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Low farmgate prices resulting in low income for poor households

  • Remote Monitoring Report
  • Tanzania
  • November 2014
Low farmgate prices resulting in low income for poor households

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  • Key Messages
  • PROJECTED OUTLOOK THROUGH MARCH 2015
  • Key Messages
    • Staple prices are unseasonably low at this time, allowing food access to some poor households, but limiting income for producers. Despite the National Food Reserve Agency’s miaze purchases since September, farmgate prices in the Southern Highlands have not risen. Nationwide, prices are expected to remain low until March.

    • Farmers nationwide are selling their surplus production at very low prices to raise income for food and nonfood needs. Normally prices would have begun to increase by September, but have remained low due to excess supply. Households are unable to purchase agricultural inputs for the coming season and pesticides for proper food storage.  

    • Government assistance to the Rift Valley areas of Dodoma and Singida was anticipated in December/January, but the assessment to plan assistance is underfunded, likely resulting in further delays. These areas will remain Stressed (IPC Phase 2) but are stable due to the available farm labor for the upcoming Msimu season. 

    ZONECURRENT ANOMALIESPROJECTED ANOMALIES
    NationwideLow income from crop sales has constrained purchase of pesticides for proper storage of food stocks.Low income from crop sales will likely suppress labor demand and agricultural input purchase for Masika and Msimu seasons.
    Central Rift Valley in Singida and Dodoma Regions

    Charcoal and firewood sales are limited by environmental laws, reducing incomes.

    Chicken sales are lower than normal due to reduced flock sizes following a Newcastle disease outbreak in September. 
    Government assistance will likely be delayed. Assistance needs are determined by an assessment, but there is not enough funding for the assessment scheduled in November.
    Northeastern, bimodal lowlands in Tanga, Kilimanjaro, and Arusha Regions

    Below normal soil moisture following erratic rainfall at the start of season.

    Destruction of 10 to 30 percent household stock by off season rainfall. 

    Reduced crop production from Vuli season as a result of poor rains.

     


    PROJECTED OUTLOOK THROUGH MARCH 2015

    Seasonal progress: The northwestern bimodal areas are receiving adequate Vuli rains for crop production. Northeastern areas have had a delayed start of season but are expecting average to below average rainfall for the remainder. Land preparation for Msimu season is impeded due to low income from their current maize sales. Tractor and labor hire for land preparation will likely be limited, but otherwise land preparation and planting in the unimodal areas are ongoing. Meteorological forecasts indicate that Msimu rains have started and will be normal to above normal in most areas. Rains have already started in some areas while other areas remain dry. Some parts of Ruvuma will likely have normal  to  below normal rainfall throughout the season.

    Market prices have not significantly improved for poor households despite the above market price purchases by the National Food Reserve Agency (NFRA). Traders in Mbeya, Songea, Mpanda, Makambako, Sumbawanga, Lahera, and Tanga were contracted to collect maize purchased by credit on behalf of the NFRA. However, small scale farmers did not receive the 500 Tanzanian Shillings (TZS) per kilogram (Kg) price offered by the NFRA, rather are selling at 200 to 250 TZS per Kg because their sales volume were too low for the traders.  

    The maize market is flooded with grains, limiting additional post-harvest sales for poor households. The recent above average Masika and Msimu production has resulted in a steady maize and rice price decline since 2012. As a result, prices are below last year and their five-year averages. Prices that normally start increasing in September will likely remain low until the end of December due to the surplus stocks. After December the prices will begin to rise until the peak of the lean season and in March. Purchasing power is lower than normal for rice producing households in the Lake Victoria regions. These households sell rice to purchase maize, their preferred food, but maize prices are higher there due to transport costs from the maize producing Southern Highland areas of Sumbawanga and Mpanda, while rice prices remain low.

    Crop Losses are high. The August to September rainfall in the northeastern bimodal area and the October rains in the unimodal areas of Sumbawanga, Mbeya, and Ruvuma destroyed maize that remained uncovered at the household and market centers. Farmers and traders estimate losses between 25 to 35 percent of their production. Additionally, households with surplus maize may not be able to afford pesticides to store the remaining crops properly, resulting in postharvest losses.

    Minimal (IPC Phase 1) food insecurity expected through the end of March in most areas. Although households have limited cash for non-food items, food stocks will remain available for consumption at the household level. Casual labor dependent households will likely continue accessing food through farm labor incomes assuming prices remain low. 

    The northeastern bimodal lowlands in Tanga, Kilimanjaro, and Arusha Regions

    A dry spell since October in the northeastern bimodal areas is retarding crop and livestock production. Maize production will likely be at least 50 percent lower than normal. Erratic rains at the start of the season slowed crop growth for those farmers who are attempting to grow maize, however about 60 to 70 percent of farmers have reduced or stopped growing maize during this Vuli season. Pasture rejuvenation has also been slow, disrupting livestock movement and milk production.

    For many households, major maize production has shifted to the March to June Masika season. It is anticipated that surplus maize production from Masika season may cover the low production expected from the September to December Vuli season. Production of other crops like beans and potatoes will also likely be lower than normal, due to the poor rains. This may ultimately result in another year of high bean prices due to their specific influence on national prices. Additionally, households that depend on agricultural casual labor will have limited incomes to purchase food as a result of this lower than normal rainfall.

    Poor households will move from Minimal (IPC Phase 1) to Stressed (IPC Phase 2) by December. Casual labor demand is low because of the below normal number of households farming, thus incomes for many poor households are limited. However, food prices are remaining stable, ensuring food access through December. Prices will likely rise as maize market availability declines. Households with limited income may have impaired food access.

    The Central Rift Valley in Dodoma and Singida Regions

    Households remain Stressed (IPC Phase 2): Household food stocks were depleted in August, four months earlier than usual. Income earning activities such as chicken, charcoal, and firewood sales have been limited due to disease and environmental regulation. This has reduced the household’s food access. However, casual labor opportunities are available in the neighboring areas of Handeni, Kiteto, and Kilindi, and land preparation, planting and weeding will be available normally from November until March for the Msimu crops. Low prices and abundant food availability in the local markets from food surplus areas will stabilize the food security situation until the next harvest in April. 

     

    Figures

    Figure 1

    Maize Prices

    Source:

    Figure 2

    SEASONAL CALENDAR IN A TYPICAL YEAR

    Source:

    Figure 3

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    In remote monitoring, a coordinator typically works from a nearby regional office. Relying on partners for data, the coordinator uses scenario development to conduct analysis and produce monthly reports. As less data may be available, remote monitoring reports may have less detail than those from countries with FEWS NET offices. Learn more about our work here.

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