SERA Quarterly Report: July – September, 2011

The Tanzania SERA Project will assist both the Government of the Republic of Tanzania (GoT) and the private sector in enabling a broad‐based, sustainable transformation of the agricultural sector through policy reform.  The project will focus on current policy and the regulatory environment for agriculture—from the transactional “hot” topics to the needed strategic foundational changes— building capacity of local institutions to lead informed dialogue on policy and regulatory issues in the agriculture sector and advocate for the necessary changes.

The vision for this project is twofold: to improve the policy and regulatory environment for agriculture growth and to build a group of public sector institutions, advocacy organizations, and individuals capable of performing rigorous policy analysis in support of evidence‐based advocacy and policy reform. At the conclusion of the project, we expect USAID will leave behind sustainable capacity within the GoT to initiate, develop, and utilize evidence‐based research in policy decisions and implementation, empowering local research and private sector advocacy groups to more effectively use analysis and strategic communications to lobby for change, and building national partnerships that create consensus around agriculture policy and monitor the impacts of policy. The SERA project will focus all activities around priorities identified in collaboration with the Southern Agriculture Growth Corridor of Tanzania (SAGCOT) initiative.

Quarterly Highlights

The Feed the Future Initiative (FtF) in Tanzania began in late May with an Implementing Partners meeting in Kilombero that was attended by the SERA COP, Don Mitchell. The entire Tanzania SERA team was brought together in late June for a work planning meeting and began working full time in July. The Tanzania SERA team included, Don Mitchell as COP, Alex Mkindi as Senior Policy Advisor, Jack Meena as Communications Specialist, and Mary Kabatanga as Office Manager. Implementing Partner Diligent was represented at the work planning meeting by Andy Temu and Rose Mushi. Booz Allen Headquarters staff, Nate Kline, participated in the Implementing Partners meeting and Emily Friedberg participated in the work planning meeting. Violane Konar‐Leacy from Booz Allen HQ became the program manager in September. Jack Meena resigned in September and a replacement is being recruited.

Work Plan for October 2011 – September 2012 Completed – The work plan for the fiscal year beginning October 1, 2011 was completed and submitted to USAID in September. The work plan details work in three areas, policy analysis and reform, communications, and capacity building. The policy analysis and reform identified seven policy areas of focus to be taken up over the next several years and four of these are to be taken up in the first fiscal year. The first year activities will focus on food security, trade policy, credit and inputs. Substantial work has been completed on all of these focus topics, but much remains to be done before the analytical case can be effectively made to the GoT for policy reform. The remaining topics (land policy, business environment, improving markets, and nutrition) will be taken up as resources are available and opportunities to engage the GoT arise. The SERA team will familiarize themselves with the issues in these focus topics in the interim. The communications strategy was being developed by local consultant Jack Meena with support from the SERA team, but Jack resigned in mid‐September. The activity will be taken up again in October when an international expert will work with the SERA team and identify a local candidate to develop and implement the communications strategy for SERA and work with the FtF and SAGCOT communications team. The capacity building activity has been concentrated on improving research capacity, but will broaden to include other topics once the capacity building expert joins the team in January.

Export Ban Analysis – The GoT announced an export ban on food crops in early July and he SERA team immediately began to monitor maize prices in the Dar es Salaam Tandale maize market to determine the impact on wholesale prices. This led to two important conclusions, first that maize prices declined temporarily but quickly returned to the levels prior to the export ban and secondly, that the weekly data provided by the Ministry of Agriculture did not accurately reflect these changes. This was followed by a trip to Arusha by Don Mitchell and Alex Mkindi from August 3‐5 to interview farmers, traders, processors and exporters on the effects of the export ban and these interviews showed that the impact of the ban was much larger than in the Dar market, with farm‐gate maize prices falling by approximately 25% and not recovering quickly as was the case in Dar es Salaam. The interviews also showed that the export ban did not stop exports (but it may have slowed them) and resulted in illegal exports and bribing of government officials and police. This information contributed to a better understanding of the food security issue and the realization that the export ban was ineffective, but used primarily because it was the only policy instrument available to government. The Back‐to‐Office report is attached as Annex 1 and details the information learned and tentative policy conclusions. The trip also resulted in useful information and improved understanding on the seed and agri‐chemical markets.

Food Security – In response to the knowledge gained from the monitoring of maize prices in Dar es Salaam and interviews with stakeholders in Arusha, a one‐page proposal for a Comprehensive Food Security Program was prepared by the COP (Annex 2) as a way to engage the GoT on the need for an alternative to the export ban. This was discussed by the senior management of FtF with P.S. Lyimo in the Prime Minister’s Office and met with a favourable response and a request for a more complete Concept Note. A Draft Concept Note was prepared by the SERA team and discussed with key partners including the World Bank and research group REPOA. Comments were incorporated and a second draft was prepared and is attached as Annex 3. The SERA team is now prepared to work with REPOA to complete a program of work to evaluate the impact of existing polices, estimate the potential market for maize exports in the region, evaluate the food security need and capacity for delivering, and propose alternative policies to deal with food security.

Data Quality Analysis – The SERA team undertook several analyses to check maize price and quantity data to determine its usefulness in evaluating the food security need and current situation. The first check was to compare maize prices obtained from traders in the Dar es Salaam Tandale market with prices collected by the Ministry of Agriculture. The prices obtained from the GoT showed large variability and no clear trend while the maize price data collected from Tandale traders showed less variability, a clear trend, and price movements that appear more consistent with the impacts of the export ban. The second analysis was to compare maize consumption data from the GoT with estimates derived from household surveys and simulation exercises based on macroeconomic and demographic data. Based on this analysis, maize consumption data from the GoT appears to substantially underestimate actual consumption (and by implication production since the balance sheet approach is used to estimate consumption from production, stocks and trade). Household consumption surveys and simulated estimates suggest that consumption and production probably grew at 4% per annum compared to the 1.4% per annum rate estimated by the GoT. The final check was to compare maize wholesale prices obtained from a maize processor in Arusha with price data obtained from the East Africa Grains Council and these two sources were very similar and appear reliable. The analysis of maize prices and consumption and data is included as Annex 4.

Secured Transactions Financing Reform – Improving access to credit is a high priority for economic growth and the commercialization of the agricultural sector, and the Secured Transaction activity is directed at improving the use of moveable assets, such as machinery or vehicles, as collateral. The Secured Transactions activity, when fully implemented, will allow lenders to register their claim to collateral used to secure loans. The activity has three pillars, the legislation that allows the secured financing to operate within the larger legal framework, the registry that will be a secure record of lenders claims against collateral, and capacity building to increase awareness and encourage use of Secured Transaction Financing. The activity was started under the umbrella activity BizClir funded by USAID and implemented by Booz Allen Hamilton in 2010 but was halted in early 2011. The primary consultant, Yair Baranes, who did the initial work on the activity, was brought back from September 2‐19, under SERA to gauge interest in continuing the work and to further explore the parallel activity being undertaken in Zanzibar. The conclusion of the consultant’s visit was that there is substantial interest among the working group formed in the Bank of Tanzania to restart the work and that the separate system being developed for Zanzibar has not progressed and will not be operational in the near term. It was decided by the consultant and SERA team to continue the work on the activity without including Zanzibar. However, it would still be possible for Zanzibar to join the system being developed for the mainland if they chose to at a later stage. Following the departure of the consultant, a letter was drafted by the SERA team and consultant to the Governor of the Bank of Tanzania and sent under the name of the Mission Director of USAID in Tanzania requesting a meeting to introduce the Secured Transactions Financing Reform and answer questions about its benefit and operation. The SERA team is waiting for a response from the Governor of the Bank of Tanzania. The consultant’s trip report is attached as Annex 5.

Seed Policy – The work on reforming seed policy has mostly focused on familiarization with issues by attending a stakeholder’s workshop in June and meeting with seed companies and experts. A value chain analysis is being considered and a draft TOR has been prepared for discussions with the Seed Unit of the Ministry of Agriculture. A meeting with the P.S. Ministry of Agriculture is being requested and will provide an opportunity to assess the GoT’s interest in seed policy reform.

Developing Partnerships – The SERA team has met with a number of groups to build relationships and partnerships to analyze agricultural policies and advocate for policy changes. These groups include ACT, agra‐alliance, East Africa Grains Council, the Policy Working Group, REPOA, and World Bank. These organizations have similar policy objectives to SERA and provide leverage to the advocacy for policy reform. The SERA team is prepared to work with all of these groups to further efforts for policy reform and working relationships have been established with several. The Policy Working Group is focusing on broad agricultural policy reform, but initially it seeks to engage the GoT on the export ban and the Cereals and Other Produce Board. SERA is supporting this effort with analysis and is prepared to provide limited resources to accomplish critical elements to further the policy reform effort. SERA was also requested by the GoT to work with REPOA to develop the Concept Note on Food Security and is doing so. SERA is also working with other implementing partners of FtF to leverage resources and coordinate activities. These activities include co‐sponsoring a policy research seminar series with iAgra at Sokoine University, and collaborating with NAFAKA on a regional study of the potential demand for maize in East Africa. SERA is also monitoring efforts by the Market Based Solutions (MBS) implementing partner of FtF to support passage and implementation of legislations to establish standards and mandates on food fortification to improve nutrition.

Policy Seminar Series at Sokoine University – As part of its capacity building activity, SERA intends to co‐sponsoring a research seminar series at Sokoine University with iAgra which is the FtF implementing partner focusing on education and research. The SERA COP visited Sokoine University on September 23 to meet with David Kraybill the COP of iAgra and several faculty members of the department of agricultural economics to discuss the seminar series. Don Mitchell and David Kraybill also met with the Director of Research and Post‐Graduate Studies, Professor Muhikambele, to inform him of the interest in sponsoring a research seminar series and ask for his support. Professor Muhikambele welcomed the activity and the follow up activity will be to formally request University support and then meet with interested faculty to discuss launching the seminar series. In addition to the seminar series SERA is also interested in sponsoring interns in agricultural policy and other areas as part of its capacity building activity and a promising candidate was identified.

Office Space and Operations – The SERA team was temporarily located in the Coco Plaza Building from July to September in offices leased from TechnoServe while negotiating for permanent space in the Peninsula Building immediately adjacent. Mary Kabatanga, the office manager of SERA, was able to negotiate a favourable lease rate and additional services including secure parking and the SERA team vacated their temporary offices at the end of September and moved to the new offices. The budget for SERA is limited and the team is struggling to fit the large work agenda into the budget space by co‐sponsor activities with other FtF implementing partners and other groups and organizations.

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