Tanzania will lose its market in Rwanda and Uganda if small scale rice farmers will continue to export a mixture of Asian and Tanzanian rice.

The warning was issued by Rwanda after learning that there are businessmen who are purchasing cheap rice from Asia countries and mixing it with small proportions of Tanzanian rice before exporting it to Rwanda.

“Rwanda has warned Tanzanian businessmen that any businessman who exports rice that is mixed with other sample, will be required to pay 75 percent tariff,” said Ikunda Terry, Country Programme Manager of Eastern Africa Grain Council.
He was speaking at a meeting on Tanzania’s Rice Industry that focused on the threats and challenges, which was held in Dare s Salaam at the start of the week.

The meeting was organised
According to him, Rwanda has said it would continue to charge 75 percent tariff on Tanzanian rice that will be found to be mixed with other rice from Asian countries.

He said the rise in tariff would hurt Tanzania’s economy as it would discourage farmers to export their produce since they cannot afford to pay the price.

Elaborating, he said Rwanda has decided to impose the 75 percent tariff on Tanzanian traders if they determine that the rice has been mixed. The aim is to protect their domestic market and rice producers in the East African regional market.

The East Africa Community (EAC) currently considers rice a “sensitive product” and levies a 75 percent tariff because East African rice producers are decades away from having a low-cost base capable of competing with Asian producers.

“The 75 percent Common External Tarrif (CET ) must be strictly enforced to assure Rwanda and Tanzanian prices are high enough to support smallholder farmers and assure duty-free trade with our EAC partner states,” he said.

East Africa’s main competitors are Pakistan, Thailand and have millions of hectares of irrigation built by their governments and donors.

Over the past 60 years, Pakistan has 19 million hectares of irrigation given free to farmers—as well as a greater choice of seed varieties and better pest and disease control solutions.

Also they have better road and power infrastructure, larger fertilizer subsidies, cheaper loans and paddy price support and Thai and Pakistani rice farmerscan produce rice at a much cheaper cost than their East African counterparts East Africa will take decades to catch up with the Asian low cost base. In the meantime, East African rice producers, whose governments lack the financial ability to provide free irrigation and other subsidies, rely on the CET to attain prices that allow profitability.

Rice is a primary staple food crop in Tanzania. According to official Government of Tanzania (GoT) data, annual rice production doubled between 2001 and 2012 as a result of expanded cultivation and now averages about 1.35 million metric tons (MT). In late 2014, the Ministry of Agriculture declared a rice surplus of 700,000 MT.

Tanzania is the largest producer of rice in East Africa.

Source: IPP Media

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