Tanzania takes new measure to curb sugar price increases

Dar es Salaam. Following a sharp rise in sugar prices earlier this year, the government is taking a series of measures to prevent the situation from happening again.

They include giving the National Food Reserve Agency (NFRA) the authority to buy and store sugar, Agriculture Minister Hussein Bashe told Parliament on Thursday.

Asking Parliament to approve Sh1.249 trillion as the ministry’s budget in 2024/25, Bashe said changes to the law governing the NFRA will be instituted through the 2024 Finance Act.

Sugar shortages, which often lead to sharp price increases, occur frequently in Tanzania; the last cycle began in January 2024.

Bashe said during that period, wholesalers sold the product for between Sh3,800 and Sh4,000 per kilogram, with retail prices ranging between Sh4,500 and Sh5,000.

“Retail prices were reaching between Sh6,000 and Sh10,000 per kilogram in some areas, posing a threat to the country’s security and economy,” he said.

The minister added that the government took several corrective measures, including announcing indicative wholesale prices of between Sh2,600 and Sh2,900 per kilogram and Sh2,700 to Sh3,200 in retail prices.

Bashe said that during that time, the NFRA received permission to import 410,000 tons of sugar.

To further address the issue, the government is expected to amend NFRA regulations and classify sugar as essential for food safety.

The Sugar Law No. 6 of 2001 will soon be amended to allow the NFRA to purchase and store sugar in the national food reserve to avoid periodic shortages.

“This measure aims to eliminate hoarding by some factory owners without compromising the government’s commitment to protecting domestic industries. The government will continue to protect domestic industries and sugarcane farmers, but this protection will not come at the expense of tormenting 61.7 million Tanzanians,” Bashe said.

Sugarcane production will increase from 4,216 million tonnes, which produced 392,724 tonnes of sugar in 2023/24, to 5,200,000 tonnes of cane, which will produce 520,000 tonnes of sugar.

Bashe said the ministry will also work on legal systems for the import of industrial sugar, complete negotiations for tax relief for domestic ethanol production and continue to allocate suitable areas for sugarcane cultivation in the country.

Other strategies include overseeing the expansion of Mtibwa Sugar, the 12,000 hectare Dakawa sugar cane farms; the 13,000 hectare estates of the Kagera sugar factory and empower the TPC and Kilombero sugar factories to increase production.

Meanwhile, the Sh1.249 trillion sought as the Ministry of Agriculture’s budget for the next financial year is 22.3 per cent more than the Sh970 billion approved for 2023/24.

The increase will address several issues in line with the government’s desire to implement six priorities across its 27 strategies.

Bashe described the priorities as increasing productivity and production, providing decent employment opportunities and boosting the participation of youth and women in agriculture.

Others are strengthening food security and nutrition, improving access to markets, capital and exports, strengthening cooperative development and improving the use of information and communications technology (ICT) systems in the sector. Bashe said increasing agricultural productivity through more funding for irrigation and research will ultimately create more jobs for Tanzanians.

Of the total requested, Sh1.03 trillion will go towards development expenditure, with the government planning to increase the size of irrigated land to 1.271 million hectares.

Completion of ongoing and future projects in fiscal year 2024/25, Bashe said, will increase land allocated for irrigation by 105.89 percent of the target of 1.2 million hectares by 2025 and create 2, 17 million jobs.

He said the ministry is requesting Sh393.3 billion for irrigation projects, up from Sh361.5 billion approved in the 2023/2024 financial year.

Furthermore, he said the ministry, through the Tanzania Agricultural Research Institute (Tari), plans to continue conducting research in the 2024/2025 fiscal year.

According to the minister, production of traditional cash crops will increase from 1.26 million tonnes in the financial year 2023/24 to 2.03 million tonnes in the financial year 2024/25.

He said the budget also aims to strengthen extension services by purchasing and distributing 600 motorcycles, 43 soil health testers and vehicles, as well as strengthening monitoring and distribution systems.

The Committee on Industry, Commerce, Agriculture and Livestock of Parliament stated that, although the agricultural budget has increased substantially, it remains insufficient.

Committee chair Mariam Ditopile said the government should improve domestic manufacturing of agricultural inputs, including fertilizers, seeds and pesticides.

“The committee advises the government to allocate a budget to hire enough extension agents to achieve the targeted productivity,” he said.