Iowan Rastetter leads Tanzanian ag project
Published: 14 Jun 2011
Posted in:  Pharos | Tanzania | UAE | US
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Des Moines Register | 14 June 2011

Written by PHILIP BRASHER

Washington, D.C. - Iowa agribusiness investor Bruce Rastetter is leading a project to turn as much as 800,000 acres of land in the east African country of Tanzania into a massive grain-and-livestock operation.

Development experts warn that Rastetter's project must avoid squeezing the region's small-scale farmers. One critic slammed the project as a land grab that will create a "plantation-style" system.

But Rastetter says the project will show how the use of high-quality seeds, machinery and chemicals common to U.S. agriculture can dramatically increase food production in Africa and improve the livelihoods of local, poor farmers.

Experienced farmers, possibly from South Africa, will be brought in to manage the operation. Small-scale farmers will use some of the acreage and be taught better farming techniques through an outreach project being designed by Iowa State University.

"Our goal is to work to bring modern sustainable agriculture to that part of Tanzania in cooperation with the government and the local people," Rastetter said.

At its full size, the project would encompass about 1,250 square miles, an area larger than Polk and Dallas counties combined.

The government of Tanzania would provide the land to Rastetter's group, known as AgriSol, under 99-year leases. An official with the Tanzanian embassy in Washington, D.C., said the government supports the project and planned to approve the deal next month. The prime minister of Tanzania, Mizengo Pinda, visited Iowa State and Rastetter's Alden-based farming operation, Summit Farms, last fall.

Much of the region is grassland now but has sufficient rainfall and adequately fertile soil to be productive agriculturally, experts say. Farmers there currently harvest less than 20 bushels of corn per acre, about one-tenth of what farmers in Iowa routinely produce and far less than the region is capable of, Rastetter said.

The project's crops would be sold in Tanzania and to neighboring countries.

Anuradha Mittal, author of a recent study that looked into Rastetter's plan and similar projects being funded by university endowments and private investors, dismissed the small-farmer project that Iowa State is designing as a "greenwashing scheme," or public relations gimmick.

The project's stated philanthropic goals are incompatible with its need to turn a profit, she said. "The two things don't go together," said Mittal, executive director of the Oakland Institute, a research and advocacy group.

ISU experts are designing the project based on their experience working with smallholder farmers in Uganda, said David Acker, associate dean of academic and global programs in the agriculture college.

Acker, who worked in Tanzania early in his career, said ISU is working closely with a Tanzanian agricultural university. Yet to be done is a detailed survey of the local population to find out how best to assist them, he said.

He said the smallholder project can work alongside a large-scale private agricultural operation.

"If the two were incompatible, I personally would not be involved in this project," he said.

Rastetter's project comes as the United States and other governments are wrestling with ways to ramp up food production in Africa while lifting the incomes of the region's desperately poor farmers. The U.S. Agency for International Development has been trying to attract private sector involvement in some agricultural development projects, although the agency says it is not involved in Rastetter's plan.

The government of Tanzania has been especially aggressive in trying to attract outside investors and foreign aid to build its agricultural sector.

Countries such as South Korea, Saudi Arabia and the United Arab Emirates that are looking for new places to produce food for their own populations have been acquiring vast acreages in Ethiopia, Kenya, Sudan and other parts of Africa. China has invested in land for biofuel crop production.

Rastetter said his plan "is the farthest thing from a land grab that could exist. It is so much different than the model that over time has taken advantage of Africa," he said.

Besides his own farming operation, Rastetter has founded companies that produce ethanol and hogs. He is a prominent Republican Party donor, having contributed $160,000 to the 2010 campaign of Gov. Terry Branstad, who appointed him this year to the Iowa Board of Regents, which oversees ISU.

The Tanzania project is still in the early stages of raising money. AgriSol, of which Rastetter is a partner, has invested $2 million in preliminary work on the project.

The private investors want the Tanzanian government to approve the use of genetically engineered seeds, but the project isn't dependent on their use, Rastetter said. Most of the corn grown in the United States is engineered to be toxic to insect pests and often is immune to a herbicide, too.

Key details of the project have yet to be worked out, including how much of the land would be available to local farmers, known as outgrowers, he said.

A 45-page presentation developed by the Pharos Global Agriculture Fund, part of a Dubai-based hedge fund that has been a partner in the project, said it would involve three sites ranging from 62,000 acres to 544,000 acres. The first crops could be seeded as early as this year, and plantings would ramp up over the coming decade. Besides corn, sorghum, soybeans and sugarcane also could be grown, and AgriSol also plans to produce cattle, poultry and ethanol.

Refugees from neighboring Burundi still occupy some of the land, having first come there in early 1970s, but Tanzania has been working for years to resettle them. Some refugees are still living on part of the land the project will use, but it will be years before that acreage is needed, Rastetter said.

Private companies could play an important role in helping poor countries improve their food production, but the projects must be carefully designed to incorporate the local farmers, said Charlotte Hebebrand, author of a study on the issue for the Chicago Council on Global Affairs. Small-scale farmers benefit from being able to buy lower- priced seeds and fertilizer from the private operation and have a new market for their crops, she said.

Pedro Sanchez, a soil scientist who was awarded the World Food Prize in 2002 for his work in east Africa, said the biggest challenge for AgriSol will be getting its crops to market because of the lack of roads and rail service in much of the remote region.

He said there also is a risk that small-scale farmers who buy seed and fertilizer from AgriSol will wind up in debt to the company.

Rastetter said the project will be developed as transportation becomes available and that AgriSol would work to avoid getting local farmers indebted to it.