Agricultural Growth and Poverty Reduction in Tanzania 2000-2010: Where Has Agriculture Worked for the Poor and What Can We Learn from This?

Abstract

Agriculture is an economic activity important to achieving the poverty reduction strategy goals of Tanzania. Growth in agriculture has made contributions to GDP, foreign exchange earnings, and income poverty reduction. However, despite high growth, the growth pattern in agriculture (which employed about 70 percent of the population between 1998 and 2009) is not reflected in poverty reduction, particularly in rural areas. Using quantitative and qualitative data collected from rural farmers in Mwanza, Newala and Rukwa regions, this paper unpacks growth and poverty transmission routes, identifies growth barriers for agricultural incomes, and analyses where agricultural growth has occurred and if that growth has been transmitted into poverty reduction. Findings indicate that the pattern of economic growth in the past decade was largely influenced by the service and industry sectors; and less by agriculture where annual growth has been slow, following persistent low and declining productivity caused by low utilisation of fertiliser and improved seeds, and the low rate of mechanisation. Evidence gathered from our six research sites also noted barriers to production and markets. Trade and export of cashew nuts and non-traditional items like mango and cut flowers were important routes for income growth, but poor farmers had limited access compared to their richer counterparts. We conclude in this paper that further measures are needed to stimulate higher productivity and income growth associated with new technology, secure markets, mixed farming (diversification of crops and livestock) and efficient institutions (warehouse and credit schemes).

Keywords: agriculture, growth, poverty reduction, Tanzania