Sweden has set aside 9.6bn/-($6m) to support African smallholders in their quest for finances from local institutions.
Implementation of the programme is to be rolled out in the expansive Morogoro Region. It aims at using Tanzania as a model to support other farmers in the rest of Africa, Alliance for Green Revolution in Africa (AGRA) has said.
In an interview with the ‘Daily News,’ AGRA Associate Programme Officer Kithinji Boore said the finances are part of a grand plan to help
smallholders get out of the current situation of being distrusted by main stream financial institutions whenever they need to access finances to increase productivity.
Ms Boore reported that AGRA has kick started the project in Tanzania by extending some $500,000/- (800m/-) aimed at helping small-scale farmers access loans and training them on financial literacy .
The two-year pilot project, titled ‘Financial Literacy Training and Access to Financial Services’ is expected to reach some 4,000 farmers, 200 farmer group representatives, small and medium scale entrepreneurs, agro dealers, banks and other financial institutions in Morogoro Region.
According to Ms Boore, it is only through more training that farmers can extricate themselves from the ‘risk group’ label cut for them by mainstream financial institutions.
She noted that smallholder farmers produce up to 80 per cent of the food consumed around the world and yet they face a myriad of challenges not least limited access to markets, land, financial services, infrastructure and extension.
‘’Given their size, smallholder farmers may find it difficult to compete in changing and increasingly global markets, particularly when faced with the threats of resource scarcity,’’ Ms Boore added.
She said a key approach in addressing food insecurity is to focus on making food more accessible by empowering smallholder farmers.
Studies conducted over many decades show that smallholder farmers can actually produce more food when they have adequate access to land, resources and input.
Ms Boore noted that smallholder farmers can generally feed themselves if their agricultural production does not get disrupted when faced with crises such as drought, extreme weather conditions or an unexpected financial emergency.
The Magadu Entrepreneurships and Business Training Institute (MEBTI) would implement the project with other institutions like Rural Finance Knowledge Management Partnership (KMP), International Fund for Agricultural Development (IFAD) and African Rural Agricultural Credit Association (AFRACA).
The MEBTI Managing Director, Prof Lascelles Chen, said they would infuse graduates from Sokoine University of Agriculture and Nation Network of Farmers Groups in Tanzania to drive the project’s goal forward.
Approximately 10 per cent of the farmland remains unused largely because of technological constraints and lack of human and financial capacity.
For instance, in 2008 only 18.6 per cent of farms used an ox and 3.1 per cent a tractor.
There are already quite a few medium to large farms in Tanzania: About 20 per cent of farm households report owning more than five hectares of land.
By ORTON KIISHWEKO, Tanzania Daily News
