TransFarm Africa (TFA; now part of the New Markets Lab) was established in 2010 to respond to the urgent need to support inclusive investment in African agriculture. TFA was originally incubated at the William and Flora Hewlett Foundation as part of the Agricultural Markets component of the Global Development Program and was developed following several years of consultations with government officials, practitioners, agricultural businesses, and civil society representatives in Africa, the United States, and Europe. The initiative was designed to provide Africa’s small-scale farmers and entrepreneurs with the tools to rapidly transition away from subsistence farming toward market-oriented production systems and into new jobs created through transporting, storing, processing, and retailing an abundant array of foodstuffs to feed the growing demand within Africa and the world.
TransFarm Africa’s proof of concept, the case study of Mtanga Farms Limited in the southern highlands of Tanzania (owned by Tanzania Food Corporation), illustrates the innovative approach TFA pioneered to combining investment and policy to unlock market potential (see also Global Impact Investing Network Case Study, Improving Livelihoods, Removing Barriers). Mtanga Farms illustrates firsthand the importance of market-driven legal and policy change, and the lessons learned from this case are being scaled up through the New Markets Lab.
Development of the commercial potato market in Tanzania began with entrepreneurs who saw potatoes trucked in from South Africa while 150,000 smallholder farmers, many of them women, struggled to feed their families with low-yielding seed potato seed stock. Potatoes can be prone to pests and disease, particularly in the tropics, and before Mtanga Farms, locally available seed potato varieties generated yields of only one-tenth of global averages. The local entrepreneurs quickly realized that they would need to work through the legal and regulatory system on paper and partner with their government counterparts to establish a system that worked in practice. The challenge was getting new seed potato varieties to market quickly enough to preserve commercial viability of the investment while addressing any needs on the regulatory side to ensure high-quality new seed varieties, including compliance with sanitary and phytosanitary (SPS) standards. Although the farm and investment were located in Tanzania, the high-quality, high-yielding seed potato varieties had to be brought in from Kenya and approved for use in the Tanzanian market, making cross-border trade critical to the success of the investment.
Opening the market required a close public-private partnership and a strong technical team to work through one concrete regulatory step after another and address issues as they arose, which included securing the appropriate registrations, ensuring application of Tanzania’s SPS law in a commercially viable way, and implementing an agreement among East African countries to allow one country to rely on the field test data of another in approving new seed varieties. Today the enterprise is a thriving, inclusive, mixed-use commercial enterprise with a commercial greenhouse-based seed potato business that has generated critical jobs for women and plans to sell improved potato seed to producers throughout Tanzania. It is one of the successful companies along the Southern Agricultural Growth Corridor of Tanzania (SAGCOT) and a good signal to other investors. The Tanzanian government used the process to offer its officials deeper technical training, and the legal and regulatory lessons learned have been spread to other investments and regulators. Regional seed systems are being enhanced based on this model as well.