Agriculture in Tanzania: Political priorities trump economic ones when CCM is threathened

Ideological notions about ‘modernising agriculture’ have often motivated the ruling elite in Tanzania to initiate various state actions, but such ideas are now insufficient to overcome the political costs of implementation.

Thus, in 2005, urged by the president, the government decided to boost rice production to improve food security and increase rural incomes. One step was to launch ambitious government funded rural investments in small-scale irrigation. At the same time, Tanzania - together with the other East African Community countries - decided to triple the import-tariff on rice to protect its paddy growers from competition with cheap subsidized rice bought by large local traders on the world market. This double-decision appeared to have high-level political support.

Yet, the implementation has run into problems. The full import tariff is not paid although officially recorded rice import volumes have declined since 2005. Instead, substantial amounts of cheap rice are now smuggled through Zanzibar into Tanzania. Moreover, the sustainability of irrigation schemes is low due to poor local-level operation and maintenance.

On the one hand, smallholder demands for better producer prices through tariff protection and reduction of smuggling are not effective. Growers are poorly organized and do not represent powerful economic interests that could motivate the political elite to respond to their demands. Mutual interests between the political elite and growers are weak.

On the other hand, winning elections and maintaining the coalition that supports the incumbent regime are more important for the ruling elite than improving the economic conditions for paddy growers. Because the isles are very dependent on rice imports, consumers on Zanzibar would have been severely hit if the tax authority had enforced the tariff protection and clamped down on smuggling. At the same time, the risk that CCM, the ruling party in Tanzania since independence, looses the elections on Zanzibar to the opposition is very real. Tariff induced rice price increases are therefore not conducive for CCM’s election winning prospects on the isles. In this situation the tax authority has been loyal to the ruling elite and has not enforced the import tariff, nor has it clamped down on smuggling. As a result, growers suffer while rice consumers and the political elite gain as cheap rice enters Zanzibar and the mainland.

The push for irrigations - the second part of the double-decision - is implemented through local governments. They contract out scheme building to private firms and are also supposed to ensure that growers organize themselves and contribute to the operation and maintenance of schemes. Unfortunately, the latter issues are neglected by the local governments. Building schemes provides better rent opportunities than helping to ensure that completed schemes are functioning in a sustainable manner. Implementation experiences show that such interests of the bureaucrats - who are an important part of the ruling coalition that supports CCM - trump that of growers.

These outcomes fit the predictions of the conceptual model presented in the working paper: 'What Drives States to Support the Development of Productive Sectors? Strategies ruling elites pursue for political survival and their policy implications' byOle Therkildsenand Lindsay Whitfield.
This working paper is based on research carried out under the Elites, Production and Poverty collaborative research program (2008-2011) based at DIIS.