Researching the Politics and Economics of Agriculture in Africa: The Case of Tanzania
Brian, you’ve been doing research on Tanzanian agricultural policy.What’s the background to your study?
The project is called the Political Economy of Agricultural Policy in Africa (PEAPA). It’s funded by the U.K. and Irish governments and implemented by the Future Agricultures Consortium, under the coordination of Colin Poulton of the School of Oriental and African Studies (London). We’re asking how economic liberalisation and democratisation since the 1980s have affected farmers in a selection of African countries: Tanzania, Kenya, Mozambique, Rwanda, Ethiopia, Malawi, and Burkina Faso.
So how has economic liberalisation affected Tanzanian farmers?
Farmers growing export crops like cotton, coffee, and cashew haven’t done well. Externally-driven liberalisation after 1985 succeeded in eliminating exchange rate distortions and re-established macro-economic stability, but the preconditions for a rapid and sustained supply response--in particular policies actively promoting competitive markets--were never put in place. Liberalisation was only partial and it wasn’t sustained. The previously demoted marketing boards and cooperatives were subsequently re-empowered, with largely negative consequences for farmers’ incentives. As a result, Tanzania has lost market share to its global competitors across the board. But the country no longer depends on foreign exchange earned from ‘traditional’ crops as it did after independence. Minerals, tourism and manufacturing now account for 80 percent of exports by value. So arguably, the country’s ruling elite allows the agricultural bureaucracy, the boards and cooperatives, to control export agriculture in exchange for political loyalty. This carries serious economic costs.
But Tanzania’s rulers can’t afford to treat food in this way. As well as meeting subsistence needs, commercial production of maize and other foodstuffs feeds the growing urban population. Consequently, liberalisation has meant the virtual privatisation of these markets, which are relatively efficient, though high transport costs make urban food more expensive than it could be.
Tanzania held its first multiparty elections in 1995. To date, CCM (the ruling party) has yet to be seriously challenged at the polls. So how does democratisation influence agricultural policy?
We looked for evidence that agricultural policy has become more ‘pro-farmer’ under a competitive political regime by examining two major initiatives, the Agricultural Sector Development Program (ASDP) and the National Agricultural Input Voucher Scheme (NAIVS). The ASDP was Tanzania’s framework policy initiative of the 21st century. It was overwhelmingly state-centred, focusing on improving productivity through the provision of public goods, in particular small-scale irrigation projects up to a value of $50,000. Since only relatively few projects could be funded, it is not obvious that vote-capture was a major objective of the ruling elite. Rather, given that projects were selected bureaucratically, it is likely that patronage was a more plausible policy driver. The decision to expand the irrigation component of ASDP was made by President Kikwete after the 2005 elections which brought him to power, which again suggests a patronage rather than a programmatic or a vote-seeking intention.
By contrast, the Voucher Scheme was promoted by the ruling elite for avowedly electoral purposes. NAIVS targeted small-holder maize and rice producers with subsidies worth fifty percent of the value of the inputs. Subsidies had been phased out under liberalisation, but were reintroduced in 2004. NAIVS began in 2008 and peaked in 2010--the year of the latest elections--when roughly two million smallholders were targeted, and half the agriculture budget was spent on subsidies.
But it is unlikely that many smallholders actually received vouchers. Most were probably captured by large farmers. Commercial farmers using ox ploughs and tractors and hiring labour constitute perhaps 20 percent of all maize growers. They are likely to be well connected to the local power brokers, politicians and government officials, indeed they may be the same people! So we shouldn’t be surprised if there is massive diversion of the subsidies to this group. Media reports and recent survey results suggest that few small-holders receive vouchers: either they cannot afford them or their allocations are diverted somewhere along the distribution chain--the allocation process is controlled by committees of officials from Dar es Salaam down to the village. Some farmers are paid to sign for vouchers they don’t receive. One study found that elected village officials received about 60 percent of the distributed vouchers. Finally, roughly half the subsidies have gone to the four southern highlands regions, Dar es Salaam’s main source of maize, and to Iringa region--a CCM stronghold--in particular. Subsidising Dar es Salaam’s maize supply in an election year makes political, but not much economic, sense.
I conclude that whether patronage or voter-drive, agricultural policies are unlikely to deliver benefits to the mass of the farming population that might encourage them to vote for the ruling party. This is the farmers’ view too: when asked in a 2007 REPOA survey what benefits they received from the government, three-quarters of all farmers said ‘nothing’, but 15 percent of the least poor mentioned subsidies as a benefit, compared to almost none of the poorest. Despite considerable additional spending on agriculture in the last few years, few farmers see any improvements in state services and most complain of worsening input prices, unavailability of credit, the poor state of rural roads, and so on.
The 2010 elections revealed growing dissatisfaction with the ruling party among the rural majority, traditionally the most loyal CCM supporters. Factionalism in the CCM camp, growing dissatisfaction with unfulfilled electoral promises and a perception of universal corruption in the exercise of state power have played into the hands of a resurgent opposition. Now would be the time for pro-farmer policies, but the more urgent demands of patronage prevent such a thing from happening. With few concrete benefits to offer farmers, the ruling party has no option but to resort to vote buying, ballot rigging and intimidation to bring in the rural vote.
You also said you were interested in the impact of foreign aid on policy. What are your findings?
Donors play contradictory roles. On the one hand they advocate for a more market-driven policy regime, yet at the same time they finance projects which support ineffective state-led interventions. Donors initially objected to the ASDP on the grounds that it was heavily focused on public goods provision, an approach which had failed repeatedly in the past. They also opposed the reintroduction of input subsidies on both equity and efficiency grounds. They perceived that in both projects the ‘private sector’ was accorded only a subsidiary role. Yet in both cases the World Bank broke ranks by supporting ASDP and NAIVS with projects worth well over USD 300 million! It is well known that reaching disbursement targets drives much World Bank lending, and these seem to be cases in point. Some see a ‘virtual conspiracy’ between the government and agencies like the World Bank to implement projects that fail on multiple grounds, yet are declared ‘satisfactory’ by both sides. Aid supports the agenda of the state, not the private sector.
So what recommendations would you offer to government and donors to transform Tanzanian agriculture?
Neither government nor donors take much notice of independent research findings, unless they are compatible with their interests! But in fact, the scenario I’ve just described is being rapidly overtaken by events. External factors, namely rising global food and oil prices, have prompted global agribusiness conglomerates to take an interest in African countries with supposed land surpluses, including Tanzania, Mozambique and Ethiopia. For a decade, Tanzania has sided with the United States in its global ‘war on terror.’ Tanzania is one of the first three countries to develop a cooperative framework agreement for the US government-led New Alliance on Food Security and Nutrition that was launched at the G-8 summit in May 2012. As part of the agreement, Tanzania commits to policy reforms to create incentives for private sector (i.e. agribusiness) investment.
Tanzania’s latest national agricultural policy initiative - Kilimo Kwanza (‘agriculture first’) - is promoted as the product of Tanzania’s private sector, not the central government or donors. One ambitious recent initiative—the Southern Agricultural Growth Corridor of Tanzania (SAGCOT) —brings together the government and more than twenty global agribusiness interests and international organisations in an ambitious public-private partnership. Local agribusiness cartels in food buying, processing and import-export that have flourished under liberalisation may be challenged by the imminent arrival of big foreign competitors keen to share the potential rents. In this emerging context, bilateral donor agencies--US, UK, Norway--are under pressure to align themselves more closely with their national agribusinesses, and to carry some of the initial investment costs and risks.
Consequently, the steady reassertion of state control of agricultural marketing that we have observed since the late 1990s may be reaching its limits. It remains to be seen whether a new state-agribusiness-aid troika can forge a coherent alternative to the traditional government-donor duopoly. Growing international and local opposition to ‘land-grabbing’ to produce biofuels and food for export and to the introduction of GM seeds will assure a stormy ride for the emerging drivers of agricultural policy in Tanzania, and across the African continent.
PEAPA’s next task is to map this new constellation of forces in both national and regional contexts, factoring in the new players mentioned above, plus CAADP (the Comprehensive African Agricultural Development Programme), AGRA (the Alliance for the Green Revolution in Africa) and a number of other high-profile and ambitious initiatives.
The full report of the Tanzanian case study is available as Working paper 040, FAC Political Economy of Agricultural Policy in Africa, March (www.future-agricultures.org).
Brian Cooksey is an independent researcher based in Dar es Salaam.
This article was published in Great Insights Volume 1, Issue 7 (September 2012)