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Restricted procedure: Baseline Study on Horticulture Value Chain-Challenges and Opportunities in Tanzania

Deadline for applications: 30 September 2019, at 14:00, Danish time

Tanzania Agricultural Development Bank is a Development Finance Institution (DFI), wholly owned by the Government of the United Republic of Tanzania.  As an apex policy bank, it's interventions are geared towards increasing productivity in the agriculture sector and transforming smallholder farmers from subsistence to commercial farming. The bank is intended to play the key role of being a catalyst for delivery of short, medium and long-term credit facilities for development of the agriculture sector in Tanzania to inform management and policy decisions. As part of Banks overall financing approach, the Bank has adopted the Clustering and Value Chain Financing approach which has identified eight (8) clusters (consistent with the country’s agro-ecological zones) and value chains of focus based on which the Bank interventions are being implemented. In order to increase the effectiveness of the Bank’s interventions, it is essential that adequate and empirical information relevant to the value chains is gathered and utilized at all stages of the Bank’s planning and implementation process. 

One of the identified value chain is horticulture which is among the main value chains of focus in the Northern Zone of mainland Tanzania and Zanzibar and with great potential for development in other clusters including the Eastern Zone and Southern Highlands. Horticultural production is dominated by smallholder farmers especially in vegetables production and account for about 70% of all vegetable producers in the country. The majority of these farmers have no access to regional and international markets and are excluded from the horticulture export business. At best, some have managed to form producer groups and work under contract farming or out-grower arrangements with large scale exporters. These challenges hinder the sector’s competitiveness compared to neighboring countries like Kenya and Ethiopia let alone global heavy weights like China, Mexico, Peru, South Africa, and Brazil. The implication is that less than 10% of Tanzanian horticultural produce is exported to regional and international markets. Most of the produce is destined to local markets in fresh form given the limited agro-processing capabilities (Agricultural Marketing Policy, 2008).

A significant proportion of horticultural produce also go to waste due to the lack of appropriate post-harvest management facilities and the perishability of horticultural crops. Nevertheless, the horticultural industry has shown great resilience and remains one of fastest growing agricultural sub-sectors in Tanzania and the country is among the world top 20 producers with significant room for expansion. In terms of exports, the subsector generated USD 642 million in export revenues in 2016, a sharp rise from USD 64 million ten years ago and USD 383m in 2012. The recorded exponential growth indicates a positive response by farmers and exporters alike to the growing demand in horticultural produce.

To this end, the Bank approached the Royal Danish Embassy in Dar Es Salaam which has been providing support to business and private sector development in Tanzania since the early 1990’s through the Business Sector Programme Support. Danish support to the Tanzanian business sector is aimed at improving employment and income opportunities for Tanzanians through, inter alia, increased opportunities for technology transfer and sharing of knowledge. It is believed study findings may contribute to ongoing innovation activities through youth and women innovation centers through the Private Agriculture Sector Support, Agriculture Market Development Trust and Financial Sector Deeping Trust.  Recognizing this, the Bank is setting out to support expansion of production of horticultural produce in Tanzania through measures geared towards increasing access to finance particularly to smallholder farmers alongside working with other stakeholders to develop a comprehensive and sustainable horticulture value chain in Tanzania.

The subject matter of the contract, including national administrative and legal frameworks: the objective of the study is to assess the horticulture value chain with a view to uncovering the challenges and opportunities for investment in Tanzania. The baseline study will analyze bottlenecks and opportunities in sector following the wider value chain framework: business environment, value chain activities and supporting functions. Furthermore it will gather, analyse and present latest key information about the sector, which will enable stakeholders to better understand the current overall situation and opportunities that the sector provides for new investments and development of this important area. The information is expected to be generated from mapping of the horticulture value chain by covering actors such as input suppliers, smallholder farmers, medium and large scale farmers, farmers’ organizations, aggregators, traders, processors/exporters, transporters, export and domestic markets, supporting institutions, value chain service providers, research institutions their locations, interests, roles and influences.

This baseline study will be organized in accordance with the stages identified in the mapping of the horticulture value chain. These includes: input supply, production, harvesting and post-harvest management and marketing. The study will identify barriers along various sub-components of the marketing system and factors affecting actors’ decisions to invest and/or participate; and identify the specific role that the Government of Tanzania may play in order to facilitate the whole value chain and smooth functioning of markets of horticultural produce. The study is expected to generate key information pertaining to the market opportunity for expansion of horticulture production in terms of the current and future market potential, production estimations and prospects for increased exports.

Further, the study will generate information on key technical issues related, but not limited to, the location, transportation, technology needs, inputs and labor aspects of promoting smallholder farming horticulture production; information on financial feasibility including estimates of the amount of funding/start-up capital needed and expected returns on investment. Currently the Government of Tanzania is reviewing its National Agriculture Policy where these findings will contribute into its finalization and call for further legal and regulatory reforms. The study is also expected to identify opportunities for increasing the competitiveness of the crops by identifying key bottlenecks along the value chain, with specific emphasis on local value addition, logistics and exports and propose practical solutions to the identified barriers as well as key entry points for interventions from private sector, government and financial institutions such as Tanzania Agriculture Development Bank.

Scope of work:
The study will be undertaken in Tanzania but will not be limited to review of available information and existing research with regard to horticulture value chain in Tanzania including relevant legislation and governance development policies with following key undertakings such as looking into:

Policy environment & institutional analysis. 
Analyse the institutional set-up: identifying and appraising the set of interactions taking place among agents and the formal and/or informal rules governing them; Identification of the market opportunity in terms of gaps in national, regional and global Analysis of the horticulture value chain in Tanzania to examine key barriers to production and competitiveness; Proposing specific interventions to the identified barriers and their likely economic and social outcomes; Identification of potential investment opportunities and propose key entry points for specific interventions strategic crops identified above and Conduct a final presentation and submission of study report and data.

Language requirements: consultants should be fluent in English

The estimated value of the contract: Maximum 300,000.00 DKK

Scope of contract 40 man days

Timing of the consultancy is October to mid December 2019

Deadline for applications: 30 September, at 14:00, Danish time

The standard application form should be used. Applications not using the standard form may be rejected. Applications received after the deadline shall be rejected.

Download the application form here.

Contact point:      
Name of Programme Officer: Jema Jacob Ngwale
E-mail address, Programme Officer:
Telephone of Programme Officer: +255 222165242 or +255 676248453

Criteria for selection:
A minimum of three and a maximum of five applicants with references best suited for this assignment will be invited to submit a tender

This assignment will be awarded to a consultancy firm not individuals