Daniel Semberya | April 24, 2017
Utiga is a small village in Tanzania’s Njombe Region, more than 700 kilometres from Dar es Salaam and close to both the Zambian and Malawian borders. This is the Southern Highlands area of Tanzania, where many farmers grow soya beans.
Daniel Lungo is a small-scale farmer who grows soya bean. But he is struggling to get a good price, and this is discouraging him from expanding his production. Farmers in this area are being encouraged to invest in expanded soya bean production, but are receiving low prices despite the high demand for soya beans from companies that process soya into food for humans and animals.
Mr. Lungo explains: “The challenge we have been facing is on pricing. Traders usually enjoy [a] price monopoly by arranging a price for our soya bean. A trader proposes a lower price than even the costs used to produce them. He does this without considering how much farmers have toiled and the expenses they have incurred until harvesting period.”
Farmers often feel they are forced to accept the low prices offered by middlemen, who then sell the product for a higher profit.
Mr. Lungo says he spent 40,000 Tanzanian shillings ($17.70 US) to prepare his field, and an additional 100,000 Tanzanian shillings ($44 US) for seeds, fertilizers, and pesticides.
To get a better price, Mr. Lungo decided to transport his product to a distant market where middlemen sell soya bean. He spent 300,000 Tanzanian shillings ($133 US) to transport 60 bags of soya bean by bus from Njombe to Morogoro—a distance of 500 kilometres. There, he sold each bag for 35,000 Tanzanian shillings. After paying his expenses, he earned a profit of 460,000 Tanzanian shillings ($204 US).
He says, “It is cheaper to transport goods to the market using passenger buses than hiring lorries from Njombe to the market.”
While Mr. Lungo worked hard to market his soya beans, other farmers have focused on home production because they don’t think soya beans are profitable. Frank Mwagike is a father of 10 who farms 60 kilometres from Njombe town. The 56-year-old has been growing soya bean for more than 15 years, but marketing problems have persuaded him to grow soya beans on smaller and smaller plots of land.
Mr. Mwagike says that, when he started growing soya beans in 2001 on a very small plot, it was for domestic consumption. He could not find a market for his surplus soya beans. He says, “I stayed with my soya beans even for three months without getting a buyer.”
But an NGO in the area is encouraging farmers to grow soya beans for sale, and Mr. Mwagike is now growing soya beans on a plot that is three-quarters of an acre in size.
Farm Input Promotions Africa, known as FIPS, is an NGO that works in the Njombe area to support soya bean farmers to increase their production. Deo Msemwa is the operations manager.
He says that farmers’ production is sometimes too small and, as a result, buyers decide to go where they can get the quantity they need.
One such buyer is Highlands Iringa Company, which processes soya beans into nutritional foods such as protein-rich porridge. Other major buyers include Silver Lands of Iringa and TanFeed of Morogoro. These buyers process soya beans into food for chickens and for human consumption.
Mr. Msemwa explains, “The annual demand of the soya bean buyers is over 100 tonnes, while our farmers’ production is below 10 tonnes. Thus, one can’t claim that there is no market.”
Domestic supply is so low that soya beans are being imported from Zambia and other countries. Geoffrey Israel Kirenga is the chief executive officer of the Southern Agricultural Growth Corridor of Tanzania Centre Ltd.
Mr. Kirenga explains, “The Southern Highland alone has the capacity of producing up to two million tonnes of soya beans, but they produced very little.” He suggests that more investment in soya bean production is needed to compete with imports.
FIPS is encouraging farmers to increase their production by providing them with information on new techniques. One strategy is to use improved seeds, which are resistant to diseases and give high yields. Also, farmers can increase their marketing power by creating a group to sell their product collectively, as larger quantities may attract more buyers—and a better price.
Salome Kinyunyu is one of the many farmers who have been encouraged by FIPS to switch to soya beans for a good income. The 38-year-old mother of one farms in Litundu village. She explains: “I was very reluctant to start growing this crop because farmers who were cultivating told us that the crop had no market…. But I started growing it after encouragement from Farm Input Promotions Africa. They are telling us that the market of soya bean is available.”
While many farmers in Njombe are hoping soya beans is the good investment they were promised, Mr. Lungo is discouraged by the poor market and is not confident about investing in the crop. He says, “It demoralizes the spirit of expanding the size of our farms, because I see there is no need of growing many acres while there is no market for the crop.”
This work was carried out with the aid of a grant from the International Development Research Centre, Ottawa, Canada, www.idrc.ca, and with financial support from the Government of Canada, provided through Global Affairs Canada, www.international.gc.ca