The Tanzanian government announces measures to help the wheat industry to develop.
The agreement, signed on January 23, 2021, with grain producers sets the minimum price per kilogram of raw wheat at $ 0.32.
It requires the private sector operating state-owned wheat farms to take over large-scale operations and requires private millers to buy wheat from local producers instead of import. In return, the public authorities commit to invest $ 66.7 million in research and development to improve agricultural production and $ 1.7 million to provide improved wheat seeds to smallholder farmers, as well as to guarantee them loans at the interest rate of 2%.
These reforms aim to develop the integrated wheat sector and gradually reduce wheat imports.
While wheat is Tanzania’s fourth most consumed crop after corn, cassava, and rice, the current annual local production of 100,000 tons accounts for only 10 percent of total domestic consumption and the deficit is offset by imports. Over 90 percent of wheat produced in Tanzania comes from the northern highlands (Arusha, Kilimanjaro, and Manyara regions) and the southern highlands (Iringa, Mbeya regions). Production in the southern highlands is predominantly small scale and large scale in the northern highlands. Approximately 100,000 ha are currently devoted to wheat production.
The wheat milling industry is dominated by companies based in Dar es Salaam, and supplies wheat products to consumers in all regions of Tanzania. Wheat consumption is higher in urban areas and the growth of major cities like Dar es Salaam, Mwanza and Arusha will further spur demand for wheat products. The main growth categories for the wheat industry are pasta, biscuits, and breakfast cereals.
Imports are estimated at between 800,000 and 1 million metric tons per year. Tanzania commercially imports wheat from Russia, Australia, Canada, Germany, and Brazil. Wheat imports from the United States are primarily for food aid programs.
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