Tanzania changes tune on food exports to East Africa

Saturday September 17 2016

Cereals on sale at a market. PHOTO | FILE

Tanzania is set to introduce new rules on food exports after it lifted a ban that had seen Uganda become the main source of grains in the region. PHOTO | FILE 

By Asterius Banzi and Apolinari Tairo

Tanzania is set to introduce new rules on food exports after it lifted a ban that had seen Uganda become the main source of grains in the region.

The government said the lifting of the ban was prompted by forecast of surpluses. However, exporters will still require permits for rice and maize, and quotas will also be introduced to limit the export quantities.

The Minister for Agriculture, Livestock and Fisheries, Charles Tizeba, said the new rules were meant to curb practices that jeopardise food security such as pre-harvest sale of produce.

“As of now, a company could be permitted to export even 350,000 tonnes of a food crop at a go. This volume is about two times the capacity of the governments’ food reserves,” Mr Tizeba said.

The measures also appear to be aimed at reining in middlemen who capitalise on the harvest season and cash needs of farmers to buy produce at low prices, denying the growers high prices later, and entrenching poverty.

Tanzania’s food projected production for this year is 16.2 million tonnes while the food requirement for next year is 13.2 million tonnes, yielding a surplus of three million tonnes. The harvest of cereals is estimated at 9.5 million tonnes against a domestic consumption of 8.4 million tonnes.

The National Food Reserve Agency has a storage capacity of 246,000 tonnes. Data captured this month shows currently it has a reserve of 67,506 tonnes only of maize, rice and sorghum. Mr Tizeba said the government has disbursed Tsh27.8 billion ($12.7 million) to its zonal offices to enable them buy crops to fill the gap.

Though EAC is a Customs Union, trade in food is one of the sensitive areas that are left to national interests especially with regard to the terms of importing food during deficits and exporting in times of surpluses. However, there are Custom external tariffs for importing maize, wheat and sugar from which countries can seek exemptions in a bid to make the goods affordable by citizens.  

Mr Tizeba said traders were now free to export maize, sorghum, millet, rice, wheat, beans, cassava, potatoes and bananas potentially providing a respite for Rwandans who have over the past two months borne high food prices following a ban of exports there by Burundi.

Tanzania’s Minister for Home Affairs Mwigulu Nchemba had told parliament in July that the country expected a surplus of 2.5 million tonnes of cereals and other crops.

“Based on a reliable rainfall pattern, we expect to harvest a bumper crop in many parts of the country in the September harvest. This will see us continue selling the surplus to neighbouring countries within the EAC,” Mr Nchemba said.

A study on the impact of maize export bans on agricultural growth and household welfare in Tanzania found that the country was hurting itself and its farmers, more than it was improving food security.

The study, which was carried out by Xinshen Diao of the International Food Policy Research Institute, found that banning cross-border maize exports had very little effect on the national food price index, and that the benefits from lower maize prices were captured primarily by urban households, while maize producer prices decreased significantly.

“The export ban further decreases the wage rate for low-skilled labour and the returns to land, while returns to non-agricultural capital  and wage rates for skilled labour increase, further hurting poor rural households and thus increasing poverty for the country as a whole,” concluded the study, published by USAid in January 2016.

When the ban was in force, Uganda emerged as the main exporter of maize to the rest of the region.

Background

Tanzania’s on and off food export bans has often been frustrated by smuggling across porous borders and at times complicity by Customs officials.  

Data from the East Africa Grain Handlers’ Regional Agricultural Trade Intelligence Network shows that while the ban was in force Kenya  imported 13,103 tonnes of maize from Tanzania valued at $3.9 million in the first six months of this year.

The maize entered through the Namanga and Isebania border posts.

Lately, however, Kenya has increased maize imports from Uganda bringing in 11,002 tonnes valued at $3.3 million in the last three weeks. This was presumably after border controls were tightened given that the Uganda maize, at $299 per tonne, was two dollars per tonne more expensive.