Strengthening E-commerce in agriculture sector

Posted October 9, 2020

Agriculture is one of the most important sector in Tanzania and it has empowered many women economically

Agriculture is undoubtedly the largest and most important sector of the Tanzanian economy.  The country benefits from a diverse production base that includes livestock, staple food crops and a variety of cash crops. The sector’s contribution to GDP is 28.7% (2017), this has more than tripled in the last 10 years, supported by rising cash crop production, an emerging agro-processing segment and strong domestic demand for processed food. Source

The sector remains an economic mainstay and the largest source of employment, with the Ministry of Finance and Planning (MoFP) reporting in the FYDP 2016/17-2020/21 that 67% of the workforce is engaged in agriculture. Data from the National Bureau of Statistics (NBS) shows that 11.3m people participated in agricultural activities during the 2014/15 season. Roughly 60% of operators were involved in crop production, 38% in crop and livestock activities, and 2% were solely engaged in livestock production.

At the same time, farmers and other sector stakeholders face considerable challenges in modernising the industry to increase yields, exports and value-added processing. Slowing export revenues; land acquisition hurdles; and smallholder farmers struggling to access economically viable technology, adequate storage facilities, markets and credit have affected private investment.

These challenges need to be addressed through joint efforts from multiple actors. Towards the end of 2019, UNDP Tanzania accelerator lab has been trying to address the challenge of market access to small holder farmers. The key question for the Accelerator Lab was which digital technology can be applied to transform the sector?

As Head of Solutions Mapping for the Accelerator Lab, I mapped and analysed several solutions but to most of the solutions the challenge has been coverage, a majority of them are designed for farmers who can afford a smartphone and internet. Although mobile data prices are reasonably low, they remain unaffordable to segments of the rural population. This has resulted in a large gap in internet use between urban and rural areas. Also, fewer women than men access and use the Internet.

An online trading platform to connect the most remote and vulnerable farmers

In my search for solutions I came across one solution which I consider to be novel to a majority of farmers; the online trading platform for trading agricultural commodities engineered and managed by Tanzania Mercantile Exchange Market (TMX) which operates in accordance with the Commodity Exchanges Act 2015 and Commodity Exchanges Regulations, 2016.

Establishment of TMX is part of the government’s efforts to digitalize government services which is now advancing, and the Government is investing more resources to enhance the overall business environment. Despite this, Tanzania has yet to adopt a stand-alone e-commerce policy or strategy, and e-commerce is not mainstreamed into the national or sectoral trade development strategies

TMX online trading platform as it appears during green grams trading session. Photo by TMX

The TMX online trading platform has capacity to connect a majority of rural based smallholder farmers to regional and domestic markets without additional costs on mobile data as it connects to the warehouse system. Farmers, through farmers cooperatives send their produce to a nearby registered warehouse and from here information is sent to the online platform. All cereals can easily be traded through this platform and can help farmers to overcome exploitative systems such as selling crops before harvest, selling without using the right standardized weighing equipment, reducing transportation bottlenecks, improving the system of tax collection and tariffs that are set by laws and regulations yet the full functioning of the online platform experienced a lot of hiccups due to lack of trust on its performance by key decision makers.

The Accelerator Lab thought of financing a workshop to provide an  opportunity for key stakeholders involved to perform live testing of the online trading platform for them to understand how the system works and gain their confidence in using the platform, this was not done before by TMX.

How we used collective intelligence -data, people and technology to unlock the online platform?

The UNDP Tanzania Accelerator Lab convened a day and half workshop and invited participants who are key decision makers from the Ministry of Industry and Trade, Ministry of Agriculture, Ministry of Finance and planning, crop board Directors with Deputy Secretary of the Ministry of Finance and Planning as the chief guest.  During the workshop participants performed live testing of the online platform imitating buyers (testing the technology), evidence of competitive prices from piloting phase was shared (data) and discussions (people’s reactions) triggered decision to allow more crops to be traded online including cotton, sisal, Cashewnut and cereals. For a majority of participants this was their first-time exposure to interact with the online market platform and an opportunity to understand e-commerce. Seeing is believing!

Two months later following a stakeholders workshop the government gave public notice that more cereal crops will be traded via the TMX e-platform. This is how we have been able to amplify e-commerce in the agricultural sector which builds on other country office efforts and support in the Agriculture sector such as the design of Mobile-Kilimo under RARIS project funded by Melinda Gates Foundation which connects farmers to markets and extension services via USSD code. The big lesson for us is that bringing in new ways of addressing complex challenges is innovation in   itself and is what mostly needed to make an impact. The Accelerator lab will continue to work with TMX to integrate innovative ways or technologies to improve quality including blockchain for source tracking.

For more information about the UNDP accelerator programme visit:

By Ghati Horombe, Head of Solution Mapping, UNDP Accelerator Lab Tanzania