Tanzania’s Coffee Sector : Constraints and Challenges in a Global Environment
Coffee, Tanzania's largest export crop, contributes about 115 dollars to the country 's export earnings. About 95 percent of coffee is produced by some 400,000 smallholders on average plots of 1-2 hectares. Most do not use purchased input...
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| Format: | Brief |
| Language: | English |
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World Bank, Washington, DC
2012
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| Online Access: | http://documents.worldbank.org/curated/en/2004/04/5529484/tanzanias-coffee-sector-constraints-challenges-global-environment http://hdl.handle.net/10986/9695 |
| Summary: | Coffee, Tanzania's largest export
crop, contributes about 115 dollars to the country 's
export earnings. About 95 percent of coffee is produced by
some 400,000 smallholders on average plots of 1-2 hectares.
Most do not use purchased inputs such as chemicals and
fertilizers. Before 1990 all coffee marketing (including
input provision, transportation, and processing) was handled
by the state coffee board and the cooperative unions. Modest
reforms were implemented in 1990 affecting inputs, price
announcements, and retention of dollar export earnings. More
comprehensive reforms were introduced beginning in 1994/95,
allowing private traders to purchase coffee directly from
growers and process it in their own factories for the first
time in more than 30 years. While producers ' share of
export prices increased, official statistics show no supply
response. Coffee processing capacity, marketing efficiency,
and investment in new plantings increased. Several issues
remain to be addressed. Taxes should be consolidated,
lowered, and rationalized across all export crops and other
exports and the tax code should be simplified. Licensing
procedures need to be reexamined. Licenses should be
suspended only in accordance with the Coffee Industry Act of
2001, and not in response to requests by the cooperative
unions or the Ministry of Cooperatives. The coffee auction
should be voluntary, substantially reducing the costs of
vertically integrated exporters and enhancing cross-border
trade. The Tanzanian Coffee Board should be responsible for
disseminating price and other information and for monitoring
the quality of auction coffee sales and other coffee
statistics. The power of the board and the ministry ought to
be substantially reduced and their respective roles clearly defined. |
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