigation Village Government District Councils National Land Use Planning Commission Ministry of Lands, Housing and Human Settlements Inadequate investment in smallholder irrigation development Inadequate capacity of farmers to invest in the planning and construction of irrigation infrastructure Inadequate construction skills of farmers Low level of funding by the Government and low rate of investment by private sector in irrigation investments Climate change causes shortages of water in recent years To support the improvement of traditional irrigation schemes infrastructures including construction of dams where feasible and the software Promote awareness for the beneficiary contribution to the improvement of their irrigation scheme infrastructures Train farmers on irrigation techniques covering water management and support district staff to ensure improved agronomic practices Support development of water storage facilities to ensure reliable water supply where possible Irrigators Organisation Government of Tanzania Non- Governmental Organisation Community Based Organisations 42

44 Key issues along the value chain Land and infrastructure Extension services Inputs Market Issue Challenges Recommendation Stakeholder Ineffective management of smallholder irrigation schemes Inadequate skills on operation and maintenance resulting in water use inefficiency Low capacity of organisations and poor governance Inadequate environmental consideration during planning and implementing irrigation schemes Some of these scheme have deteriorated and where efforts for rehabilitation or upgrading of traditional schemes has been done by the government, majority of them are semi-finished due to underfunding Establish a professional management requirement Strengthen the capacity of irrigators organizations for effective monitoring and management of irrigation schemes Institute a legal framework that will require all farmers owning land in an irrigation scheme to be members of the irrigators organization Institute a mechanism that will enable Irrigators Organisations to prepare constitutions and bylaws and their effective enforcement Institute mandatory formal transactions on transfer of land from one farmer to another in an irrigation scheme Establish a mechanism for service providers in the private sector to provide services for management of irrigation infrastructure where farmers have demonstrated inadequate capacity Establish mechanisms for effective representation of scheme management systems into river basin management sub-systems Support the rehabilitation, remodeling and upgrading of semi-finished irrigation schemes on the basis of cost sharing Irrigators Organisation Government of Tanzania Non- Governmental Organisation Community Based Organisations 43

45 Key issues along the value chain Land and infrastructure Extension services Inputs Market Issue Challenges Recommendation Stakeholder Underdevelopment of irrigation potential area with improved irrigation infrastructure Ineffective involvement of the private sector in large scale commercial irrigation undertakings The identified irrigation potential area has not been accurately and exhaustively mapped and demarcated Farmers lack irrigation skills Challenge to introduce the cost sharing and recovery mechanisms To promote the demand-driven irrigation scheme identification Undertake mapping and demarcation of the potential land for new irrigation schemes development Provide assistance for the development of the area targeted for irrigation expansion in collaboration with other stakeholders Assist in the mobilization, training and organization of smallholder farmers for new irrigation schemes Support in the management of newly developed irrigation schemes Establishment of effective cost sharing and recovery mechanism Irrigators Organisation Government of Tanzania Non- Governmental Organisation Community Based Organisations Underutilization of irrigation land Farmers producing one crop per year while there is potential to produce twice Farmers to be sensitized to produce a second crop where possible Irrigators Organisation Government of Tanzania Non- Governmental Organisation Community Based Organisations 44

46 Key issues along the value chain Land and infrastructure Extension services Inputs Market Issue Challenges Recommendation Stakeholder Low supervision of crop management at scheme level Few number of extension officers and irrigation technicians in the scheme as compared to the total requirement because: Poor recruitment by the government of the diploma and certificate trainees Few are employed as compared to the requirement Increased numbers of schemes increasing the demand Poor allocation of the current number of extension officers Dropouts of extension officers and irrigation technicians due to retirement and attending higher learning institutions Reallocation of extension officers and irrigation technicians due to deficiencies arising in other areas Increase number of extension officers to fill the gaps in the schemes (One extension officer for each scheme) Increase the number of irrigation technicians (One irrigation technician for each scheme) Government of Tanzania Local Government Authority 45

47 Key issues along the value chain Land and infrastructure Extension services Inputs Market Issue Challenges Recommendation Stakeholder Low knowledge of rice management of farmers and extension officers Many extension officers and irrigation technicians are insufficiently trained in irrigated rice technology basing on the Principles of Farmer Field School and Integrated Pest Management (FFS/IPM) Some of extension officers were trained long time before the current rice culture development Weak research/extension linkage Few farmers are trained on use rice management and water management Retraining of extension and irrigation technicians Recall the extension officers allocated to the respective areas for rice technology training Train farmers on rice irrigation and water use management Government of Tanzania Local Government Authority Lack of transport facilities to extension officers and irrigation technicians Insufficient transport facilities and inputs and working gears for field training and demonstration The extension officers and irrigation technicians be given transport and working gears Government of Tanzania Local Government Authority 46

48 Key issues along the value chain Land and Land and infrastructur infrastructure e Extension services Inputs Market Issue Challenges Recommendation Stakeholder Poor access to inputs by smallholders Difficulties to access credit for procuring inputs due to tough terms and conditions (stringent collateral requirements; prohibitive interest rates; high bank charges and fees; loan processing bureaucracy discourages) that cannot be met by the farmers and the agro dealers Currently the Government inputs subsidy is not as smart as it is supposed to be. This is because most of the some of the farmers who are selected to receive inputs vouchers are poor to the extent that they cannot afford topping up the vouchers Low price of agricultural produce make farmers fail to afford inputs. In most cases farmers use proceeds of crops to purchase inputs Smallholder farmers should market their crop produce through Warehouse Receipt System where it is easy to link them with financial institutions (banks, SACCOS, inputs distributors etc.) Farmers in irrigation schemes be provided with inputs subsidy vouchers Smallholder farmers are sensitized to market their crop produce through Warehouse Receipt System where they can access loans from lending institutions while waiting for the prices to go up Ministry of Agriculture, Food Security and Cooperatives District authorities Private Sector Organisation Irrigators Organisation Existence of poor quality inputs in the market Many counterfeit inputs are sold in many agro dealer shop in the country Strengthen the enforcement of the existing inputs laws (Seed Act, Fertilizer Act and Plant Protection Act) and also reviewing them to combat the emerging tricks used by defaulters Irrigators Organisation to promote inputs in bulk from reliable suppliers Ministry of Agriculture, Food Security and Cooperatives Input suppliers 47

49 Key issues along the value chain Land and Land and infrastructur infrastructure e Extension services Inputs Market Issue Challenges Recommendation Stakeholder Inadequate availability and distribution of inputs Poor roads infrastructure: rural feeder roads connecting the main roads and highways with villages lack regular maintenance, resulting into not being passable throughout the season Inefficient secondary distribution network: Agro dealers are mostly located at urban areas and along the main roads District councils take deliberate efforts to maintain feeder/rural roads to enable inputs to be transported close to farmers in irrigation schemes at all times they need Government of Tanzania District authorities Input suppliers Poor application or use of inputs Incorrect application/use of inputs: Majority of smallholder farmers cannot use/apply inputs correctly even if they know the importance of inputs use due to inadequate technical knowledge of farmers as well as agro dealers Poor fertilizer recommendation rates (one size fits all) Train farmers on good agricultural practices which includes proper use of inputs especially fertilizer and agrochemicals Train agro-dealers on handling of inputs and technical issues for them to advise farmers when buying inputs from their shops Department of Research in the Ministry of Agriculture need to conduct soil analysis in all the selected irrigation schemes and review the existing fertilizer recommendations for specific locations for better application of fertilizer Government of Tanzania District authorities Non Governmental Organisations 48

50 Key issues along the value chain Land and Land and infrastructur infrastructure e Extension services Inputs Market Issue Challenges Recommendation Stakeholder Little usage of improved/high yielding varieties Many farmers use their own saved seeds (mixed/local varieties) which may not be high yielding Promote use of few selected high yielding seed varieties such as SARO 5. Availability of improved rice seeds can be attained through sensitization e farmers in groups or individual to produce Quality Declared Seeds (QDS) and sell to agro-dealers or direct to farmers in same locality Ministry of Agriculture, Food Security and Cooperatives (Agriculture Seed Agency) Farmers (produce Quality Declared Seeds (QDS)) Tanzania Official Seed Certificate Institute (TOSCI) Inadequate usage of mechanisation among smallholder farmers Use of hand hoes by farmers in the schemes in farm operations (cultivation, weeding etc.) Establishment of privately owned mechanization service centres to enable smallholder farmers use tractors/ power tillers District authorities Irrigators Organisation Private sector service provider 49

51 Key issues along the value chain Land and infrastructure Extension services Inputs Market Issue Challenges Recommendation Stakeholder Poor or unavailability of storage facilities Warehouses are owned by millers which are tied to processing facilities, i.e. conditions for storage are tied to mandatory processing in the mill. Farmers have no much choice to choose a milling machine once he has stored paddy in the mill (even if the mill has poor quality) Warehouses are owned by villages or Local Government Authorities are not well kept or underutilised Each scheme should have a warehouse and a professional manager Identify and upgrade existing warehouses ( tons capacity) in the selected schemes to practice the Warehouse Receipt System. Lease village warehouses to farmer organizations on long term contracts Establish big warehouses (20,000 Mt) in strategic locations. Preferably in each district to be linked the commodity exchange Promote the use of Warehouse Receipt System Upgrade the existing warehouses to qualify for Tanzania Warehouse Licensing Board licencing Farmers organizations/ Irrigators Organisations Poor processing facilities Most smallholder farmers sell paddy and not rice i.e. no value addition Upgrade the existing processing facilities Encourage private sector and farmer organizations to go for medium to large processing facilities Encourage private sector to construct large scale processing facilities at district level near the big warehouses under PPP or entirely by private sector Government of Tanzania Private Sector Farmers organisations 50

52 Key issues along the value chain Land and infrastructure Extension services Inputs Market Issue Challenges Recommendation Stakeholder Poor marketing structure Most of the farmers sell their paddy individually Farmers are selling crop during harvesting period and get lower prices There are few cases of farmer organizations which practice Warehouse Receipt System or collectively The wholesale buyers want to buy rice but farmers want to sell paddy Most farmers lack market information other than from traders Lack of central depository of market data and stocks to help government make informed decision like export ban Lack of linkage to the international market District crop cess is not ploughed back to the agriculture sector Lack of accountability of the authorities The government should consider establishment of a commodity exchange which will give small scale farmers an opportunity to sell their rice globally Construct in each of the big warehouses to be managed by Commodity Exchange and there should be a big processing facility nearby.the sites for the warehouses should be mapped by GPS and allocated by the Local Government Authority Strengthen farmer organizations and build their capacity to become competitive in a market place - introduce collective marketing concept to the farmer organization (associations or co-op) at scheme level Use Warehouse Receipt System as collateral for getting credit from the banks The government using National Food Reserve Agency to consider inclusion of paddy as one of the food security crops to buy Reintroduce Market Development Bureau (MDB) Farmers organizations/ Irrigators Organisations Tanzania Warehouse Licensing Board Local Government Authority Mixed Crop Board National Food Reserve Agency Commodity Exchange 51

53 Key issues along the value chain Land and infrastructure Extension services Inputs Market Issue Challenges Recommendation Stakeholder Poor access to crop finance to facilitate farming operations Most farmers cannot access formal credit. As a result they take credit from local sources at very high cost sometimes 200%. They pre sell their crops before harvesting to finance their field operations and other family needs Link farmers through their organizations to financial institutions with affordable terms Farmers organizations/ Irrigators Organisations Financial institutions Unreliable outputs markets Unorganized outputs markets (farmers selling their produce at low prices). This reduces demand for inputs Irrigators Organisation to hire professional management Warehouse Receipt System be promoted in the schemes so that farmers in their organizations are linked with financial institutions (banks, SACCOS etc) for loans while their produce is in the warehouse. This will prevent farmers selling their produce while the crop is still in the field or immediately after harvesting District authorities Tanzania Warehouse Licensing Board Financial institutions Non Governmental Organisations Private Sector 52

54 Key issues along the value chain Land and infrastructure Extension services Inputs Market Issue Challenges Recommendation Stakeholder Lack of accountability for government officials for underperformance Most government officials misinterpret laws and interfere with market system, e.g. forcing farmers to use Warehouse Receipt System for crops District Commissioners do not allow movement of crops from districts Regional Commissioners imposing and uplifting export ban arbitrarily Government to create good business environment with clear policies in place Government of Tanzania 53

55 Overview Recommendations 54

56 Lab has prioritised 8 districts based on a set of criteria selection Mpanda Iringa Rural Mbarali Kilosa Mvomero Kilombero Morogoro Rural Kyela 55

57 Kilosa district MOROGORO 8 irrigation schemes 3,004 smallholder households 2,373 ha Yield from 4.2MT/ha to 8MT/ha Production from 9,925MT to 19,000MT 56

58 Kilosa district Scheme Developed area (ha) Households Yield (MT/ha) Existence of IO Existence of IO Office Existence of IO Office Existence of warehouse and mechanisation centre Aliqadiriya Salama Children Assoc No No No No Chanzuru No No No No Ilonga - Kilosa Lumuma- Kilosa No No No No No No No No Madiani No No No No Mvumi Yes Yes No No Rudewa No No No No Sonjo No No No No

59 Mvomero district MOROGORO 3 irrigation schemes 786 smallholder households 732 ha Yield from 4.2MT/ha to 8MT/ha Production from 3,004MT to 5,900MT 58

60 Mvomero district Scheme Developed area (ha) Households Yield (MT/ha) Existence of IO Existence of IO Office Existence of IO Office Existence of warehouse and mechanisation centre Kigugu No No No No Mbogo No No No No Mkindo Yes No No No

61 Morogoro rural district MOROGORO 4 irrigation schemes 1,865 smallholder households 1,100 ha Yield from 3.9MT/ha to 8MT/ha Production from 4,100MT to 8,800MT 60

62 Morogoro rural district Scheme Developed area (ha) Households Yield (MT/ha) Existence of IO Existence of IO Office Existence of IO Office Existence of warehouse and mechanisation centre Bonye No No No No Magogoni No No No No Mbarangwe Yes No No No Tulo/ Kongwa 600 1, No No No No

63 Kilombero district MOROGORO 8 irrigation schemes 24,584 smallholder households 25,140 ha Yield from 3.6MT/ha to 8MT/ha Production from 88,890MT to 201,000MT 62

64 Kilombero district Scheme Developed area (ha) Households Yield (MT/ha) Existence of IO Existence of IO Office Existence of IO Office Existence of warehouse and mechanisation centre Ikule No No No No Kihansi 1,000 1, No No No No isegese- Idete-Mtega wa Simba Prison Mang'ula Youth Mkangawal o 22,000 22, Yes No No No No No No No No No No No Mkula Yes Yes No No Siginali No No No No Udagaji 1, No No No No

65 Mbarali district MBEYA 35 irrigation schemes 19,615 smallholder households 20,176 ha Yield from 3.9MT/ha to 8MT/ha Production from 82,525MT to 161,000MT 64

66 Mbarali district Scheme Developed area (ha) Households Yield (MT/ha) Existence of IO Existence of IO Office Existence of IO Office Existence of warehouse and mechanisation centre Chamoto Batania Chimba Chimba - Mpolo Chosi- Chimala Gonakuva gogolo No No No No No No No No No No No No Yes Yes No No Gwiri Yes Yes No No Herman No No No No Ibohora No No No No Igomelo Yes Yes No No Igumbilo- Isutu No No No No Ipatagwa Yes Yes No No

67 Mbarali district Scheme Developed area (ha) Households Yield (MT/ha) Existence of IO Existence of IO Office Existence of IO Office Existence of warehouse and mechanisation centre Kapyo No No No No Kimani No No No No Mbuyuni- Kimani 1,500 1, Yes Yes No No Langwira No No No No Lyanyula No No No No Madibira 3,300 3, Yes Yes No No Maendeleo No No No No Mahango- Ushirika No No No No Majengo No No No No Mashalla No No No No

68 Mbarali district Scheme Developed area (ha) Households Yield (MT/ha) Existence of IO Existence of IO Office Existence of IO Office Existence of warehouse and mechanisation centre Matebete No No No No Mayota No No No No Motombaya Yes Yes No No Mswiswi- Azimio Mswiswi- Kongolo No No No No No No No No Mwendamt itu 100 3, No No No No Njalalila No No No No Njombe Yes Yes No No Ruanda Majenje Songwe Imalilo Yes Yes No No No No No No

69 Mbarali district Scheme Developed area (ha) Households Yield (MT/ha) Existence of IO Existence of IO Office Existence of IO Office Existence of warehouse and mechanisation centre Uhambule/ Habibu CA Uhambule/ Utengule No No No No No No No No Ukwaheri No No No No Ukwavila No No No No Uturo Yes Yes No No

70 Kyela district MOROGORO 2 irrigation schemes 1,045 smallholder households 629 ha Yield from 4.3MT/ha to 8MT/ha Production from 2,621MT to 5,000MT 69

71 Kyela district Scheme Developed area (ha) Households Yield (MT/ha) Existence of IO Existence of IO Office Existence of IO Office Existence of warehouse and mechanisation centre Ikumbilo No No No No Ngana No No No No

72 Mpanda district RUKWA 7 irrigation schemes 14,635 smallholder households 2,625 ha Yield from 3.4MT/ha to 8MT/ha Production from 9,819MT to 21,000MT 71

73 Mpanda district Scheme Developed area (ha) Households Yield (MT/ha) Existence of IO Existence of IO Office Existence of IO Office Existence of warehouse and mechanisation centre Iloba No No No No Kakese 500 4,273 4 No No No No Karema 755 2,573 4 No No No No Mwamapuli -Mpanda DC 500 3, No No No No Mwamkulu 100 3,340 3 No No No No Ugala No No No No Uruira No No No No

74 Iringa rural district IRINGA 11 irrigation schemes 4,900 smallholder households 6,783 ha Yield from 4.1MT/ha to 8MT/ha Production from 24,338MT to 54,000MT 73

75 Iringa rural district Scheme Developed area (ha) Households Yield (MT/ha) Existence of IO Existence of IO Office Existence of IO Office Existence of warehouse and mechanisation centre Cherehani Mkoga No No No No Idodi No No No No Ipwasi Ndorobo 3, No No No No Mafuruto No No No No Magozi No No No No Makuka No No No No Mapogoro Yes No No No Mapogoro- Kibaoni Yes No No No Mkombozi 1, No Yes No No Mlambalasi No No No No Pawaga- Mlenge Yes Yes No No

76 Irrigators Organisation (IO) Roles of Irrigators Organisation An Irrigators Organization major role is to participate in scheme development; operation and maintenance of irrigation schemes; and collection and management of irrigation service charges Current irrigators organizations are weak and unable to provide the required services to irrigators to the extent that they cannot reap expected benefits from the investment i) Establishment IOs are registered as Irrigators Association (IAs) under the Ministry of Home Affairs in order to operate and maintain the irrigation facilities ii) Registration IO to be registered as a legal entity under the Association Act with its own constitution to be able to access formal rights such as water rights, land tenure and public services from the government such as development assistance, technical advice, and training programmes iii) Formal commitment to the District Council Commitment of the irrigators should be confirmed in writing in a signed letter to the District Council. This letter defines the obligations of the Irrigators Organisation as per Comprehensive Guidelines for Irrigation scheme development. 75

77 Detailed stakeholder mapping under proposed structure Change agent Ministry of Agriculture, Food Security and Cooperatives Research and Training Institutions Zonal Irrigation and Technical Services Unit PMO-RALG Local Government Authority (District Council) Private Service Provider Ministry of Lands, Housing and Human Settlements Development Ministry of Industry and Trade Ministry of Water Ministry of Works IRRIGATORS ORGANISATION Processor Financial Institution Input Supplier & Mechanisation Smallholder Farmer Local Buyers Commodit y Exchange 76

78 Roles and responsibilities of key stakeholder Ministry of Agriculture, Food Security and Cooperatives Roles and responsibility Facilitating the development of sustainable agriculture To supervise policy and regulatory function To backstop LGA technically Joint recruitment of service provider Conduct sensitisation seminars at Zonal and District level Fast track establishment of Zonal Irrigation Commision Incentives required to perform Adequate resources (at least 10% of National Budget) Adoption of developed technologies Increased accountability under D by D Relationship with other key stakeholders Research and Training Institutions Qualifications N/A MAFC Zonal Irrigation and Technical Services Unit Local Government Authority (District Council) Performance managed by Minister of Agriculture 77

79 Roles and responsibilities of key stakeholder Zonal Irrigation and Technical Services Unit (ZITSU) Roles and responsibility Planning and design of irrigation systems Irrigation infrastructure construction and supervision Irrigation research and technology promotion Technical backstopping of the LGA (on all technical aspects related to Irrigation Department) Relationship with other key stakeholders MAFC ZITSU Incentives required to perform Transport and working facilities Customised training programmes Attractive remuneration package Qualifications LGA N/A Performance managed by Director of Irrigation and Technical Services under MAFC 78

80 Roles and responsibilities of key stakeholder Local Government Authority (LGA) Roles and responsibility Relationship with other key stakeholders Implement agriculture policies and regulatory functions Supervise extension officers and irrigation technician Construction and repair of irrigation infrastructure Monitor and evaluate irrigation interventions Facilitate issuance of CCRO s Contract service providers ZITSU Ministries LGA Incentives required to perform Adequate resources Private Service Provider Irrigators Organisation Performance managed by District Executive Director (DED) Qualifications N/A 79

81 Roles and responsibilities of key stakeholder Irrigators Organisation (IO) Roles and responsibility Overall management of an irrigation scheme Supervise farmers in scheme development improvement Collection and management of irrigation service charges Any other roles as provided in the Constitution Incentives required to perform Training in management of IO Office space Sustainable irrigation scheme Income from different sources for management purpose Performance managed by Relationship with other key stakeholders Financial Institution Input Supplier & Mechanisation Qualifications LGA Irrigators Organisation Smallholder Farmers Private Service Provider Processor IO to be registered as a legal entity under the Association Act with its own constitution Annual General Meeting (AGM) 80

82 Roles and responsibilities of key stakeholder Smallholder Farmers Roles and responsibility Relationship with other key stakeholders To produce rice under good agricultural practices To comply to the constitution and its bylaws To sell their surplus produce Irrigators Organisation Smallholder farmers Incentives required to perform Affordable inputs Improved irrigation infrastructure Reliable market Assured land tenure Performance managed by Qualifications Owns a piece of land in the irrigation scheme To be a member of IO Irrigators Organisation (IO) 81

83 Structure of Irrigators Organisation (IO) General Meeting Technical Management Team Internal Auditor Executive Committee Technical Management Team Private Service Provider Treasurer Secretary Technical Manager Planning and Finance Sub- Committee Agriculture & Environment Commitee Construction Operation & Maintenanc e Commitee Irrigation Technician Warehouse Operator Extension Officer Block leaderships 82

84 Roles and responsibilities of key stakeholder in Technical Management Team Private Service Provider Roles and responsibility Build capacity of irrigators organization (IO) and smallholder farmers as a whole to take over the management after 2 years. Provision of various trainings related to leadership skills, financial management, record keeping, agronomic skills, post-harvest handling, marketing etc Organizing bulk purchase of inputs in collaboration with IO Organizing storage of paddy in a given warehouse for collective marketing Working together with IO to look for potential buyers Link the IOs warehouses with the Commodity Exchange (COMEX). Working with IO to identify and engage high grade processors for better marketing Identify and engage mechanization services Recruit technical team, including Technical Manager, Extension Officer, Irrigation Technician and Warehouse Operator Hire consultants, and other business development services (BDS) providers to provide various business development services to the IO and all users of the scheme Conduct different studies/research work including market surveys, baseline surveys, inventory of warehouses and processing facilities in the target area Contact branding companies and Market Information Service providers Link IOs to financial institutions Incentives required to perform Timely payment Performance managed by Local Government Authority Relationship with other key stakeholders Research and Training Institutions LGA Qualifications Executive Committee (IO) Private Service Provider Technical Manager At least 2 years experience working with small holder farmers in Tanzanian environment Must have technical capacity to cover at least one district out of 8 Must have skills to organize smallholder farmers and link them to markets 83

85 Roles and responsibilities of key stakeholder in Technical Management Team Technical Manager Roles and responsibility To manage the business part of the scheme on behalf of IO and report to Executive Committee Prepare business plan and submit to the Executive Committee Supervise the technical team To manage the warehouse operation To organise input supply To look for rice markets Prepare annual accounts and reports Relationship with other key stakeholders Private Service Provider Technical Manager Incentives required to perform Attractive salary Office space and facilities Transport Performance bonus Warehouse Operator Qualifications Irrigation Technician Extension Officer Performance managed by Service provider At least Diploma in Farm Management, Degree in Agribusiness or any other relevant/related field 84

86 Roles and responsibilities of key stakeholder in Technical Management Team Irrigation Technician Roles and responsibility Relationship with other key stakeholders Supervision on management of irrigation infrastructure and irrigation water utilisation Supervise construction Technical Manager Incentives required to perform Transport and working facilities Customised training programmer Attractive remuneration package Qualifications Irrigation Technician Performance managed by At least a diploma certificate in irrigation Technical Manager 85

87 Roles and responsibilities of key stakeholder in Technical Management Team Warehouse Operator Roles and responsibility To control and monitor the quality of rice stored in the warehouse To record and document all necessary information related to the stock stored To fumigate and control pest within and around the warehouse To manage the security guard and all labourers involved during loading and offloading To collect storage fees from members To control the stock getting in and out of warehouse Incentives required to perform Attractive package of salary Performance based incentives Relationship with other key stakeholders Technical Manager Warehouse Operator Qualifications Performance managed by Technical Manager and IO Committee Resident in the villages around the IO Trained in warehouse management Preferably member of IO 86

88 Roles and responsibilities of key stakeholder in Technical Management Team Extension Officer Roles and responsibility Advise farmers on GAP (Good Agricultural Practices) Link research and farmers Supervise farmer training at farm level Monitor and evaluate production performance Data collection on production inputs used and yields Prepare and submit reports to technical manager Relationship with other key stakeholders Technical Manager Incentives required to perform Transport Allowances Retraining and seminars on rice Working gears such as laptops Qualifications Extension Officer Performance managed by Technical Manager At least a diploma in Agriculture/Crop Production 87

89 Roles and responsibilities of key stakeholder within the IO General Meeting Roles and responsibility This is the highest organ of IO To make resolutions on all bylaws and IO guidelines To review and approve annual budget To hire and fire technical management staff including Technical Manager To approve work plans and contracts Approve and amend Constitution To elect and expel the IO members Other duties as provided in Constitution Relationship with other key stakeholders Technical Manager Executive Committee Incentives required to perform Rehabilitated irrigation schemes Professionally managed schemes High recognition by LGA and Central Government Qualifications N/A Performance managed by Relevant Registerer 88

90 Roles and responsibilities of key stakeholder within the IO Executive Committee Roles and responsibility Relationship with other key stakeholders Supervision of all scheme activities To make decisions of the issues related to the scheme Implementation of the Constitution Signing of all contracts and legal documents Internal Auditor General Meeting Executive Committee Technical Management Team Treasurer Secretary Incentives required to perform Recognition and respect Exposure visit Planning and Finance Sub- Committee Agriculture & Environment Commitee Construction Operation & Maintenance Commitee Performance managed by General Meeting Qualifications N/A 89

91 Roles and responsibilities of key stakeholder within the IO Secretary of the IO Roles and responsibility To keep all records of the meetings Preparation of scheduled meetings of the Executive Committee and AGM Collection of all revenues from farmers as agreed Communications with other entities related to the Executive Committee Relationship with other key stakeholders Executive Committee Secretary Incentives required to perform Paid some percentage of the total collectons Performance managed by Executive Committee Qualifications Secondary education and above Not in a higher position in any of the Government or political party Basic knowledge in book keeping 90

92 Roles and responsibilities of key stakeholder within the IO Treasurer of the IO Roles and responsibility Receive and keep the collected revenues and grants Banking and keeping of financial records Payments of all bills as regards to transactions of the scheme Preparation of statements of income and expenditure Relationship with other key stakeholders Executive Committee Treasurer Incentives required to perform Salary as agreed by AGM Performance managed by Executive Committee Qualifications Member of the scheme Good record of worthiness Basic knowledge in book keeping and accounting 91

93 Roles and responsibilities of key stakeholder within the IO Auditor Roles and responsibility To audit accounts of IO Advise Executive Committee on the management of IO account Prepare audit report for the audited account and submit to Executive Committee (copied to LGA) Relationship with other key stakeholders Executive Committee Auditor Incentives required to perform Transport and working facilities Qualifications Qualified Auditor Performance managed by Executive Committee 92

94 Roles and responsibilities of key stakeholder within the IO Block leaders Roles and responsibility Relationship with other key stakeholders Supervise farmers in the blocks Ensure technical compliance Supervise infrastructure, operations and maintenance Supervise fee collectives Link between farmers and irrigation scheme management Planning and Finance Sub- Committee Agriculture & Environment Commitee Construction Operation & Maintenance Commitee Block leaders Incentives required to perform Recognition and respect Smallholder farmers Qualifications Performance managed by Member of the block Progressive farmer Executive Committee 93

95 Relationship between Irrigators Organisation with key stakeholders Local Government Authorities (LGA) Provision of grant required for development based activities such as construction of irrigation infrastructure, warehouse rehabilitation, IO office, etc Smallholder farmers All irrigation scheme farmers to be registered and sign an agreement to confirm compliance to by-laws which will guide the management of the scheme Irrigators Organisation Employees of IO Tripartite agreement between IO, employee and LGA or Zonal Irrigation Office Key employees of the IO are: Professional manager Warehouse operator Irrigation technician Extension officer Service providers Service providers will be providing essential services such as: Mechanisation for ploughing, levelling harvesting and water management Training for trainers and farmers Capacity building from the Business Development Services (BDS) providers such as MWIVATA and RUDI Input suppliers such as seed, fertilisers and agrochemical producers Processors to mill paddy into rice Financial institutions to provide loans and financial support Local and international buyers 94

96 The Irrigators Organisation s Constitution should contain specifics as below 1. Particulars of the organisation 2. Definition of words 3. Objectives 4. Membership and termination 5. Rights, roles and responsibilities of members 6. Finance and properties of the organisation 7. Organisation s meetings 8. Structure, leadership roles and responsibilities 9. The power of the organisation 10. Dissolution of the organisation 11. The guardian of the organisation 12. By-laws of the organisation 95

97 Income statement of a typical rice smallholder RICE EXAMPLE Yield (tons per ha): 4.0 Current situation X Amount consumed on-farm 1 (tons per ha): 0.8 Marketed amount (tons per ha): 3.2 Farm-gate price ( 000 TZS per ton): 800 Cash revenue ( 000 TZS per ha): 2,560 Cash cost 2 ( 000 per ha): 950 Under the current practices, a typical smallholders in irrigated area is earning cash profit of TZS1.6 million per ha Cash profit ( 000 per ha): 1,610 Expected condition under proposed model X Yield of ~8 tons per ha ~10% lower yield due to unforeseen circumstances Yield (tons per ha): Amount consumed on-farm 1 (tons per ha): Marketed amount (tons per ha): Farm-gate price ( 000 TZS per ton): Cash revenue ( 000 TZS per ha): 5,120 4,608 Cash cost 2 ( 000 per ha): 2,360 2,360 Cash profit ( 000 per ha): 2,760 2,248 With the proposed model, farmer s income is expected to increase by 71% under optimum condition In the case where conditions may not be so favourable, farmer can still expect income increase by 40% under the proposed model 1 Based on ~80% commercialization rate for farmers 2 Based on recommended seed and fertilizer usage SOURCE: Team s analysis 96

98 Economics of Irrigators Organisation Small (<500 ha) Profit for IO Year 1 Year 2 Year 3 Profit for IO Medium (500-1,000ha) Year 1 Year 2 Year 3 Large (>1,000ha) Profit for IO Year 1 Year 2 Year 3 97

99 Economics of Irrigators Organisation Small (250 ha) Number of smallholder households: Area (ha): Inflation per year: % Profit for IO (TZS mil) (Small Irrigation Scheme) / / / / / / /20 INCOME STATEMENT: Revenue: 2013/ / / / / / /20 Registration fee 1,250, Storage fee (warehouse) 2,500,000 4,200,000 6,615,000 8,682,188 10,939,556 13,400,956 16,081,148 Penalty 625, , , , , , ,000 Shares 1,250,000 44,125, ,250, ,394, ,039, ,501, ,875,931 Irrigation Services Fee 40,000,000 63,000,000 88,200,000 92,610,000 97,240, ,102, ,207,651 45,625, ,825, ,440, ,936, ,344, ,129, ,289,730 Expenditure: Water bills 1,125,000 1,125,000 1,125,000 1,125,000 1,125,000 1,125,000 1,125,000 Storage cost 3,750,000 5,200,000 7,207,500 8,841,094 10,569,778 12,400,478 14,340,574 Warehouse supervision allowances 500, , , , , , ,048 Administrative cost Fuel 2,800,417 2,940,438 3,087,459 3,241,832 3,403,924 3,574,120 3,752,826 Motorbike maintenance 700, , , , , , ,207 Stationeries 500, , , , , , ,048 Travelling 500, , , , , , ,048 Salaries 28,600,800 30,030,840 31,532,382 33,109,001 34,764,451 36,502,674 38,327,807 Purchase of motorbikes to replace old motorbikes 23,369,247 Total 1,500,000 1,575,000 37,045,456 38,897,729 40,842,615 66,253,993 45,028, Net Balance 44,125, ,250, ,394, ,039, ,501, ,875, ,260,746

100 Economics of Irrigators Organisation Medium (750 ha) Number of smallholder households: Area (ha): Inflation per year: % Profit for IO (TZS mil) (Medium Irrigation Scheme) / / / / / / /20 INCOME STATEMENT: Revenue: 2013/ / / / / / /20 Registration fee 3,750, Storage fee (warehouse) 7,500,000 12,600,000 19,845,000 26,046,563 32,818,669 40,202,869 48,243,443 Penalty 1,875,000 1,500,000 1,125, , , , ,000 Shares 3,750, ,375, ,900, ,399, ,152, ,150,915 1,114,715,533 Irrigation Services Fee 120,000, ,000, ,600, ,830, ,721, ,307, ,622,954 Expenditure: 136,875, ,475, ,470, ,026,518 1,055,068,140 1,296,036,360 1,484,956,929 Water bills 3,375,000 3,375,000 3,375,000 3,375,000 3,375,000 3,375,000 3,375,000 Storage cost 8,250,000 12,600,000 18,622,500 23,523,281 28,709,334 34,201,435 40,021,722 Warehouse supervision allowances 500, , , , , , ,048 Administrative cost Fuel 8,401,250 8,821,313 9,262,378 9,725,497 10,211,772 10,722,360 11,258,479 Motorbike maintenance 2,100,313 2,205,328 2,315,595 2,431,374 2,552,943 2,680,590 2,814,620 Stationeries 500, , , , , , ,048 Travelling 500, , , , , , ,048 Salaries 75,136,800 78,893,640 82,838,322 86,980,238 91,329,250 95,895, ,690,498 Purchase of motorbikes to replace old motorbikes 70,107,742 Total 1,500,000 1,575,000 96,070, ,873, ,917, ,320, ,773, Net Balance 135,375, ,900, ,399, ,152, ,150,915 1,114,715,533 1,368,183,190

101 Economics of Irrigators Organisation Large (1,500 ha) Number of smallholder households: Area (ha): Inflation per year: 1,500 1,500 5% Profit for IO (TZS mil) (Large Irrigation Scheme) / / / / / / /20 INCOME STATEMENT: Revenue: 2013/ / / / / / /20 Registration fee 7,500, Storage fee (warehouse) 15,000,000 25,200,000 39,690,000 52,093,125 65,637,338 80,405,738 96,486,886 Penalty 3,750,000 3,000,000 2,250,000 1,500, , , ,000 Shares 7,500, ,250, ,875,000 1,063,408,073 1,478,823,924 1,925,125,124 2,264,974,935 Irrigation Services Fee 240,000, ,000, ,200, ,660, ,443, ,615, ,245,908 Expenditure: 273,750, ,450,000 1,248,015,000 1,672,661,198 2,128,654,262 2,618,896,013 3,005,457,729 Water bills 6,750,000 6,750,000 6,750,000 6,750,000 6,750,000 6,750,000 6,750,000 Storage cost 15,000,000 23,700,000 35,745,000 45,546,563 55,918,669 66,902,869 78,543,443 Warehouse supervision allowances 500, , , , , , ,048 Administrative cost Fuel 16,802,500 17,642,625 18,524,756 19,450,994 20,423,544 21,444,721 22,516,957 Motorbike maintenance 4,200,625 4,410,656 4,631,189 4,862,749 5,105,886 5,361,180 5,629,239 Stationeries 500, , , , , , ,048 Travelling 500, , , , , , ,048 Salaries 144,940, ,187, ,797, ,787, ,176, ,985, ,234,534 Purchase of motorbikes to replace old motorbikes 140,215,483 Total 1,500,000 1,575, ,606, ,837, ,529, ,921, ,390,874 Net Balance 272,250, ,875,000 1,063,408,073 1,478,823,924 1,925,125,124 2,264,974, ,781,066,855

102 There are a number of tasks that need to be carried out along the value chain/by each stakeholder to enable this model to work 1 2 Sensitization on the Model Implementation of the Model MAFC to convene a 2 days awareness creation seminar on the model (4 regions and 8 districts- Regional Commissioner, District Executive Director, District Agriculture and Irrigation Cooperative Officer, Council chair, Zonal Officer, Regional Administrative Secretaries and District Commisioner) MAFC to conduct a one day seminar to each of the 8 districts LGA to sensitize targeted communities in 78 schemes LGA to establish and strengthen Irrigators Organisation (IO) Targeted 78 schemes to confirm and apply for the services MAFC to prepare TOR for private service provider and tender documents for 78 schemes MAFC to advertise tender and shortlist private service providers to implement the model MAFC & LGA to do joint recruitment of private service providers LGA to conduct orientation of private service providers on the model and site possession Private service provider to provide services as per TOR Cabinet to resolve establishment of the Legal Framework for Irrigation Development Ministries responsible for Irrigation and Civil Service to establish the National Irrigation Commission for accelerated irrigation development in Tanzania 101

103 There are a number of tasks that need to be carried out along the value chain/by each stakeholder to enable this model to work 3 4 Land Use Planning and Titling Construction of irrigation infrastructure, warehouses and farm roads National Land Use Planning Commission to develop Village Land Use Plans in 78 schemes Ministry of Lands to establish registries for District and Village Land Registries for 8 districts Ministry of Lands to provide equipment and materials for District and Village Land Registries Ministry of Lands to prepare and issue CCROs to farmers in 78 schemes PMO-RALG to establish District Irrigation Development Department (DID) at LGA DED to conduct baseline survey (social, soil, topo, water resource, agronomy, economic, environmental studies) DED & ZIO to prepare tender document and advertise (construction of irrigation infrastructure and IO office) DED and ZIO to recruit contractor for the construction/rehabilitation of irrigation infrastructures and IO Office Contractor to construct/rehabilitate irrigation infrastructure and IO Offices in 78 schemes Zonal Irrigation Office & LGA to supervise the construction of irrigation infrastructure and IO Office District Council to prepare tender documents and sign contract for construction/rehabilitation of warehouses 102

104 There are a number of tasks that need to be carried out along the value chain/by each stakeholder to enable this model to work 4 5 Construction of irrigation infrastructure, warehouses and farm roads (cont.) Capacity building of extension service providers District Council to recruit contractors for construction/rehabilitation of warehouses in 78 schemes Contractor to construct/rehabilitate warehouses in 78 schemes Tanzania Building Agents to supervise construction of warehouses District Council to prepare tender documents for rehabilitation/upgrading of farm roads District Council to recruit contractors to rehabilitate/upgrade farm roads Contractor to rehabilitate/upgrade farm roads District Engineer to supervise rehabilitation/upgrade of farm roads Strengthening of LGA Strengthening of Zonal Irrigation Office Training institutions to retrain extension officers and irrigation technicians in 78 schemes Extension officer/input companies to establish farmers field school Training institutions to train lead farmers on GAP (Good Agricultural Practices) - 5 farmers per scheme Lead farmers/extension Officer to train farmers at scheme level Private service provider to provide transport logistics (motorbikes) and working facilities to extension officer and irrigation technician in 78 schemes 103

105 There are a number of tasks that need to be carried out along the value chain/by each stakeholder to enable this model to work 6 7 Contracting input suppliers, mechanisation and financial institutions Warehouses Management and Market Linkages Executive Committee (IO)/ Management to establish demand for inputs Seed companies to produce the selected improved seed for 78 schemes Technical Manager and Executive Committee (IO) to identify, negotiate and enter into procurement contract with input suppliers Technical Manager and Executive Committee (IO) to negotiate with LGA for government input subsidy Technical Manager and Executive Committee (IO) to identify financial institutions and conditions for loans Technical Manager to facilitate negotiations between the financial institutions and IO for loans Technical Manager and Executive Committee (IO) to identify and contract provider of mechanization services Private service provider to identify and prepare inventory of existing warehouses, owners and processing facilities Private service provider to conduct market survey Executive Committee (IO) to sign contract with warehouse operator Private service provider to procure basic warehouse equipment Private service provider to recruit warehouse workers Technical Manager to sign contract with processors and buyers Private service provider to establish market information system Technical Manager to identify and contract branding companies 104

106 There are a number of tasks that need to be carried out along the value chain/by each stakeholder to enable this model to work 8 Establishment of commodity exchange and inclusion of rice as priority Cabinet to resolve establishment of Commodity Exchange in Tanzania and approve establishment of Commodity Exchange of Tanzania secretariat under Ministry of Industry and Trade (MIT) Commodity Exchange of Tanzania secretariat to collect all studies on COMEX including the Roadmap Commodity Exchange of Tanzania secretariat to prepare system design Commodity Exchange of Tanzania secretariat to establish a trading floor using consultants Rice to be among the commodities to be traded in Commodity Exchange of Tanzania Service provider to link rice warehouses to Commodity Exchange MAFC to establish a credible Agriculture Statistical Bureau 105

107 Macro level Gantt Chart Activity 1) 1 Sensitisation of Model 2) 2 Implementation of Model 3) 3 Land Use Planning and Titiling 4) 4 Construction of Infrastructure 5) 5 Capacity Building Of Extension Service Providers 6) 6 Contracting Input Suppliers, Mechanisation and Financial Institutions 7) 7 Warehouses Management and Market Linkages 8) 8 Inclusion of Rice In Commodity Exchange Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Responsible MAFC, LGA MAFC, LGA Ministry of Lands LGA Private Service Provider Executive Committee (IO), Technical Manager Private Service Provider Ministry of Industry and Trade 106

108 1 Sensitisation of the model 2013 Jul Aug Sep Activity Action Party Cost (TZS mil) Awareness seminar on model with regional & district leaders MAFC 65.0 Seminar at district level MAFC 92.8 Sensitise communities at schemes LGA 78 Establish & strengthen IO LGA 780 Assumption: Inflation rate at 5% per annum 107

109 2 Implementation of the model Activity Schemes to confirm and apply Prepare TOR & tender documents for private service provider Advertise tender and shortlist private service providers Recruitment of private service providers Conduct orientation to private service providers Provide services as per TOR Resolve establishment of Legal Framework for Irrigation Development Establish National Irrigation Commission Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 9/8/13 9/8/14 9/8/15 Action Party IO MAFC MAFC MAFC & LGA LGA Private Service Provider Cabinet MAFC, Presidents Office, Public Service Cost (TZS mil) , Assumption: Inflation rate at 5% per annum First year contract Second year contract 108

110 3 Land use planning and titling Activity Jul Aug Sep Oct Nov Dec Jan Action Party Cost (TZS mil) Develop Village Land Use Plans National Land Use Planning Commission Establish District and Village Land Registries Ministry of Lands 3,600.0 Provide equipment and materials for District and Village Land Registries Ministry of Lands 74.1 Prepare and issue CCROs to farmers Ministry of Lands 1,400.0 Assumption: Inflation rate at 5% per annum 109

111 4 Activity Construction of irrigation infrastructure, warehouses and farm roads Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr Action Party Cost (TZS mil) Establish DID 1 at LGA PMO-RALG 50.0 Conduct baseline survey Prepare tender and advertise for construction of irrigation infrastructure & IO office Recruit contractor for construction of irrigation infrastructure & IO office Supervision of construction of irrigatiom Infrastructure & IO office Prepare tender for construction of warehouses Recruit contractor for construction of warehouses Construction of warehouses Supervision of construction of warehouses Prepare tender for upgrading farm roads Recruit contractor for upgrading farm roads Upgrading of farm roads Supervise upgrading of farm roads DED 2 DED & ZIO 3 ZIO, LGA & Consultant District Council District Council Contractor Tanzania Building Agents District Council District Council Contractor District Engineer 5, ,152.0 DED & ZIO Construction of irrigation infrastructure & IO office Contractor 164,025.0 Strengthening of LGA LGA 2, , , , , , Strengthening of Zonal Irrigation Office MAFC DID stands for District Irrigation Development Department 2 DED stands for District Executive Director 3 ZIO stands for Zonal Irrigation Office Assumption: Inflation rate at 5% per annum 110

112 5 Capacity building of extension service providers Activity Retrain extension officers and irrigation technicians Establish farmers field school Train lead farmers on GAP (Good Agricultural Practices) Q3 Q4 Q1 Q2 Q3 Q4 Q1 Action Party Private Service Provider Extension Officer/Input Supplier Training Institutions Cost (TZS mil) Train lead farmers on GAP (Good Agricultural Practices) Provide transport logistics and working facilities to extension officers and irrigation technicians Lead farmers/ Extension Officer Private Service Provider ,915.3 Assumption: Inflation rate at 5% per annum 111

113 6 Activity Contracting input suppliers, mechanisation and financial institutions Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Action Party Cost (TZS mil) Establish demands for inputs Produce improved seeds Enter into procurement contract with input suppliers Negotiate with LGA for input subsidy Identify financial institutions & conditions for loans Facilitate loan negotiation between IO and financial institutions Identify & contract provider of mechanization services Executive Committee (IO)/ Management ASA and private seed companies Technical Manager & Executive Committee Technical Manager & Executive Committee Technical Manager & Executive Committee Technical Manager Technical Manager & Executive Committee - 29, Assumption: Inflation rate at 5% per annum 112

114 7 Warehouses management and market linkages Activity Prepare inventory of existing warehouses and processing facilities Conduct market survey Sign contract with warehouse operator Procure basic Warehouse equipments Recruit warehouse workers Sign contract with processors and buyers Establish market information system Identify and contract branding companies Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Cost for the warehouses management and market linkages activities are borne by the private service provider as per the contract Assumption: Inflation rate at 5% per annum Action Party Private Service Provider Private Service Provider Executive Committee (IO) Private Service Provider Private Service Provider Technical Manager Private Service Provider Technical Manager 113 Cost (TZS mil)

115 8 Activity Establishment of commodity exchange and inclusion of rice as priority Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Action Party Cost (TZS mil) Establishment of Commodity Exchange of Tanzania secretariat MIT - Collect all studies on Commodity Exchange including roadmap Prepare system design MIT MIT 2,076.3 Establish trading floor using consultants MIT Rice to be traded in Commodity Exchange MIT - Linking rice warehouses to Commodity Exchange Private Service Provider - Establish a credible Agriculture Statistical Bureau MAFC - Assumption: Inflation rate at 5% per annum 114

116 Total budget required for the smallholder rice irrigation schemes to work is TZS333.9 bil for Private sector Budget required (TZS mil) Public (DE) Public (RE) DP (DE) DP (RE) TZS252,756 mil TZS68,701 mil TZS12,435mil Assumption: 5% inflation per annum 115

117 Optional model - Block farming via equity Current Situation Block Farming with Professional management Each farmer has a small plot of different shapes and sizes 200 Farmers with farms close to each other merge their farms to form a BLOCK farm which is managed as a one farm Benefits The benefits of the block farm professionally managed are. THIS IS A WEALTH CREATION MODEL This model is applicable to both small holder and commercial out grower model The farmers still maintain the ownership of their land. Each farmer has a CCRO which s/he uses to buy shares in their new company which will manage the farm. The farmer organization is registered as a company limited by shares. The farmers with farms in the block are the shareholders Farmers are relieved from the hassles of farm activities and they get extra income by employing professional managers The whole block grow one agreed variety with a market value The professional management organizes bulk inputs and the farm operations on GAP, new technologies like SRI are adhered and use of pivotal irrigation. Productivity of paddy 8 tons / ha or ( 30 bags per acre) is assured and farming become COMPETITIVE and production is increased Farmers get more income from the same area of land. Production increase more than 300%. The farmers organization can as well engage effectively with other value chain actors and become more competitive in a market place 116

118 Block farming model development process Steps The farmers are sensitized to understand the model and voluntarily AGREE to CHANGE (Investing in People and Not things) All the farmers plots are surveyed using GPS and each gets a CCRO. The small scale farmer legally owns his/her farm and is empowered to use it to become rich The farmers with farm plots in one area form a farmer group and agree to AGGREGATE their plots into ONE BLOCK FARM Several farmer groups form a farmer organization which is registered as a Company or a TRUST The farmer organization employs a Professional manager to manage the scheme. The farmer organization/ company under professional management applies for loan from the bank to cover all farm operations The professional manager employs people to perform farm operations. Every hard working person in the village/ scheme gets employment. This means a farmer will be paid to work on his/her own farm Steps cont If there is a labor shortage people can be employed from other villages The produce from the scheme is stored in a WAREHOUSE and marketed collectively The big volumes of paddy/rice gives a scale for the bargaining power of farmers is increased and the prices are competitive; The Scheme warehouses will be be a marketing centre or linked to a commodity exchange The equity in the company is divided among farmers /shareholders according to the number of acres each farmer has in the block The revenue from the sale of rice from the block is divided according to the shares the farmer owns in the company 117

119 Commercial farming 1 25 Commercial farming deals for paddy and sugarcane Smallholder aggregation Professionally managed collective rice irrigation and marketing schemes 275 Collective warehouse based marketing schemes COWABAMA 118