THE SCOPE OF AGRIBUSINESS AND AGRICULTURAL EXPORT IN TANZANIA

By Rajabu Juma Rajabu – Art in Tanzania internship

Marketing and Management

THE SCOPE OF AGRIBUSINESS:

Agribusiness is a business sector that encompasses farming and related commercial activities. It is sometimes referred to as Commercial Agriculture.

Definition: Agribusiness is a combination of two broader things or words, “Agriculture “and “Business”, and refers to any business related to farming and farming-related commercial activities. This involves all the steps required to send agricultural products or goods to the market. As we know, agribusiness issues start primarily from Production and are then followed by Processing, Transportation, and Distribution, up to the final step of Consumption.

Agribusiness encompasses all activities within the agricultural, food, and natural resources industry that are involved in the production of food and fibre. Individual agribusinesses may sell items to farmers for production, provide services to other agricultural businesses, or market, transport, process, and distribute agricultural products or commodities.

DEFINITIONS OF THE TERMS:

Agri Services are activities that are valuable to the user or buyer. They are intangible products.

Marketing – providing the products and services people want, when and where they want them.

Agribusiness processes input into outputs. An input is a resource used in production, and an output is the result of the production process after processing the inputs.

Production is the act of creating products, such as goods and services.

Agribusiness provides people with food, clothing, and shelter. It also creates millions of jobs in science, research, engineering, education, advertising, government agencies, trade organisations, and community organisations.

Both small and large farmers can engage in agribusiness. It is a crucial component of the country’s economy, as it contributes a substantial amount to the national GDP. The agricultural sector is fundamental to the economies of developing countries, especially in Tanzania.

According to the economic data from the National Data of Tanzania Mainland for the period 2013-2019, as reported by the National Bureau of Statistics, the agricultural sector contributes 29.1 per cent of the national GDP at the current market price.

In November 2020, President Magufuli announced that his government will emphasise key economic sectors, especially agriculture, in the next five years.

Agribusiness sectors

Agribusiness can be divided into significant sectors like:

1. The agribusiness INPUT SECTOR. This includes all resources involved in the production of farm commodities. I.e., includes seeds, fertiliser, machinery, fuel, and credit. Production efficiency can also be linked to improvement in these agricultural inputs.
2. The agribusiness OUTPUT SECTOR includes any agribusiness that affects agricultural commodities or goods between production and the consumer. This includes transportation, selling, storing, and inspection. Millions of people are employed in the agribusiness sector.
3. The AGRI-SERVICE SECTOR includes people researching new ways of producing and marketing agricultural products. They protect food producers and provide specialised services to all areas of agriculture. Both public and private agencies are responsible for the actions of the Agri-services sector.

Economic Impact of the Agribusiness Industry in Tanzania

• Creation of employment opportunities, both direct and indirect, in agricultural activities
• Expansion of trade and Market
• Source of government earnings, such as taxes
• Improvement of productivity performance
• Improvement of the living standards of the citizens
• Development of Industrial sectors from raw materials obtained from agriculture
• Poverty reduction.
• Construction of infrastructure like roads, industries, and schools

AGRICULTURAL EXPORTS IN TANZANIA

Agribusiness encompasses a vast scope that also includes agricultural exportation.

Agricultural export refers to the production of farm products for sale or export outside the country. Tanzania is one of many countries that export agricultural products to other countries. Examples of different countries include Kenya, Uganda, Rwanda, Mozambique, the Democratic Republic of the Congo, Zambia, Burundi, India, the United Arab Emirates, and China.

Tanzania’s major exports are agricultural products such as Coffee, Cotton, Tobacco, cashew nuts, Tea, Cloves, Sisal, and Maize. Additionally, some farmers raise livestock for export, including cattle, goats, sheep, pigs, chickens, and small numbers of turkeys, ducks, rabbits, donkeys, and horses.

The most common foods and cash crops in Tanzania are maize, cassava, sweet potatoes, bananas, sorghum, and sugar cane.

Agriculture is a source of food, industrial raw materials, and even foreign exchange earnings for countries that import Tanzania’s agricultural products or commodities. Agriculture is a critical economic sector representing 29.1 per cent of the National GDP, almost three-quarters of the productive workforce and more than 30 per cent of export earnings. Agricultural exports have been growing at a rate of about 6 per cent per year, while food crop production has increased at a rate of about 4 per cent per year.

Importances of Agricultural exports in the Tanzanian economy:

• Employment opportunities, both direct and indirect
• Provide taxes to support government services
• Create International relationships
• Market expansions and Trade growth, like forex markets
• Improve productivity for the farmers