The Wood Foundation

 

 

 

 

 

 

Tea for the Development of Tanzania

“Chai – Kwa Maendeleo ya Tanzania” is the first TWF programme in East Africa which will see an investment of up to $9million USD over a six year period with the aim of doubling smallholder tea production and increasing farmers’ margins as well as enhancing the competitiveness of the sector. 

The Chai project was launched in joint funding partnership with the Gatsby Foundation, in Tanzania, on the 28th September 2009 and has been developed in association with all stakeholders in the local Tanzanian Tea sector. “Chai” has established a Tanzanian based Tea sector advisory committee to advise us in the implementation of our action plan.

Tea is the fourth largest export crop in Tanzania with $28.7 million USD in export earnings. Approximately 30,000 smallholders are directly engaged in tea production; from the combination of estate workers and smallholder production; the sector supports over 50,000 families.  The Tanzanian tea industry however faces a number of significant challenges which Chai will seek to address through a number of interventions.

In our first year of operation, we undertook significant research into the constraints facing the sector. This gave us an intimate knowledge of the Tanzanian Tea Industry, provided us with a good baseline for measurement, guided our longer term implementation action plan and provided the Tanzanian Tea sector with invaluable data previously unavailable to them.

Based on the conclusions from this research a fairly stark message has emerged - it will not be possible to achieve Chai’s objectives without improving margins for smallholder farmers including a better green leaf price. Without this, the smallholders will lack sufficient incentive to commit enough effort to tea farming while the factories will, in turn, lack the quantity and quality of tea they require. 

In light of these findings Chai launched a matching grant scheme aimed at encouraging private factories to develop smallholder friendly services and is working with farmers associations to develop governance and management as well as working with government institutions to support the revision of farmer pricing mechanisms and revise regulations.

Now, nearly half-way through the original six-year timeline, significant progress has been made and with the support of Chai finance and management, the following achievements have been realised for all 30,000 smallholder tea farmers in Tanzania;

  • Average smallholder share of made tea prices has risen from 26% to 34%
  • Average smallholder yields have risen from 950kg made tea per hectare to 1,100kg made tea per hectare, an increase of 22%
  • Average smallholder profits per hectare have increased by 70% from around US$126 in 2009 to around US$218 in 2011/12 although the average tea farmer only has 0.4 hectares of tea

Where Chai has concentrated support with specific interventions and geographies, the impact on yields and profit per hectare is higher than the national average shown above.