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9 September 2012 | Adam Leach
East African governments should maximise buying power through joint policies to govern agricultural input costs, a report has found.
Distribution, Access and Application of Agricultural Inputs, commissioned by the Agricultural Council of Tanzania, argued reducing the bureaucracy of countries buying commodities together would enable farmers and businesses to reduce costs. The report called for businesses within countries to collaborate, but also proposed a regional approach that covered a number of countries would provide greater benefits.
The report said: “EAC countries should seek regional integration and harmonization of policies on inputs and trade in order to reap from economies of size and scope. Integration of policies and regulations will reduce procedures and improve business environment.”
The report, which was conducted by Match Maker Associates, was commissioned in order to identify possible strategies for businesses and smallholders to buy agricultural inputs, such as fertilizer at cheaper rates. It explained that subsidy schemes had been used in the past to enable farmers to buy the goods but that corruption and bureaucratic bottlenecks had restricted its effectiveness.
The report also argues that removing the barriers for trade between the countries would also improve the environment on the supply side. By opening up the market, companies producing the inputs would be able to expand their operations and reduce their prices. Further, it suggests that increasing the size of the market would lessen volatility.