Agriculture holds the promise of transforming Tanzania's economy better than any other sector according to the World Bank, but the government must first fix its policies and regulatory issues.
In its 13th Tanzania Economic Update report dubbed Transforming Agriculture, the World Bank bases its argument on the fact that agriculture provides more than 67 per cent of all the jobs in the country and contributes nearly 30 per cent to the country's total GDP.
"The current trends in agriculture and related value chains offer a tremendous opportunity to catalyze private investment, both local and foreign, and raise the incomes of the poor," said World Bank Country Director for Tanzania Bella Bird when he launched the report on December 3.
Tanzania experienced a steady rise of commercialized and more productive small-scale farmers to 25 per cent from 19 per cent between 2008 and 2014. The proportion of farms that were primarily subsistence-oriented and small-scale fell to 31 per cent in 2014 from 43 per cent in 2008.
"Since 2008, there has been a growing number of medium-scale farmers who have opened up opportunities for smallholder farmers through positive spillovers," reads the report.
About 368,000 medium-scale farms were added in the market, creating over 13 million days of hired agriculture workers.
"The 776,473 medium-scale farmers invest in technology and knowledge, and they attract commercial services that can provide a basis for tax revenue. And the effect of this is that small-scale farms on average improved their farming outcomes," said Holger Kray, World Bank agriculture practice manager and co-author of the report.
Agriculture contributes about $1 billion in earnings to Tanzania's foreign exchange kitty, mainly from cash crop exports -- coffee, cotton, sisal, cashew nuts, tobacco and tea.