The impact of economic reform programmes on coffee growers' incomes in Tanzania.

Coffee has been the most important crop in Tanzania's economy for many years in terms of foreign exchange earnings and employment generation. Coffee sector has experienced a fall in productivity, fluctuation in world market prices, and fall in producer prices. Beginning early 1980's Tanzania like many other developing countries, embarked on reform programmes which inter alia, meant to address the problem of dismal performance of the economy, through reforming some of the policies, institutions, and structures of production. There have been differing perceptions as far as the implementation of these programmes is concerned. Various attempts to assess the effectiveness of these programmes have come up with slightly varying conclusions. Although it is not possible to separate the impact of weather (in general term the natural calamities) which characterise the Tanzanian agriculture, these programmes had if any, little impact in enhancing incomes of coffee growers. The real incomes of farmers derived from sale of coffee have been falling. The reform measures did not simultaneously affect coffee handling institutions, as on one hand government monopoly parastatals which determined producer prices existed, while on the other, input prices were rising mainly due to devaluation and removal of input subsidy. The fall in world coffee prices was further aggravated by the inefficiency in the monopoly parastatals. By 1994, the government control of the coffee market ceased. However, we recommend that the government should closely follow up the conduct of this market, not by controlling as it used to do, but by regulating it, so as to correct the market failure when and wherever it arises. The regulation may be in a form of improving infrastructure, serious sensitisation of peasants on the role of co-operatives in price negotiations, and where necessary setting floor prices may save peasants from exploitation by traders especially in inaccessible areas.