POVERTY levels deeply entrenched among rural folks can be significantly reduced if smallholder farmers are allowed to go into commercial agriculture with access to lucrative urban markets.
World Bank Lead Economist for Burundi, Tanzania and Uganda, Jacques Morriset said in Dar es Salaam that rural farmers should also diversify into livestock keeping and engage in other business activities.
"People think commercial agriculture is about large scale farming which is not always true, in fact studies in Asia have shown that smallholder farmers can be highly productive," Mr Morriset argued while analyzing the second Tanzania Economic Update report titled, 'Spreading the Wings; From Economic Growth to Shared Prosperity.'
The report which is released twice per year and was first released last January, shows that the country's economy has continued to grow, inflation is going down but poverty levels are still high especially in rural areas where the bulk of the country's over 40 million people live.
"Countries such as Vietnam, Thailand and Malaysia which were at the same level of development with Tanzania in 1970s have made significant progress today partly because of growth of rural smallholder commercial farmers," Morriset argued.
He said as the country is rapidly urbanizing with growth of population expected to reach over 150 million by 2050, rural farmers are going to remain the biggest source of food supply to the growing population of urbanites.
The WB Lead Economist commended the government for targeting rural infrastructure saying roads construction is an important investment that will enable farmers easily access markets hence improve their income to reduce poverty.
According to the report, approximately 30 million people live in rural areas which is an equivalent of 75 per cent but account for 80 per cent of the poor. "A significant proportion of these households live today under conditions very similar to their parents or even their grand parents," the report noted.
The report further noted that Malaysia and Vietnam have managed to keep their smallholder farmers in rural areas while availing them with better infrastructure and access to financial services to get loans for agro-inputs.
"Today these two countries report a per capita income that 14 and 2.5 times higher than Tanzania, what have they done right?" the report wondered. Apart from commercialization of smallholder farmers, the report also advises farmers to start producing high value commodities such as avocados and flowers.
The report also suggests that government should adopt policies that encourage farmers to stay in rural areas and cater for their farms to ensure that food production is sustainable other than allowing mass migration to urban areas.