Tanzania's coffee sector: constraints and challenges

During the early 1990s, Tanzania embarked in a major reform programme at both macro and sectoral levels. Reforms in agriculture figured prominently, especially in the export crop sectors which during the 1990s accounted for almost two thirds of total merchandize exports. This paper surveys the policy reforms and their impact on the coffee sector, Tanzania's largest export crop. By most accounts, the outcome of reforms has been mixed. While producers' share of export prices increased, official statistics show no supply response. Coffee processing capacity, marketing efficiency, and investment in new plantings increased. Despite the reforms, several issues must are still outstanding. Taxes should be consolidated, lowered, and rationalized. Licensing procedures need to be re-examined. The coffee auction should be voluntary so the costs of vertically integrated exporters will be reduced and cross-border trade will be enhanced. The power of the board and the relevant ministries ought to be substantially reduced and their respective roles clearly defined. Copyright © 2005 John Wiley & Sons, Ltd.