Since the start of the project in 2019 we have carried out over 100 interviews with Small Medium Enterprises (SMEs) and stakeholders in the dairy, maize and citrus value chains. We have travelled across eight regions in Tanzania – including Dodoma, Iringa, Morogoro, Pwani, Dar es Salaam, Tanga, Mwanza and Simiyu. The fieldwork has enabled us to implement a detailed firm-level survey with SME business owners and managers. The survey covered the histories of the firms, their upstream and downstream value chain relationships and their perceptions of the political economy of the sectors.
Each survey provided a deep dive into the challenges facing SMEs in urban and rural areas of the country. We also held interviews with key stakeholders in the regions, including regional and district agriculture, business, livestock and health officers. We have interviewed a range of large firms in the sectors. Other key informant interviews with actors in the value chain included primary producers, traders, machine fabricators, wholesalers and retailers, as well as Non-Government Organisations (NGOs) and research institutions.
SME agro-processors make up the majority of processing activities in Tanzania. For example, in the dairy sector SME processors produce pasturized milk and cultured milk (mtindi). In maize processing, SME millers are the backbone of rural manufacturing and produce milled maize in the form of sembe (white maize flour) or dona (brown maize flour) as well as pumba (maize bran) for animal feed.
The citrus value chain is different as there is very little processing in the midstream of the value chain. Most oranges are sold in local markets in Tanzania and Kenya as whole fruit. Processes and technologies for preserving freshness are minimal.
While dairy and maize SME processors are found in all regions of Tanzania, citrus is concentrated in certain areas of the country, including Tanga, the Coast, Zanzibar, Dar es Salaam and Morogoro. Tanga has the largest planted area of orange trees. Tanga sits at the border between Kenya and Tanzania. Orange production has grown significantly in the region over the past twenty years.
In Tanga, we spoke to orange growers who explained the longer history of why farmers had switched to producing oranges and how the varieties that are commonly grown have changed over time. The decision to adopt new varieties depends on market demand. Farmers get to know about market trends through a number of different channels. Traders played a key role in passing on information about market demand in urban centres. However, advice from neighbouring farmers and agricultural extension officers also influenced farmers to adopt new orange varieties.
However, the process of switching between varieties involves many risks for small farmers in terms of securing the market and waiting for the returns on their investments. Currently, the most commonly grown variety is Early Valencia Late Valencia, but many farmers grow a small number of other varieties as a legacy of earlier patterns of market demand.
Despite the abundance of oranges in the region, processing activities such as making juice or concentrate have been difficult to sustain. This means that most oranges are sold as whole fruit in urban markets. Methods and technologies to preserve the quality and freshness of the oranges are minimal. Oranges are transported and stored in open trucks and the level of fruit lost to damage during transport and storage in markets is very high.
We followed the value chain from the farmers to the traders and on to the main fruit markets in Dar es Salaam. Few customers know about the range of oranges that are grown in Tanzania and the price is determined by the size and the seasonal availability. While there is a thriving cross-border trade in oranges to Kenya, exports to other international trading partners remain low.
While large fruit processors buy from traders at the factory gate, SME businesses making fresh juice buy oranges directly from urban markets. SME processors sell processed fruit juice to restaurants and hotels or directly through retail outlets. Only a handful of SME juice companies have invested in packaging and branding. Expanding processing of oranges by SMEs for the domestic market faces a number of challenges, including consumer preferences for other fruit juices such as mango, and from the dominance of other soft drink products in the local market.