Tanzanian alcohol makers turn to local sources of raw materials to boost industry

TANZANIA – Leading breweries in Tanzania i.e., Tanzania Breweries Limited (TBL) and Serengeti Breweries Limited (SBL) to prioritize sourcing their wheat locally, following an agreement with the government.

According to reports by Daily News, the state has reached a consensus with the brewers to purchase the raw material at a minimum price of Tsh 800 per kilogramme of wheat.

This follows the country importing 800,000 and 1 million tons of wheat annually amid availability of arable land and conducive climate to facilitate mass production of the cash crop.

“TBL and SBL agreed to sign a contract with the ministry to buy all the wheat produced by local farmers. We will adopt special legislation to ensure such contracts are valid and respected,” said Minister of Agriculture, Prof Adolf Mkenda.

In a bid to ensure ample supply, Prof Adolf Mkenda has ordered investors holding state wheat farms to resume farming in large scale or forfeit the plantations.

Also, Deputy Minister for Agriculture, Hussein Bashe has revealed that the ministry is planning to spend at least Tsh. 155 billion (US$66m) in research and development to improve crop production. This is in addition to Tsh. 4 billion (US$1.7m) required to procure and supply improved wheat seeds among smallholder farmers.

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He said the Agricultural Seeds Agency (ASA) and Tanzania Agriculture Research Institute (TARI) is working to improve the system, which includes availability of quality inputs. He went on to explain that a new system is being implemented which will help farmers access financial support at an agreed interest rate of 2 per cent.

“TBL and SBL agreed to sign a contract with the ministry to buy all the wheat produced by local farmers. We will adopt special legislation to ensure such contracts are valid and respected.”

Minister of Agriculture, Prof Adolf Mkenda

Meanwhile, the subsidiary of AB InBev has partnered with the World Food Programme (WFP) to support over 4,000 farmers during the 2021 sorghum season.

The 2021 project which is an extension to last year’s pilot program, targets to produce 10,000 tonnes of sorghum per acre and TBL will buy it at Tsh. 550 per kilogramme.

The launch of the second phase follows the successful out-come in 2020 which attained a 70% rise in yield compared to the previous years.

In the latest season, farmers will be pre-financed by NMB Bank and insured by Jubilee Insurance and will be credited high yielding seeds, fertiliser and other farm inputs which will be repaid at the end of the harvest season.

The company has rolled out BanQu Block chain technology to add transparency and traceability to its supply chain. The technology will enable farmers to have an immutable digital record of their financial transactions, namely production, sales, purchases (inputs), repayments and will also enable farmers to be paid via mobile money.

TBL Plc currently sources 74 per cent of its raw materials locally and is committed to increasing its local sourcing over the coming years. The company sources sorghum for the production of its fast-growing affordable brands – Eagle and Bia Bingwa.

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