Tanzania: Act Wants 10 Percent Budget Allocation on Agriculture

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NEXT year's budget allocation to the agriculture sector should reach 10 per cent to enable rapid growth of up to 8 per cent per annum required to transform impoverished rural communities, the Agriculture Council of Tanzania (ACT) has said.

ACT Chairman, Salum Shamte said in Dar es Salaam on Tuesday that the government has an obligation to allocate 10 per cent to the sector as agreed by African Union (AU) Summit in Maputo, Mozambique in July 2003.

"We still have a lot of challenges if the agriculture sector is to grow by at least 8 per cent. We are, however, waiting for budget details from the minister," Mr Shamte who is also Katani Limited Managing Director, said. In 2003, leaders of 53 AU countries agreed in the Mozambican capital to allocate a minimum of 10 per cent of their national budget to the agriculture sector to ensure food security and tame rural poverty by 2015.

An initiative christened Comprehensive Africa Agriculture Development Programme (CAADP) was forged and was geared at ensuring that the sector grows at a minimum of 6 per cent per annum. The programme aims to help African countries reach a higher path of economic growth through agriculturally led development, which eliminates hunger, reduces poverty and food insecurity and enables expansion of exports.

Since then government has not fulfilled the promise although significant improvements in budget allocation have been made with 6.8 per cent set aside by Finance Minister, Mustafa Mkulo last year out of his 13.4trn/- budget, Mr Shamte said although there is progress towards improving the sector's budget allocation thanks to initiatives like 'Kilimo Kwanza,' much more needs to be done.

ACT has also commissioned a study on problems facing collection, use and impact of produce cess on farmers who are forced to pay the tax at farm gate prices without considering whether they made profit or loss out of their investment. Last week, the Tanzania Horticulture Association (TAHA) Executive Director, Jacqueline Mkindi said produce cess and a host of several taxes is suffocating growth of the sub-sector which earns the country over 340 million US dollars (about 540bn/-) per annum or 40 per cent of all export earnings.

In a position paper presented to National Policy Task Force, Ms Mkindi said different district councils charge different produce cess rates while hiked power tariffs have not helped improve reliability of supply. "According to the law, produce cess is charged to the buyers at 3-5 per cent of farm gate price although most districts have resorted to the maximum allowable rate of 5%," she pointed out.

She argued that while horticulture is a unique industry in which commercial production involves mainly producing for selling at the international markets hence producers shoulder the burden of paying produce cess, it is producers who pay. The TAHA chief pointed out that although government recognizes that produce cess is improper and a big burden to farmers which frustrates their productivity and overall welfare, promises of reducing it have not been effected since 2009/10 fiscal year.

Source: http://allafrica.com/stories/201204110091.html