Tanzania is hesitant to fully open its doors to large-scale commercial farming for fear of creating a class of landless people in the country.

Although allocating land for large-scale farming could foster growth of a vibrant agro-business industry and create jobs, it would also force people out of their land, the government said.

The government has asked researchers to find ways of integrating co-operative unions into the agricultural value chain to harness economic benefits while retaining the land for the local people.

The Minister for Agriculture, Adolf Mkenda, believes that if smallholder farmers were organised into co-operative unions, economies of scale could be harnessed, efficiency could be promoted and productivity could be uplifted enough to register achievements similar to those gained by large-scale commercial farmers.

"If we’re to amalgamate smallholder farmers into large-scale commercial farming, they can equally command strong bargaining power in the market, but the question is how to make such arrangements harness the full potential for the crop industry and at the same time bolster development of agro-processing industry as large-scale commercial farming does," said Prof Mkenda, who was speaking at a conference in Moshi under the theme Co-operatives and Industrialisation: Putting Members at the Centre.

He attributed widespread poverty and economic inequality facing rural areas in the country to extremely low output from the agricultural sector.

About 60 per cent of the labour force in Tanzania is in agriculture, mostly in crop farming. However, the sector only contributes 15 per cent to GDP. The country pursues a hybrid agriculture comprising smallholder and large commercial farming with the former dominating the sector.

The National Bureau of Statistics (NBS) estimates that the country has 1,093 large commercial farm holdings of which 135 (12.4 per cent) belong to the government, 41 (3.8 per cent) to parastatals, 504 (46.1) privately registered, 362 (33 per cent) non-privately registered, and 51 (4.7 per cent) other forms of ownership.

The 2019/2020 Agriculture National Sample Census by the NBS found that 64.9 per cent of households engage in smallholder farming, cultivating between 0.01 and over five acres each. Going by the census, the households are home to 40,992,747 people.

Smallholder farmers carry out rain-fed agriculture to produce a variety of food and cash crops. The main food crops are maize, sorghum, millet, cassava, sweet potatoes, bananas, pulses, paddy and wheat. Cash crops include coffee, cashew nut, tea, cotton, tobacco and sisal.

Elsewhere, concerns over economic inequality were an important driving force towards a robust co-operative arrangement for seeking common market solutions and sharing overhead costs of production activities, Prof Mkenda said.

The registrar of Co-operative Societies, Benson Ndiege, cited Japan as among countries in the world whose cooperative unions were also engaging in agro-processing.

Much as the fourth revolution was governed by information and communication technology, integrating the technology into co-operative unions was inevitable, said Dr Ndiege, adding that agro-processing should extend from traditional to dairy, honey, sunflower and other emerging crops.

The three-day conference, which attracted participants from Africa and Europe, was organised by Moshi Co-operative University and the Tanzania Co-operative Development Commission.