Marketing Infrastructure, Value Addition
- Reference: P-TZ-AA0-019
- Approval date: 29/06/2011
- Start date: 22/03/2012
- Appraisal Date: 04/12/2010
- Status: OngoingOnGo
- Implementing Agency: OFFICE OF THE PRIME MINISTER
- Location: 16 REGIONS OF TANZANIA
The overall Programme comprises three major components namely:
(i) Marketing Infrastructure and Systems Development;
(ii) Rural Finance; and
(iii) Programme Coordination as described in Table 2.1. The financing structure of the programme is as follows: ADF will finance the Marketing Infrastructure Development and Value Addition aspects of Component 1 and part of Component 3; while IFAD and AGRA will support the producer empowerment and market linkages activities of Component 1, all of Component 2 and part of Component 3.
Component 1. Marketing Infrastructure and Systems DevelopmentUA 54.29 m [37.78]* The sub-components are:
(i) Marketing InfrastructureUA 35.65 m [33.54]* 1.1 Market Centres: Improved building and service infrastructure for 32 district markets (25 with cold-storage facilities), 2 ice-plants, 4 border markets; and 32 warehouse facilities (6 new and 26 rehabilitation) all with service infrastructure; 1.2 Feeder Roads: Improve 1550 km of district roads to all-weather condition complete with bridges, culverts, and side drains; together with community labour intensive upgrading of 100km of village access tracks; 1.3 Capacity Building: for government staff (16 regions and 32 districts) and beneficiary communities to plan for, implement and manage marketing facilities including supply of office equipment and motorcycles to districts for construction supervision; 1.4 Design: Technical Assistance for detailed design (of standard market buildings and service infrastructure and feeder roads); and construction supervision of markets, storage facilities and roads by district engineers.
(ii) Value AdditionUA 4.26 m [4.24]* 1.5 Rehabilitation and resourcing of 16 Post Harvest (PH) training centres; 1.6 PH Training Centres assisted to undertake various studies, provide training to medium-scale producers and processors and link them up to service providers.
(iii)Producer Empowerment and market linkages UA14.38 m * 1.7 Sensitisation, training, capacity building and knowledge management, and feasibility for Agricultural Commodity Exchange on the warehouse receipt system (WRS); capacity building of producer and marketing groups for preparation of marketing and value addition intervention proposals; facilitating market linkages and support to market information systems.
Component 2.Rural FinanceUA 40.94 m  The sub-component are: 2.1 Grassroots financial services: capacity building/upgrading of 1200 informal financial institutions, 200 SACCOS (20 new) with at least 500 members each, MFIs to expand rural services to 7000-10000 clients; 15 community banks and the apex Community Bank Association.
2.2 Rural Financial Systems Development: Technical Assistance Facility for leveraging the existing US$20 million AGRA designed Tanzanian incentive-Based Sharing System for Agricultural Lending (TIRSAL) to secure US$ 200 million for rural and agricultural lending; capacity building for value chain actors; rural innovation fund (RIF); improving the legal and policy framework for rural micro-finance; and knowledge management
Component 3. Programme CoordinationUA 10.75 m [2.22]* The subcopnents are:
3.1 Planning, management, coordination and implementation of project activities;
3.2 Monitoring and Evaluation including various studies, progress and supervision reports;
3.3 Procurement of relevant office equipment, vehicles.
*Note: Amounts in brackets are ADF portions of the total which exclude duties and taxes
The specific objective of the ADF component is to enhance rural incomes and food security through improved market access (feeder roads, market centres and storage, community management of infrastructure), increased share of value added of small- and medium-scale producers and processors including training and matching grants for equipment.
The MIVARFP has been designed to upscale the successful activities implemented under AMSDP (and IFAD-funded RFSP), deepen access to financial services for agricultural and rural development, and benefit from the emerging experience of the use of a value chain approach by Rural Micro Small and Medium Enterprise Support Programme (MUVI). Strategically, the programme is in line with the Bank's Medium Term Strategy which focuses on agricultural programming through interventions in infrastructure improvement. The Bank has financed the AMSDP, which GOT, the Bank and partner funding institutions have judged as successful. The programme will provide opportunities for leveraging the lessons learned from previous Bank Group and IFAD projects in agricultural and rural development and expand the scope for partnerships to the private sector, and development partners. The partnership between the Bank and IFAD for the financing of MIVARFP is underpinned by the following conclusions from the joint evaluation of the agricultural and rural development policies and operations of the two institutions in Africa: (a) ADB and IFAD have distinct but complementary roles highly relevant to Africa's needs in the field of agriculture and rural development; and (b) It is recommended that ADB and IFAD should deepen their partnership based on their respective areas of comparative advantage. The Bank has a Memorandum of Understanding (MOU) with IFAD, for Bank funding of hardware infrastructure related activities/programmes, while IFAD focuses essentially on the software services. In this programme, the Bank will finance mostly infrastructure while IFAD and AGRA finances the Rural Finance component and the Producer Empowerment sub-component. The Producer empowerment and Rural Finance activities (supported by IFAD & AGRA) will facilitate access to credit by beneficiaries of Bank financed marketing infrastructure, creating complementarities between the different programme activities. The programme will contribute to addressing some of the critical issues for sustained agricultural development and poverty reduction related to private sector development, rural financial services and markets, which are not currently the focus of the ASDP.
It is estimated that over 1.2 million Households (270,000 female-headed) or approximately 6.1 million people will benefit directly or indirectly from the programme. The main benefits expected from Marketing Infrastructure and Systems development are improved market opportunities and increased value addition for the targeted commodities, resulting in increased incomes of the participating smallholder households. These benefits will primarily result from:
(i) improved access to goods, services, markets and information;
(ii) reduced transaction costs;
(iii) increased output and productivity;
(iv) enhanced food safety;
(v) reduced post-harvest losses;
(vi) improved product quality and increased producer (farm gate) prices; and (vii) improved economies of scale. Increased exports and/or reduced imports will result in foreign exchange earnings/savings.
Other institutional benefits expected from the programme are:
(i) effective functioning of producer and marketing groups;
(ii) sustainable management of priority marketing infrastructure investments by district councils and local communities; and
(iii) strengthened capacity of private sector operators to sustainably manage WRS that benefit smallholder farmers. Environmental and social benefits are also expected from the programme focusing on inclusive rural poverty reduction and promotion of sustainable agro-based enterprises. These benefits will positively impact the lives of women who account for about half of the 76% of rural folk engaged in agriculture.
RAMADHANI Salum - RDGE2