17 January 2013

Tanzania: Crop Cess, Hiked Land Rent for Review, Says Chiza

CROP cess and hiked land rent that the private sector has singled out as the most stumbling blocks in the rapid growth of the agriculture sector are up for review.

The Minister for Agriculture, Food Security and Cooperatives, Engineer Christopher Chiza, said in Dar es Salaam while officiating at an Agriculture Council of Tanzania (ACT) annual meeting that the sector remains the backbone of the country's economy.

"The government recognizes the importance of the private sector in agriculture... we are going to address most of your concerns so that we spur rapid growth," said Engineer Chiza in a speech read on his behalf by Deputy Permanent Secretary at the ministry.

He said while the government targeted annual growth of six per cent in the past five years when Agriculture Sector Development Programme was initiated, so far growth has not surpassed 3.6 per cent. Touting private sector's active involvement in the sector under Southern Agriculture Growth Corridor of Tanzania (SAGCOT), Eng Chiza stressed that the government wants to see more private investment in the sector.

"We hope that if the private sector's interest in agriculture grows like it's in tourism, manufacturing and other sectors, then growth will be rapid and sustainable," he pointed out. The minister also affirmed the government's commitment to invest heavily in the sector by allocating 10 per cent of the annual budget as agreed by the African Union (AU) heads of state and government in Maputo, Mozambique in 2003.

In his welcoming remarks, ACT Chairman, Salum Shamte said crop cess and hiked land rent are holding back progress in private investment that is needed to spur rapid growth in the sector. ACT groups together private sector key players in agriculture.

"Last year, land rent was increased by 500 per cent from 200/- per hectare to 1,000/- which is very high and backpedals progress being made in formalization of farms because only title deed holders pay this annual rent," Mr Shamte who is also Managing Director of Tanga based Katani Limited, lamented.

Farmers also pay crop cess of between three and five per cent to district councils while numerous road blocks from rural farms to urban markets frustrates their efforts to maximize profits. "In agricultural sector we pay taxes 17 times of our colleagues in manufacturing sector," the ACT Chairman noted.

Mr Shamte also urged government to formalize agriculture land as is the case with conservation land, mining areas and manufacturing areas so that regular conflicts don't occur between farmers and pastoralists. Agriculture contributes 23.5 per cent to the country's gross domestic product, over 40 per cent of foreign currency earnings and over 90 per cent of the country's food needs, annually.

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