This paper deals with the economic development of Tanzania and especially with the development of the smallholders. My aim is to study whether the Structural Adjustment Programmes have helped to facilitate growth in the agricultural and export-sector and if the reforms implemented through the programmes have made agricultural specialization easier and improved the economic situation for the smallholders.

In this paper, I will discuss that there might be significant limitations in the favours received due to SAP and that the Structural Adjustment Programmes because of this may not be the model for agricultural development as it is claimed by the initiators; the World Bank and the IMF. On the contrary, I present the idea that SAP can be said to have failed in its undertaking and that the reforms might not be suitable for the smallholder sector. I will in the paper argue that SAP has not facilitated an agricultural specialization and that this has much to do with the increase of production costs that the smallholders have been faced with after the reforms. And because of this it could be argued that the Structural Adjustment Programmes might not be an appropriate development strategy for Tanzania, if the country is to achieve growth through specialization. Consequently, there might be reason to believe that the reforms not are overall suitable for the Tanzanian development, considering that a growth within the agricultural smallholder sector is crucial for Tanzania to achieve a long term economic growth.