Tanzania has a promising policy and economic environment in which the RIU could operate. GDP per person in Tanzania is around US300/year, which is low relative to most neighbouring countries. But the economy has achieved a steady growth since 2000 (averaging almost 6% over the period to date) and the proportion of people living in poverty has fallen over the last decade. The World Bank estimates that Tanzania needs GDP growth of around 6% a year to meet the MDG target of halving poverty by 2015. The Tanzania government poverty strategy (MKUKUTA) has a more ambitious target of halving poverty by 2010 which requires average GDP growth of 8% a year. Poverty is a major national problem The Household Budget Survey shows inequality in Tanzania is low and stable, with a Gini coefficient1 of 0.35 in 2001 (similar to Uganda but much lower than Kenya). Agriculture remains the largest sector in the economy and hence its performance has a significant effect on output and corresponding income and poverty levels. The sector accounts for about half of GDP and exports, and its importance is amplified through backward and forward linkage effects. Sale of agricultural products accounts for about 70 percent of rural household incomes. National data show significant progress towards the objective of a sustained 5 percent growth rate with an increase of the five year moving average agricultural GDP growth rates from about 3.3 percent from 1991 to 2000 to 4.3 percent over the 1999-2003 period.