EAC states impose common external tariffs to protect paddy farmers

The East Africa Community (EAC) partner states have imposed Common External Tariff to help traders and farmers in the community to benefit from what they grow and protect rice smuggling that destroy small scale farmers engaged in paddy production in the region.
 
A report from Rice Council of Tanzania (RCT) issued by the Rice Council Executive Director, Winnie Bashagi say that the EAC has decided to imposed the common external tariffs after it identified that right now Tanzania and other EAC rice industry is under the threat of imported rice from Thailand and Pakistan.
 
She said across Tanzania, and the rice value chain, farmers, millers and traders are bitter about the high volumes of cheap Asian rice that somehow makes its way into the country and region duty free.
 
In a national market assessment in March and April, the Rice Council found Chapa Africa Thai rice and Kasuku Pakistan rice in every region visited.
“If you look at the wholesale price and what it should cost to import with the EAC rice tariff paid,” says Winnie Bashagi, “it is clear that the tariff was not paid. If the tariff had been paid, the importers would be losing on every kilogramme they sold,” she said.
 
Also in late 2014, the Ministry of Agriculture declared Tanzania to have produced a 700,000-tonne rice surplus.
 
This surplus was trapped in the country as, in June 2013, Rwanda, Burundi and Uganda imposed the Common External Tariff of the East African Community on all Tanzanians in reaction to some 80,000 tonnes of duty-free rice officially allowed into Tanzania in early 2013, according to the Council’s Position Paper. 
 
When the 2013 duty-free rice began entering the EAC partner states, often blended with Tanzania rice, the partner states imposed the EAC tariff on all Tanzania rice. The trapped surplus in Tanzania led to two years of wholesale prices too low for smallholders to breakeven on their production. Only since Uganda lifted the tariff on Tanzania has the wholesale rice price begun to improve. Rwanda has yet to lift the tariff.
 
In Morogoro Municipality and in Kahama, the council witnessed large lorries unloading Chapa Africa Thai rice and large quantities being blended with Tanzanian rice.
 
The blending of this smuggled rice with Tanzania rice for export to Uganda led Uganda to re-impose the EAC tariff on all Tanzania rice.
 
Cutting off the surplus from Uganda would depress the wholesale price again, further damaging the livelihoods of at least 500,000 smallholder rice farmers and the 2 million family members who depend on them.
 
On the other hand a trader from Kahama noted that the imported rice is killing my business,” said a trader in Kahama, whose business is selling Tanzania rice to Rwanda and Uganda, who wishes to remain anonymous for fear of physical harm.
 
“One big shot brought in three thousand tonnes for DR Congo. He paid duties on a bit to cover his tracks, but all of it he sold to local warehouses.  It never went to DR Congo.” The trader says it’s impossible for Tanzanians to compete with cheap Asian rice.
 
In Morogoro, local millers complain that imported Asian rice is selling in shops for less than they can pay farmers for unmilled paddy.
 
“Smuggled rice appears to enter Tanzania in two ways,” says Rice Council Chairman Julius Wambura. “Zanzibar does not enforce the 75 percent EAC tariff and imports enough rice to the extent that, the study by SERA 2013 quoted FAO food balance sheet of fifty kilogrammes of rice per person per day! This rice doesn’t stay on the island but comes by dhow to the pirate ports along the coast.”
 
The second way, according to the Council, appears to be tens of thousands of tonnes imported as transit goods to the DRC that are dumped in Tanzania.
 
“The only people making money in the rice industry right now are the traders who are smuggling rice,” says Wambura. “Everyone else has been losing money for two years. The large-scale smuggling threatens to ruin the industry. We are calling on the government to put a stop to the smuggling and to enforce the rule of law and the EAC treaty commitments.”
 
Through smallholder apex associations, the Rice Council of Tanzania represents some 500,000 of the smallholder rice farmers across the country who in total number are about a million. The Council also represents commercial farms, agri-input suppliers, traders, millers and packagers of Tanzania rice, and banks that lend to the industry.
 
“If the government wants to reach its Big Results Now and National Rice Development Strategy goals of doubling rice production for food security and regional export by 2018,” said Council Chairman Wambura, “The first step is to put an end, once and for all, to the large-scale organised rice smuggling. Otherwise, the rice industry will not go forward but backward.”
 
 
 
SOURCE: IPPMEDIA

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