May 28, 2024

TOP AFRICA NEWS

We Digest News to tell the Truth

Tanzania drops sunflower industry boost for 2024 on stalled seed subsidy scheme

By Lizzy Owade

Tanzania’s drive to industrialise its sunflower sector has stumbled for the 2023/2024 growing season on a deal to bulk-source high-yield seeds for the country’s one million sunflower farmers.

The deal, funded by the African Development Bank, was for 700 tonnes of hybrid seeds, to deliver yields and oil up to 65 per cent percent greater than traditional varieties. The government planned to provide the seeds at subsidised prices for the growing season that began in October.

However, the supply has proved difficult to secure on a change of strategy around which hybrid seeds to use.

Tanzania has been investing heavily in sunflower processing to reduce its hefty edible oil imports, which account for between $90m and $250m a year. The government has also moved to introduce tariffs on edible oil imports, and removed VAT on sunflower oil processing equipment, to favour local oil producers.

However, processors are being limited by the lack of domestic raw materials, and their relatively high cost, as a result of farmers’ low yields. Over the last decade, the government and private sector have developed, tested, and launched four hybrid seeds in the market. But uptake has been poor.

The bulk-purchase of subsidised hybrids was designed to catalyse new uptake of the hybrid seeds, which produce far better margins for farmers, can supply an expanded processing sector, and hold the potential to create thousands of new jobs.

However, at the point of tender, the Tanzanian government selected a new entrant to the seed industry to provide 700 tonnes of a new hybrid, currently registered and used in India. The yield and oil content of the new hybrid are not available. It is one of 18 hybrid sunflower seeds registered with the Indian Directorate of Oilseeds Development (DOD), but the only one that is registered without information on its yields and oil content.

It is also not recommended, by the DOD, as ideal or suitable for any area in India. However, it is currently available in large volumes, and has enjoyed price cutting amid rising stockpiles. This meant the new seed industry entrant was able to offer a far lower price for the sunflower seeds than the established suppliers in the country, by sourcing the seeds as an open buyer from India.

But as a single purchase of stockpiled Indian seed, it remains in negotiation, some months later, and has failed to arrive before the season started. When it does arrive it will also then require the creation of new distribution partnerships and networks to deliver.

For Tanzanian farmers, the seed purchase is now unlikely to be available before planting is finished in early 2024, and the new supply will require storage until the 2024/2025 season.

It has also been observed by market specialists that the stockpiles of the new seed in India, which had triggered the price cutting, amount to around 500 tonnes, further slowing the completion of the 700 tonne order.

Print Friendly, PDF & Email

Leave a Reply

TOPAFRICANEWS.COM © All rights reserved.