The Agricultural Council of Tanzania (ACT) has expressed strong disappointment over this year’s budget saying it has ignored sensitive issues touching farmers’ welfare and which could hinder investments in the sector.
“The major issue here is the increase in a host of taxes which would ultimately increase the cost of producing crops, affecting farmers’ incomes and their ability to eliminate poverty,” the chairman of the council, Salim Shamte said in an interview.
Shamte pointed out that various taxes were raised quietly without consultations with stakeholders, cautioning that if the government does not show intent to listen to farmers’ woes it would difficult to bring about the green revolution the government is envisaging.
“The Government must consider farmers’ proposals which hinge on the reduction on unnecessarily exorbitant taxes to increase productivity and ultimately increase farmers’ incomes and reduce poverty levels,’ Shamte said. He mentioned an obnoxious tax hindering the development of agriculture as the crop levy which is paid to local government authorities.
“Local government authorities levy a hefty 5.0 per cent on agricultural crops while industries pay 0.3 per cent. Translated in real terms we are paying 17 times more than what manufacturing industries pay. This is incomprehensible, unexplainable and untenable,” he declared.
Research conducted by ACT on crop levy collection to determine to see whether the collections reach their destined coffers show that this was true for about 67 percent of the collections. It means that a third of the crop levy is used on the spot.
He said that the ACT had expected this issue to be addressed thoroughly in this year’s budget but to its disappointment it has been ignored. “If we are serious we must reduce this levy and be fair to all players,” he stated.
The ACT chairman also mentioned that land rent last year rose by 500 percent from Sh 200 to Sh. 1,000 per hectare for rural farms and Sh. 10,000 for urban-based farms. “This is not payable,” he said, giving an example of one ranch (Ruvu) which is now supposed to pay Sh. 107 million as land rent per year even before selling a young animal,” he said.
Shamte, who is also managing director of Katani Limited, based in Tanga, said that that the rent hike was of great concern to sisal farmers who would now be forced to pay four times the rent that the farmers have been paying to the government. Sisal farming occupies 174,556 hectares and is thus set to incur Tsh. 87,278,000 as land rent.
“The present rise means that the sisal sub-sector would now be forced to pay a total of Sh. 1.18 billion annually if the boundaries of urban areas would not change,” he pointed out.
Farmers have expressed concern over what they described as a sudden rise in the land rent last year and they expected this year’s budget speech to address the sensitive issue as it could frustrate farmers and result in a reduction of achievements made in the agricultural sector in general, he cautioned.
There is also the sudden rise in the fire levy which he said the sisal sector would not be able to benefit from. The fire levy is now set at Sh. 2 million from Sh 200,000 which farms with title deeds have been paying to the government, he said.
Shamte further mentioned the rise in Occupational Health Authority (OSHA) medical examination fees from Sh. 5,000 worker to Sh. 40,000 per worker per year which he said would press down on its operational costs.
“For the sisal sector, this is not payable because sisal estates use old labor intensive technology in production. So for the 350,000 workers working in the sisal sector, the sector would part with Sh. 14 billion per from Sh. 1.75 billion per year at Sh. 5,000 per worker which is a heavy burden for the sector,” he affirmed.
The ACT leader said that farmers were asking the government to consider them for non-payment of the fire levy because most farms are located very far from urban-based fire services making it difficult for fire services to reach and save them when there is the fire in their holdings.
While praising the budget for the announced commencement of the much sought Agricultural Bank, Shamte expressed further disappointment on the rise in diesel taxes saying this would increase operational costs. Diesel is used in the preparations of farms and not in transportation alone. “In some countries this kind of taxes is removed in agriculture to motivate farmers to increase production,’ he explained.
The ACT leader has meanwhile urged the government to ensure that taxes that have been reduced in spare parts are implemented to the letter, saying taxes which were reduced last year were still being levied on those spare parts.
Written by TIMES CORRESPONDENT, TANGA