Tanzanian farmers bear the brunt of maize export restrictions as prices drop
Saturday July 01 2023
Cargo trucks from Tanzania ferrying tons of maize await offloading outside the Mombasa Maize Millers Factory in Kenya. PHOTO | KEVIN ODIT | NMG
Tanzania’s restrictions on cereal exports to Kenya and Uganda have seen prices of maize dip in the country, prompting farmers to petition their Members of Parliament to press the government to liberalise the trade.
Low prices have been recorded in most growing areas in the southern highlands.
MPs this week said maize prices had fallen by more than half, from Tsh90,000 ($37) per 100kg bag to Tsh40,000 ($16.5), with a kilogramme of maize retailing at Tsh400 ($0.16).
The legislators took Finance and Planning Minister Mwigulu Nchemba to task during a House session this week demanding that the government rescind the “unnecessary taxes and restrictions” it had imposed on grain trade and let them sell their produce to neighbouring states.
Tanzania is the major exporter of maize and rice to Kenya and other East and countries, including eastern DR Congo, Burundi and South Sudan.
Read: Tanzania maize exports to Kenya surge sixfold
Deus Sangu, MP for Kwela in Rukwa region, one of the leading maize producing areas, said that farmers have been facing hardship because of the government’s tough conditions.
Dar local office
According to the new guidelines, exporters are required to open and register a local office in Dar es Salaam, which will deal with their exports, and obtaining export licences, which farmers say has introduced barriers to trade and impacted prices.
“The government needs to allow price competition in the market, as farmers are getting little from their efforts despite incurring huge expenses in production,” Mr Sangu said.
Another MP, Aeshi Hillary from the same region, asked the government to suspend the restrictions on maize exports and allow farmers to sell their produce in markets of their choice, inside and outside Tanzania.
Defending the restrictions, Deputy Minister for Investment, Industry and Trade Exaud Kigahe said that Tanzania was trying to “fight exploitation that farmers have experienced for years by middlemen and dishonest traders who have been purchasing crops to farmers at low prices.”
Tanzania insists on the regulations and Agriculture minister Hussein Bashe says between June 1 and 22, his ministry has issued export permits for 32,000 tonnes of maize to regional states.
He said the government has lost taxes and levies on about 700,000 tonnes of maize that had been sold irregularly.
"Food export permits will now be issued online starting this month to ease business," the minister said.
These concerns came as Tanzania continued to field accusations of imposing barriers to intra-EAC trade.
Read: Food fights erupt again in EAC
Early last month, more than 200 trucks carrying about 6,000 tonnes of maize destined for Kenya were blocked at the Namanga border.
They were later allowed in after talks between officials of the two governments, and now Kenya’s EAC minister Rebecca Miano says the dispute had been resolved.
“The Tanzania-Kenya maize export issue at the Namanga border has been resolved,” said Ms Miano told The EastAfrican.
“Once Tanzania finalises its stock audit, the export of the surplus maize will resume uninterrupted. The audit is a public policy measure that is admissible under the EAC trade policy.”
Elsewhere, some 200 trucks ferrying rice and maize flour were last week blocked at the Mutukula border over the same regulations.
Meanwhile, the government has released Tsh320 billion ($132.3 million) for maize and rice purchase during the ongoing harvesting season.
The Ministry of Agriculture said in a report on Tuesday this week that the National Food Reserve Agency (NFRA) will buy 200,000 tonnes of maize and 200,000 tonnes of rice from farmers.
The indicative price for maize will be between Tsh600 ($ 0.24) and Tsh800 ($0.33) and per kilogramme.
Food production
The current annual food production in Tanzania is 17.4 million tonnes, out of which 9.4 million tonnes are cereals and 8 million tonnes are non-cereal crops. Its annual total food demand and consumption, mostly cereal and non-cereal produce by this year, was over 15 million tonnes, with a surplus of 2.4 million tonnes for export.
Data from the Eastern Africa Grain Council shows imports from Tanzania nearly grew five-fold last year to 469,474 tonnes from 98,000 tonnes in 2020.
The development has left processors jostling for stocks that are available locally and a few imports coming in from Zambia.
The Kenya Bureau of Standards (Kebs) said last year that the maize coming in through the Namanga border has significantly declined, confirming that imports into the country at that point is originating from Zambia.
Read: Kenya’s maize imports raise EAC grain trade
Tanzania restricts exports to protect its local stock following poor harvests.
The move by Dodoma has seen Kenya look elsewhere for maize imports as it awaits an expected bumper harvest in August-October.
Ms Miano said the country will soon have enough maize to meet its demand.
“According to the Cereal Millers Association, we have enough maize to meet the local demand,” she told The EastAfrican.
Kenya has been experiencing a steady decline in maize production, from 42 million bags in 2020 to 36 million bags in 2021 due to poor rainfall.
Mithika Linturi, Cabinet Secretary for Agriculture, says the national annual maize requirement is 52 million bags, which includes other uses such as the manufacture of livestock feeds, stock retained as seeds and the manufacture of other products.
In March this year, Mr Linturi said the country had ordered 1.4 million tonnes (10 million bags) of maize and 1.1 million tonnes (six million bags) of rice to breach the deficit. But director-general of the Food and Agriculture Authority Willis Audi said the government had not issued any maize import permits recently.
“In the past two weeks I have not seen any instructions to import maize from anywhere. My understanding would be that we have managed to import enough maize and rice,” Mr Audi said. “But whenever there are shortages, we will look for maize from our neighbours first.”
Kenyan farmers warn
The Kenya Farmers Association has cautioned the government against relying on Tanzania and Ugandan for maize imports, saying the government should invest more in agriculture.
Read: High fertiliser prices threaten food production amid drought worries
“Tanzania’s changing of export rules in the middle of a shortage of maize in the country should sound a warning to the government to invest more in agriculture. The government should intensify investment in local farmers,” said Kipkorir Menjo, the association’s director.
“They should ensure the Agriculture Finance Corporation is given adequate funds so that farmers who may be financially handicapped can access loans and expand their acreage.”
Kenya experienced sufficient rainfall in the past three months in the North Rift and parts of Western with the country expected to have a bumper harvest.
Indeed, the KFA has warned that in two months there will be enough maize and asked the government not to flood the market with imports.
“There is still a shortage of maize and the government can import to bridge the gap, but they should not import more than we need,” Mr Menjo said. “They need to watch out because once the harvest is ready, the market will be flooded.”
Three weeks ago, more than 200 trucks were stuck at the Namanga border as effects of new guidelines continue to bite. Traders said they had incurred huge losses as their goods were unable to cross the border.