Africa Region Working Paper Series No. 69

Tanzania’s Tea Sector
Constraints and Challenges

Abstract

Tanzanian tea is grown under two sys-tems: by smallholders, on plots averag-ing less than a hectare, and on large estates, which often exceed 1,000 hectares. In the mid-1960s the government introduced steps to encourage smallholder production, and by 1985 smallholders accounted for almost 30 percent of total tea output. By the late 1980s, however, serious problems were visible in the smallholder sector and by 1995, as the sector's share fell below 10 per-cent, it was clear that only broad-based pol-icy reforms could bring the sector back from the brink.

The government attempted to revive the sector in the early 1980s by privatizing and rehabilitating two tea estates, which had been nationalized in the 1970s; restructuring the Tea Board; privatizing the six state tea factories; and revamping public research on tea. These policy initiatives have had some success, but much remains to be done to fully revitalize the tea sector. Infrastructure is still inadequate. The tax structure is too complex, with too many taxes and rates that are too high. Despite the restructuring, the Tea Board and the Ministry of Agriculture are still too powerful. And trade policy needs to be revised to allow imports of made tea.

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