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Tanzania: Exporters Concerned Over Monopoly in the Agro-BusinessWednesday, October 15, 2014 > 09:47:42
FAILURE to access global market information for agro products has been denying farmers' opportunity to get premium earnings that reflect the market price.
Only few business people have access to global market information and have been taking advantage to exploit farmers by giving low prices that does not reflect the market value.
Such excessive monopoly has been hindering small and medium exporters to access information from the international market that could help in supplying goods at the required standards.
According to exporters association, the problem has never been the availability of markets rather poor export structure that hinders small and medium scale enterprises to thrive.
The association asked state and non state actors to act accordingly in addressing excessive market monopoly in the agro-business that has become common in some parts of the country holding back efforts to boost the sector's growth.
Also, TANEXA which is a premiere trade association representing growers, exporters and service providers in export trade said export policies are so weak and contradictory that they have not helped to boost local exports.
The Executive Director with the Tanzania Exporters Association (TANEXA) Mr Mtemi Laurence told the Business Standard that there were plenty opportunities from the traditional west to the currently emerging Asian markets.
"Few rich business people, agents and middlemen have been taking advantage of the lucrative business in agro-products driving out majority of the emerging small and medium traders engage the export trading," he noted.
Such monopoly was becoming unhealthy not only to exporters but largely to majority of farmers engaging in agriculture activities that employs over 70 per cent of the population.
It is also playing down government efforts to alleviate poverty. The agro-business plays an important role in export earnings and job creation.
Some of the agriculture products that have fallen trap of the few business people include cashew nuts, sunflower and rice in some parts of the country.
Mr Laurence said the presence of few crop buyers in some regions, Singida which is famous for sunflower production, Mtwara and Lindi for cashew nuts, as a typical example of such monopoly which has been denying farmers gain premium returns.
The same similar situation is being noticed in areas of rice production where buyers from neighbouring countries go directly to producers due to absence of marketing centres as both parties could meet.
For example, he said currently large number of business people across the East African Community (EAC) was flocking into rice producing areas to engage directly with farmers.
"Despite increased prices for rice across the region, prices given to farmers have never changed," he said. Regarding the cotton farmers, the situation is derailing exporters' access to best prices in the world market as they ought to submit to owners of the ginneries to decide on the pricing mechanisms.
More local businesspeople should be encouraged to take part in the export sector, than it is the case now, calling for the introduction of policies that will define how more members could be empowered towards that goal.
Also despite the increasing both in value and quantity, weak export policy have failed to help exporters benefit from their comparative advantage over others in the region in many fields. The country benefits less from exports, and that TANEXA has done a thorough study and discovered that the country gains less than it is supposed to get from the sector.
"There are about ten companies currently engaging in exports, but their addresses and official information are nowhere to be seen. We call for the government to work on this," he said.
According to him, it was dangerous to the economy that few people dominate the export sector and measures should be in place to encourage other players and empower them accordingly.
TANEXA's boss said it was important that the export sector expands while the government has to see to it that more windows are opened to generate more revenues.
It is high time the government reviewed the export structure which has complicated procedures for the small and medium entrepreneurs taking part in the export business. The review should go together with the creation of export awareness on how to trade profitably.