MMA conducts an assessment of the maize value chain in Tanzania

Helen Keller International (HKI) contracted Match Makers Associates Limited (MMA) to conduct an assessment of maize value chains in Tanzania. The overall objective of the maize value chain mapping exercise was to enable HKI and its partners understand the maize value chain market players and national level dynamics and the scope for collaboration with maize fortification alliances in Tanzania. MMA initiated this assignment in September and duly completed it in November 2014.

Findings from this study provide anecdotal evidence, which affirms that small and medium scale mills dominate milling of maize flour in the country and are responsible for more than 84% of the maize milling. Using the case of Dar es Salaam alone, where most of the milling is concentrated, medium scale millers in Manzese are milling about 80% of maize flowing into the city. It is estimated that four large-scale millers in the country are milling a paltry 928 tons per day (about 40%) of what medium scale milers in the regional towns are milling.

While Tanzania has a transportation advantage for supplying the Kenyan and Horn of Africa markets, it will still need to compete with other exporters in the East Africa region, such as Uganda, and countries in Southern Africa such as Malawi, Zambia, Zimbabwe and South Africa. On the overall, the role of Tanzania in the regional trade is changing progressively. From the discussions with millers, so far, there are many Tanzanian SME processors, who are selling their produce to Kenya and Rwanda, albeit informally. Some SME have established strategic alliances with traders from the region and hence take advantage of these alliances to sell maize flour to these countries.  

This study identified two sets of policies affects the competitiveness of the millers in Tanzania. The first are policies related to increasing tax incomes for the local government authorities. The second categories of policies are those that relate to food security and stabilisation of the market for maize. The local government taxation system increases the costs of transaction costs of maize and maize products. Secondly, the multiple non-tariff barriers such as roadblocks cause delays and inefficiencies, and create the environment for corruption. Food security policies often has destabilised the market for maize. The ban of maize exports depresses the local prices for maize and maize flour, reducing the margins of millers. Secondly, by releasing cheap maize into the market through National Food Reserve Agency (NFRA), causes artificial slump of prices in the market for both maize and maize flour.

It was noted that currently, the penetration of fortified maize flour into the market if very low. The penetration of fortified maize flour is even lowest in the rural markets where demand and awareness is quite low. Indeed, there is potential for collaboration with maize fortification alliance to increase penetration of fortified maize flour in the market. At the moment, there are very few medium scale millers (i.e. those milling 10 to 20 tons a day) and fortification alliance can aim at increasing number of millers fortifying maize flour and ensuring that millers meet standards for food processing. There is a need for more concerted efforts of the different actors undertaking different initiatives towards increasing fortification and consumption of fortified foods.

It has been recommended that crop cess should be reviewed and where possible standardized. In addition, the role of NFRA with regards to food security and stabilizing markets for maize and maize flour should also be critically reviewed. To increase penetration through medium and large-scale millers, this study has identified some millers that can be entry points, some of whom are already working with Tuboreshe Chakula. Furthermore it is recommended that new interventions should also seek to address the current limited supply of equipments, products and services for fortification. So far there is only one agency supplying dosifiers, forticiants and offering training for fortification. Some millers are not getting services for repairs or installation of dosifiers on time. These constraints related to supply of services and equipments need to be addressed.


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