The president believes that the system is of immense benefit to farmers. He is right. The system is a fabulous initiative that requires villages to have crop banks (warehouses) for stortage of farm produce. The crops remain in storage the way money remains in a bank.
Construction of crop banks is in line with the Warehouse Receipts Act of 2005. When a Bill was tabled in Parliament seeking the establishment of crop banks in all 12,000 villages nation-wide not many legislators understood. A crop bank? What do you mean?
The Bill appeared to be a controversial, unconstructive effort. It ran into stiff opposition at a seminar for Members of Parliament in July of that year. Some legislators thought it would graduate into "a very bad law." The Bill required farmers to shunt their produce into established warehouses (or crop banks) and return home with delivery receipts -- not money. The farmers would use these receipts as collateral to obtain monetary loans from financial institutions.
But some MPs contended that there was no point in storing farmers' produce in warehouses. They reasoned that farmers needed to sell their produce in cash and spend the money on essentials such as fertilizers, food, hoes, blankets, shoes, school fees and others.
The MPs said that farmers had immovable assets in the form of plots of arable land or even farms. "These immovable properties could swiftly be used as collateral in banks to obtain loans," they pointed out. One legislator suspected that the Ministry of Cooperatives and Marketing must have borrowed the "crude" idea from South Africa where farmers are wealthy individuals who engaged in big-time mechanical agriculture realizing bumper harvests.
The legislator said that the idea could be a brilliant one in the South African situation; but it, certainly, could not suit the condition in rural Tanzania where most of the producers are poor small-scale subsistence farmers. He said he did not expect the Bill to help a small-time farmer who tills the land with a hand hoe. Another legislator wondered where each farmer would get the money to pay for transportation of produce to the warehouses.
"What farmers need is hard cash for their produce, not receipts!" he insisted. The Bill, finally, saw the light of day. It was endorsed and has graduated into "a good law." It is imperative for us to point out here that the plan is tailored to promote national economy and cut back on poverty. Crop banks have numerous benefits for farmers apart from enabling them to borrow money from financial institutions. The banks will reduce crop losses and boost food security both for farmers and the nation.
The crops would also be stored safely, ensuring quality control. The warehouses would also act as a hedge against price falls. Farmers would decide to sell their crops at the opportune moment without suffering losses even after a long spell of time. The arrangement also makes farmers credit-worthy. A farmer would only need to take his warehouse receipt to a financial institution and walk out moments later with borrowed money in his pocket.
He would proceed to buy fertilizers, food, clothes and settle school fees for his children. When the objecting parliamentarians finally saw sense in the arrangement they called for storage of all sorts of grains - maize, sorghum and finger millet. Some thought sun-dried vegetables could be stored as well. Others said dried fish such as sardines could be stored for years without spoiling. Crop banks are now sprouting, albeit slowly, in Tanzania's 12,000 villages.
Crop banking is a brilliant idea that is likely to go a long way into alleviating poverty. The government and other establishments should readily support villagers' efforts in this direction. The president has called for concerted effort. He should be accorded support.