Agencies

Agricultural Inputs Trust Fund (AGITF)

The Agricultural Inputs Trust (AGITF) is a revolving fund which is under the Management of Board of Trustees. The fund was established by Act of Parliament No. 9 of 1994

GITF Vision, Mission and Objectives

The current operating Vision

  • Inputs are available to farmers at affordable price and acceptable quality
  • The current operating Mission Providing loans to inputs suppliers to ensure that input supply gap is reduced.

Objectives

  • In reviewing the performance of the AGITF, the following are found to be the key aims:
  • Support procurement and distribution of agricultural inputs through provision of loans to input distributors
  • With reference to the AGITF Act No.9 of 1994, the purpose is to make available loans, on such terms and conditions as the board may determine finances for the importation and distribution of agricultural inputs.
  • As per "Taarifa ya Uendeshaji na Hatimaya Mfuko wa Pembejeo", the purpose is to ensure that farmers get crop and livestock inputs in sufficient quantities, fair price and on time through provision of loans.

The above mentioned purposes show some variance regarding to defining the main target group of the loan facility. The first and second bullets indicate that the input distributors and importers are the target group while the last bullet goes beyond importation and distribution defining the target groups being the crop and livestock farmers.

In consideration of the agricultural strategic reforms and in harmonizing the stated vision, mission and key aims, the overall objective of AGITF is to establish a commercial production mindset among the smallholder farmers in order to produce profitably and economically so that the farmers become credit worthy under the commercial lending systems. Specific objectives include:

  • To operate an effective loan administration and recovery for agriculture and livestock production for small and medium scales of fanning.
  • To provide effective Management of AGITF, and
  • To establish necessary conditions for prudent financial management of SACCOs.

AGITF Roles

  • The AGITF was established with the following main roles:
  • To advise the Minister on the policy of the fund and oversee its implementation
  • To establish the National demand for the agricultural Inputs and determine the costs thereof,
  • To appraise the minister from time to time on the country's stocks position with respect of agricultural inputs and availability of funds for their acquisition;
  • To ensure the availability of funds to finance the procurement and distribution of agricultural inputs;
  • To monitor timely delivery, distribution and storage of agricultural inputs;
  • To maintain and apply the finances of the funds in accordance with sound financial principles;
  • To grant loans on sound principles and in particular with regards to ensuring timely recovery of the principle sum and any interest payable on any loan;
  • To cooperate with relevant institutions and authorities responsible for monitoring and enforcing standards or quality of products in order to ensure that agricultural inputs imported on loan from the funds are of acceptable standard or quality.

Contact Details

Telephone: 022-2700-191
Fax: 022-700-601
Postal Address: P.O. Box 32081
Dar es salaam, Tanzania.

Background Information

Until 1990/91 there had been much dependence on donations and grants from external donors as far as acquisition of inputs was concerned. Also banks such as CRDB played a major role in sustaining agricultural production by providing credit through Cooperatives.

These banks received money through special agricultural production and crop purchase funds from the Bank of Tanzania for lending to unions for procurement of inputs.

However, this financing arrangement face dome problems but more important was poor loan repayment by Cooperatives. The CRDB for example between 1985/86 and 1989/90 recorded an average recovery of 29%.

Despite the fact that the Cooperative Unions were not repaying the loans, the banks had to repay back the loans to BOT regardless of whether the loan was recovered or not. This was a loss to the banks and the banks had to reduce the loans to the unions, which reduced the supply of inputs to the farmers. Furthermore, in 1991 the banking and financing institutions Acts called for prudential lending involving hard securities and credit worthiness of the borrowers.  This condition could not be met by most of Cooperative Unions, hence shortages of inputs were continuously worsening and worse still the private sector could not fill the gap as most of the private importers and distributors of inputs were facing liquidity problem.

This widening inputs supply gap called for the Government intervention. The Government had to look for an alternative way of financing in order to ensure sustainable supplies of inputs to the farmers and therefore AGITF was established in 1994. Since then AGITF has undergone transformation and streamline its activities of providing soft loans to sockists, farmers and other beneficiaries in its efforts to enhance recovery of issued loans so that the Fund revolves and sustain itself. In the end more beneficiaries will be able to access the facility.

One of the major national strategic moves towards poverty reduction was to privatise the productive sector for the intension of improving production efficiency. However, together with the good intension of improving the efficiency of the productive sector, privatizations had shown some negative effects especially on supplies of inputs as most of the necessary production inputs and other supplies are increasingly becoming inadequately available. The fact that the farmers are not credit worthy, challenges the privatization move as under any commercial setting, profitability/viability of farming/enterprises will always dictate the welfare of any money lending business. Therefore the AGITF management had to take this as an important caution to its prosperity.

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