Horticulture

1. Background

The floricultural and horticulture industry in Tanzania has around/approximate 50-100.000 hectares. This is approximate 5-10% of the total farm land under cultivation.

Most of the horticulture lands are located in low and highlands, but export oriented horticulture is concentrated in the higher-altitude temperature zones of Arusha and Kilimanjaro regions. The commercial floricultural belt is almost exclusively in the Arusha and Kilimanjaro regions located, although a few experimental flower farms are located in the higher-altitude temperature zones of the southern Highlands near Iringa-Njombe and Mbeya.

Horticulture and Floriculture Production & Statistics

Tanzania produces 1,709,622 metric tons of fruit, 656,513 metric tons of vegetables and 9,390 metric tons of flowers annually (MAFC, 2012).

Horticulture sub-sector registered a growth of eight to 10 per cent in the last four years before the 2008/2009/2010 global economic crunch.

Currently the country earns only about $200 million annually from the export of horticulture produce, the amount considered far below the existing potentials.

Tanzania Annual Fresh Vegetables, Flowers and Fruits Production 2005/2006-2010/11 (MT).

Floricultural Production

According to the market possibilities, the main export destination of Tanzania’s cut flowers is the European Union. Currently, the Netherlands imports about 90% of Tanzania flowers. The market is open in most European countries for Tanzania flowers using the opportunity granted by the EPA and EBA agreement between the European Union and Tanzania, being a member of the ACP group of countries. There is a growing demand for Tanzania’s flowers in the Gulf States and in the local market for example Dar-es-Salaam, Arusha and Moshi. So it is high time for the farmers in Tanzania to step up and tap the outstanding opportunities that have presented themselves in our fortunate nation.

Cut roses are the main flowers produced in the floricultural industry of Tanzania and account for between 75% and 80% of all flowers produced for export. Flowers are produced as final consumer products and need no processing after harvest. Harvesting can be done three times a year in the case of annual flowers. Most cut roses are produced in Arusha and Kilimanjaro regions.

More than 40 export-oriented floriculture and horticulture enterprises already operate in Tanzania, employing more than 10,000 people. Exports are growing by more than 7% per year.

2. Potential for Investment in Horticultural and Floriculture Industry. 

At present Tanzania has only reached a 10% of the total exports volume/value and jobs generated of the horticulture and floriculture produce/ sector of the East African Region. Therefore there is still a hugh potential to develop horticulture and floriculture in Tanzania, as it has ample land and water resources, but more emphasis has to be placed into training of skilled manpower.

Horticultural and Floricultural Production

Expansion of Horticulture and Floriculture areas:

• The horticulture and floricultural industry and mostly concentrated in the northern regions of Arusha and Kilimanjaro regions, but there is potential to expand the production in Morogoro, Tanga, Iringa and Mbeya regions, which are also viable for the production of flowers and vegetables.

Intensification of Horticulture and Floriculture areas:

• Here the attention should be on procurement of high quality seeds, application of other recommended agronomic practices such land preparation , fertilizers, agro-chemicals and use of trained labor force.

Develop Production and Marketing Infrastructure

• Provision of expertise and direct services in the construction of green houses at affordable costs. The large costs of constructing green houses for the flower industry have kept many investors at bay.
• Establishment of seed farms for flowers. Currently most flower seeds are imported largely from Holland
• Development of adequate (cold) storage and other marketing equipment in collection centers and on international airports (Kilimanjaro and Dar-es-Salaam).
• Provision of cold vans for transporting flowers from farms to airport. Lack of cold vans has stymied the growth of the industry and has kept most small-scale producers away from the industry.
• Establishment of air cargo services for the expanding industry
• Provision of technical support and advisory services especially with regard to inspection and grading of flowers before they are exported.

 Basically potential investors are encouraged to invest in horticulture and floriculture suc-sectors as a good return can be expected in the high potential areas.

 These regions are Arusha, Kilimanjaro, Morogoro, Tanga, Iringa and Mbeya. These regions have a conducive infrastructure system that can aid the transportation of the flowers and vegetables to airports for further exported to the abroad. Producers in Arusha and Kilimanjaro regions have easy access through the Kilimanjaro International Airport (KIA), where Iringa and Mbeya regions are close to the international airport that will be constructed in Mbeya town. Tanga is close by to the Mombasa International Airports and lastly Morogoro region which is a close neighbor to the Dar-esSalaam International Airport. All above mentioned regions have large arable lands suitable for temperate production of fresh and dried flowers for the world market. So in all the five regions pointed, there are investment opportunities for commercial flower and vegetables production. Furthermore there is also the availability of cheap labor which can help to minimize the production cost. So, Tanzania has open doors for investors to exploit these outstanding opportunities / potentials that are available.

Develop Existing and Future Market Potential

The main export destination of Tanzania’s cut flowers is the European Union. Currently, the Netherlands imports about 90% of Tanzania’s flowers. Most are sold at the auctions and therefore preference and price for Tanzania flowers is based on quality. Only about 10% are supplied to retailers in other European countries (Germany, the United Kingdom, Norway, Sweden and Italy) where some bargaining for prices can take place.

Global demand for floriculture and horticulture products is large and growing, particularly in markets that Tanzania is well placed to supply. This global demand has been growing by more than 7% per year; over the same period, production in the traditional (e.g. European) countries has been flat or declining. Demand is growing fast in Asian markets, in countries like China, India and the Middle East. Dubai has recently started the Dubai Flower Centre (with the capacity to become the world’s second largest fresh produce hub) and is seeking to develop new sources of supply.

Infrastructure system

Basically there are vital locations that investors can invest in return for huge dividends due to the potentiality of the location. These regions are Arusha, Kilimanjaro, Morogoro, Tanga, Iringa and Mbeya. These regions have a conducive infrastructure system that can aid the transportation of the flowers and vegetables to the Airports ready to be exported to the abroad. For Arusha and Kilimanjaro have easy access through the Kilimanjaro

International Airport, where Iringa and Mbeya regions are close to the international Airport that will be constructed in Mbeya town, Tanga is close by to the Mombasa International airports and lastly Morogoro region which is a close neighbor to the Dar-es-Salaam

International Airport. Apart from that the regions mentioned above have large arable lands suitable for temperate production of dried flowers for the world market. So in the five regions pointed are all ideal for commercial flower and vegetables production.

Irrigation systems

Floriculture like any other agricultural industries is a farming operation that use the most efficient means of farming irrigation, and in this case, water is a key input. If roses go without water for 24 hours, replanting may be necessary and this is expensive. Farms are therefore located in areas where water supply is assured. Deliberate steps are taken (through reservoirs, boreholes, etc.) to ensure that water availability is at least twice as much as demand at any time. Sources of water include springs, rivers and boreholes.

Drip irrigation is the system most commonly used, being the most efficient available. Six farms uses drip irrigation while the remaining two uses overhead sprinklers.

The sources of water are boreholes, springs and rivers such as Usa and Nduruma in Arusha region.

Employment Opportunities/Possibilities

The sector appears to make intensive use of female labour. It is quite evident that it has created new jobs for women and provided additional income-earning opportunities for field research and case studies were carried out on cut-flower growers who have significantly altered their local production and employment base by entering the cut-flower export market.

Cut-flower production employs 2,347 workers from surrounding villages, the majority (57 per cent) being women, their jobs being harvesting, grading and packing. Men spray, irrigate and do similar manual tasks.

Employment is categorized into four groups – management, skilled labour, casual labour and others (especially the consultants engaged in the maintenance of cooling machinery, extension and quality control services, and marketing).

Local communities have also benefited from increasing incomes. Inter-regional migration has been encouraged from Singida, Dodoma, Tanga and Kilimanjaro. Coffee farmers in the Arumeru district of the Arusha region have sold/leased their farms for cut-flower production.

Most employees come from the surrounding areas with Arusha, Kilimanjaro, Singida, Tanga and Dodoma being the major sources. Seven farms indicated that most of their labour force came from Arusha and Kilimanjaro.

This implies that the labor market allows mobility of workers to the cut-flower industry. These workers are sufficiently adaptable and flexible to respond to changing requirements of the workplace and to enhance the competitiveness and growth of the industry.

3. Financial the Needs of the Entrepreneur in the Horticultural and Floricultural Industry.

Entrepreneurs / farmer groups may seek financial assistance for:

• The Production of Flower Seedlings (including labour costs).
• The Purchase of Farm Inputs (fertilizer, agro-chemicals, sprayers).
• Construction of Greenhouses and Product Handling and Packing facilities.
• The Modernization and or Expansion of Production and Marketing facilities.
• Purchase Transport (possible cold vans) and Equipment.
• (Cold) Storage Facilities, Packaging, Grading and Marketing Equipment
• Installation or Expansion of Irrigation Systems and/or Equipment.

4. How can PASS help farmers in the Horticultural and Floricultural production

• Through Feasibility Studies and Business Plans PASS can assist entrepreneurs access to bank loans (financial linkages).
• Capacity Building of Farmers Groups and Entrepreneur Management Skills.
• Market Survey and Assistance with Market Linkages.
• Support horticulture and floriculture farmers with inadequate amount of collateral / security for a commercial bank loan.

PASS’s core business is to provide advisory and financial services (mainly financial linkage with/out credit guarantee). In this PASS prepares presents to commercial banks and thereafter supports those investments with credit guarantee fund. PASS collaborates with commercial banks in which at present there are seven partner banks.