By Guido Guerra, senior analyst
Iringa Farmers Cooperative Union (IFCU) is a secondary level cooperative that groups more than 5,000 farmers through 45 affiliated primary cooperatives that operate in the districts of Iringa, Kilolo, Mafinga and Mufindi, inside Iringa region located in the center of Tanzania.
The common needs of the farmers that established this union back in 1993 were the access to agricultural inputs and markets to sell their crops at a reasonable time and price. Needs that, as for most farmers in developing countries, remain a challenge.
That is why, in August 2019, Agriterra supported IFCU to develop a strategic analysis of its maize and rice business activities to find how these can be strengthened as to make them economically viable for the cooperative and its farmer members. The analysis was supported by the Dutch Agripooler Eric Zwart, from Rabobank, who trained the union to prepare a strategic plan.
1️⃣ The first step was to identify IFCU’s vision which, after much discussion, was stated as increasing the standard of living of its farmer members and their families.
2️⃣ The second step was to identify clear strategies to reach the vision: (1) provide knowledge to farmers, (2) promote collective crop sales through a centralised warehouse, (3) provide mechanisation services to farmers and, last but not least, (4) provide better access to farm inputs, particularly fertilisers.
3️⃣ Then, in a third step, the union included in its operational plan clear-cut activities, such as meeting and bargaining with fertiliser supply firms, to implement the strategies.
Following the strategic plan, in September 2019, Agriterra recruited the local Agripool expert James Hangi to train the union on good agricultural practices for maize, rice and sunflower farming. The training introduced topics such as how to prepare a cropping calendar, when to use fertilisers, herbicides and pesticides, how to manage harvest and post-harvest operations and what are the market requirements. Farmers were enthusiastic to learn but complained that, often, they go about in search of farm inputs but end up being cheated on price or quality by petty vendors.
Thus, it was proposed that IFCU should purchase agricultural inputs in bulk from reputed suppliers instead of letting its farmer members fend for themselves by relying on untrustworthy local vendors. However, at the time, IFCU had insufficient working capital to manage the provision of these vital supplies despite several unsuccessful efforts to raise capital from private banks
Nevertheless, Agriterra continued to support IFCU by training, in February 2020, 30 lead farmers on record keeping. Subsequently, these lead farmers rolled out further trainings on how to record and calculate the cost of production and profits to improve maize, bean, sunflower and rice farming, aiming to reach 600 farmers over the next two years. During a follow-up training done in September 2021, IFCU reported a total of 463 farmers trained and an implementation rate of record-keeping practices close to 50 percent of the farmers trained. It was from these trainings that more farmers understood the value of buying good agricultural inputs to keep costs low and increase their productivity.
Therefore, after all these trainings, during the 2022 annual general meeting held in June, the board of IFCU voted in favour of buying fertiliser in bulk from well-known suppliers to sell it to farmer members at a competitive price. However, IFCU still did not have sufficient working capital and banks were unwilling to lend the money. That is why IFCU applied for a bank guarantee (performance bond) instead, to back the purchase contract and eliminate the supplier’s financial risks. As a result, in October 2022, the Tanzania Agricultural Development Bank (TADB) approved a guarantee of TZS 915,000,000 in favour of the fertiliser supplier to sell to IFCU 8,517 bags of blended nitrogen, phosphorus, sulphur and Zinc (NPSZn) fertiliser to be distributed among its farmer members.