Tanzania Daily News | 10 April 2012
BY DEODATUS MFUGALE
THE craze in recent years for huge investments in bio energy and agribusiness in Tanzania has seen small poor farmers being dispossessed of their only earthly belonging - land - through tricky contracts and the false hope of making riches overnight, both of which have seen these farmers being short-changed and having nothing to their name.
Rising prices of fossil fuel has pushed multinational companies to invest heavily in biofuel farming in Tanzania with the major focus being on jatropha. With the target of feeding a ready market in Europe and promises of improved socio-economic conditions of local communities, these companies have managed to acquire, legally and illegally, large tracts of arable land in many parts of the country that, however, have not been put to full use as per project proposals and have in some cases strained the availability of food and water for local communities.
By 2008, for example, there were 37 companies countrywide that had acquired land for agribusiness but none had cultivated all the land they had acquired. In 2006 Sun Biofuel had acquired 8,200 hectares of land in Kisarawe District but by August 2011 it had only developed 2,000 hectares and in fact the project has stalled. The land still belongs to the company. While sometimes the companies acquire land through established channels meeting requirements by the central government, the district council and other relevant authorities, small farmers are tricked into selling their land with promises of hefty compensations to individuals, the provision of clean and safe water to communities and improvement of health, transport and education services.
There are also promises of abundant employment opportunities, usually in thousands. However, most of the promises are not met and this leaves individuals and communities in general poorer than they would otherwise have been without selling their land to the investor. Frustration also abounds among community members because an endless process to get redress begins and besides the fact that the process never ends favourably, the relevant authorities who should have helped these communities get their rights abandon them. At the end of the day a sour relationship between the community, the investor and government is created.
"Rising agribusiness investments in Tanzania are fuelled by the need for national energy security in the face of rising prices of petroleum products. There are also opportunities for socio-economic development of the rural poor Tanzanians and the good investment environment created by the government attracts even more investors in the field, but at the end of the day we see many Tanzanians being dispossessed of their land either legally or illegally," explained Nyembea Stanslaus, during the Tanzania Bio energy Forum workshop held recently in Morogoro.
Presenting a paper on" Land Acquisitions for Agribusiness in Tanzania: Prospects and Challenges" Nyembea also said that the business has also led to displacement of small scale producers citing the example of Kisarawe District in Coast Region where about 10,000 people had to abandon their land to give way for a jatropha farm. But the impacts of agribusiness investments go beyond those which directly affect human beings. There is also loss of rich biodiversity which eventually of course takes its toll on the daily lives of communities.
"A UK company acquired over 50,000 hectares of land in Kilwa for planting jatropha. However, it cleared about 30,000 hectares of natural forest and exported timber and logs in the guise of preparing farms for jatropha. When the forest was gone, the company halted its activities," Nyembea told participants, adding that many agribusiness deals leave rural communities extremely poor due to becoming landless and lacking sustainable means of livelihoods. According to Nyembea who is a lawyer with Lawyers Environmental Action Team (LEAT), frustration among communities does not only come from unfulfilled promises and compensation that are peanuts but also from collapsing businesses.
"Sometimes one wonders if these investors have any feasible business plans and if any authority cares to scrutinize such plans. Experience shows that many of these companies would operate for hardly one year and run into financial or management problems. For example, Bioshape company and Sun Biofuels have abandoned their farms in Kilwa and Kisarawe respectively for various foreseeable reasons, with Sun Biofuels producing only 15,000 lts of jatropha oil and Bioshape merely decimating a huge natural forest," he noted, adding that authorities should scrutinize the credentials of such investors before they are given large chunks of land.
During the workshop it also came to light that some companies have failed to run agribusiness undertakings due to lack of experience with investments in Tanzanian being their first ventures. They also don't have enough data on, among other things, hydrological patterns and soil composition, prevalence of pests and plant diseases and variability of weather conditions. In another presentation, a journalist with The Guardian newspaper in Dar es Salaam, Gerald Kitabu, told participants the whole process of agribusiness investments sidelines communities who should be the main beneficiaries of such investments.
He was presenting findings of investigation conducted in Kisarawe where, for example, while villagers argued that the investor had promised to provide 5,000 employment opportunities, he provided only 750 and these lasted for only a short time. The investor argued that there was nowhere he had committed himself in writing that he would provide a given number of investment opportunities. Even when Sun Biofuels handed over operations to another company, Thirty Degrees East, the villagers did not know that the former investor had relinquished ownership of the property altogether, believing that he was still a majority shareholder "while the fact was that TDE owns 90 per cent of the shares and two local shareholders own the remaining ten per cent of the investment."
"Another thing we note here is that small farmers and producers in the rural communities are being shoved off from fertile land by these investors. Apparently these are also areas with adequate supply of water, a situation which compromises the food security of the communities," he explained. Under the circumstances there are views that agribusiness investors should be given a small area, just about 100 hectares and the surrounding communities should be encouraged to become outgrowers or contract farmers so as to realise maximum benefit from the foreign investment.
This has worked in Kilombero Sugar Company where outgrowers now own more hectares of land than the investor and have a ready market for their products. It is also important for the government to ensure that land is not leased to foreigners for a period of 99 years as very often large tracts of land are left idle but cannot be handed over to communities because of such title deeds. "A reasonable lease would be between 20 and 30 years. This would mean that land ownership would rivet back to the original owners within one generation," explained Godfrey Massay from HakiArdhi.
"But we should also encourage the rural people not to sell release their land for compensation; instead they should lease it to the investor on shareholder basis. This way they are guaranteed of continued benefits that if they get compensation money which they spend within months and remain poor for ever," he added. The bottom in line in agribusiness investments should be to promote the welfare of the small farmer and not protect foreign investors so that they marginalises the communities.
If such investments cannot reduce poverty among rural communities and do not help the country realise sustainable development, then no land should be allocated to such investors. But there is more to agribusiness investments that already discussed here. Why should these investments in many cases result into problems between investors and local communities? One problem is that agribusiness contracts are drawn in secrecy, their essential terms being known by the government and the investor and may be a few people who matter.
The major party in the contract, communities rarely know the terms of the contracts. This is one cause of the problems. In his paper titled "Land grabs or development opportunity?" published recently, Larenzo Cotula of the International Institute for Environment and Development (IIED) explains that over the past few years, companies and foreign governments have been leasing large areas of land in some of Africa's poorest countries. In Tanzania, for example, five per cent of agricultural land has been leased to agribusiness investors while Uganda has leased 14.6 per cent and DR Congo has leased 48.8 per cent.
This situation, he says, has raised concerns that poor villagers will be forced off their land agribusiness will marginalise family farming. He argues that there cases where agribusiness has boosted agriculture which has been neglected by many African countries over the years," But not all investment is good - and growing evidence strongly indicates that large land deals are not the way to go."
According to Coluta, even in the cases where investments are profitable, it is often difficult to see how they contribute to poverty reduction as the jobs created are few, short-lived and low paid and public revenues are limited by tax exemptions. "Some of the world's poorest people are losing land, water and natural resources that have supported their livelihoods for generations," he explains, citing a case in Uganda where 20,000 people claim to have been evicted from their land and a legal case is pending before the courts.
The researcher, however, notes that the otherwise best intentions of large land deals are shrouded in secrecy thus raising conflicts between governments, foreign investors and local communities. "For land deals to be good, much depends on local context, the investor's track record, the terms of the lease and whether these reflect the free, prior and informed consent of local land holders. Many land deals are being negotiated without transparency and local consultation," he notes.
Moreover, in many parts of Africa, local farmers, herders and gatherers only have insecure legal rights to the land they see as theirs." Most of them have no written documents for their land. Much land is owned by the state, which can allocate it to outside investors even against local opposition," he says.
BY DEODATUS MFUGALE
THE craze in recent years for huge investments in bio energy and agribusiness in Tanzania has seen small poor farmers being dispossessed of their only earthly belonging - land - through tricky contracts and the false hope of making riches overnight, both of which have seen these farmers being short-changed and having nothing to their name.
Rising prices of fossil fuel has pushed multinational companies to invest heavily in biofuel farming in Tanzania with the major focus being on jatropha. With the target of feeding a ready market in Europe and promises of improved socio-economic conditions of local communities, these companies have managed to acquire, legally and illegally, large tracts of arable land in many parts of the country that, however, have not been put to full use as per project proposals and have in some cases strained the availability of food and water for local communities.
By 2008, for example, there were 37 companies countrywide that had acquired land for agribusiness but none had cultivated all the land they had acquired. In 2006 Sun Biofuel had acquired 8,200 hectares of land in Kisarawe District but by August 2011 it had only developed 2,000 hectares and in fact the project has stalled. The land still belongs to the company. While sometimes the companies acquire land through established channels meeting requirements by the central government, the district council and other relevant authorities, small farmers are tricked into selling their land with promises of hefty compensations to individuals, the provision of clean and safe water to communities and improvement of health, transport and education services.
There are also promises of abundant employment opportunities, usually in thousands. However, most of the promises are not met and this leaves individuals and communities in general poorer than they would otherwise have been without selling their land to the investor. Frustration also abounds among community members because an endless process to get redress begins and besides the fact that the process never ends favourably, the relevant authorities who should have helped these communities get their rights abandon them. At the end of the day a sour relationship between the community, the investor and government is created.
"Rising agribusiness investments in Tanzania are fuelled by the need for national energy security in the face of rising prices of petroleum products. There are also opportunities for socio-economic development of the rural poor Tanzanians and the good investment environment created by the government attracts even more investors in the field, but at the end of the day we see many Tanzanians being dispossessed of their land either legally or illegally," explained Nyembea Stanslaus, during the Tanzania Bio energy Forum workshop held recently in Morogoro.
Presenting a paper on" Land Acquisitions for Agribusiness in Tanzania: Prospects and Challenges" Nyembea also said that the business has also led to displacement of small scale producers citing the example of Kisarawe District in Coast Region where about 10,000 people had to abandon their land to give way for a jatropha farm. But the impacts of agribusiness investments go beyond those which directly affect human beings. There is also loss of rich biodiversity which eventually of course takes its toll on the daily lives of communities.
"A UK company acquired over 50,000 hectares of land in Kilwa for planting jatropha. However, it cleared about 30,000 hectares of natural forest and exported timber and logs in the guise of preparing farms for jatropha. When the forest was gone, the company halted its activities," Nyembea told participants, adding that many agribusiness deals leave rural communities extremely poor due to becoming landless and lacking sustainable means of livelihoods. According to Nyembea who is a lawyer with Lawyers Environmental Action Team (LEAT), frustration among communities does not only come from unfulfilled promises and compensation that are peanuts but also from collapsing businesses.
"Sometimes one wonders if these investors have any feasible business plans and if any authority cares to scrutinize such plans. Experience shows that many of these companies would operate for hardly one year and run into financial or management problems. For example, Bioshape company and Sun Biofuels have abandoned their farms in Kilwa and Kisarawe respectively for various foreseeable reasons, with Sun Biofuels producing only 15,000 lts of jatropha oil and Bioshape merely decimating a huge natural forest," he noted, adding that authorities should scrutinize the credentials of such investors before they are given large chunks of land.
During the workshop it also came to light that some companies have failed to run agribusiness undertakings due to lack of experience with investments in Tanzanian being their first ventures. They also don't have enough data on, among other things, hydrological patterns and soil composition, prevalence of pests and plant diseases and variability of weather conditions. In another presentation, a journalist with The Guardian newspaper in Dar es Salaam, Gerald Kitabu, told participants the whole process of agribusiness investments sidelines communities who should be the main beneficiaries of such investments.
He was presenting findings of investigation conducted in Kisarawe where, for example, while villagers argued that the investor had promised to provide 5,000 employment opportunities, he provided only 750 and these lasted for only a short time. The investor argued that there was nowhere he had committed himself in writing that he would provide a given number of investment opportunities. Even when Sun Biofuels handed over operations to another company, Thirty Degrees East, the villagers did not know that the former investor had relinquished ownership of the property altogether, believing that he was still a majority shareholder "while the fact was that TDE owns 90 per cent of the shares and two local shareholders own the remaining ten per cent of the investment."
"Another thing we note here is that small farmers and producers in the rural communities are being shoved off from fertile land by these investors. Apparently these are also areas with adequate supply of water, a situation which compromises the food security of the communities," he explained. Under the circumstances there are views that agribusiness investors should be given a small area, just about 100 hectares and the surrounding communities should be encouraged to become outgrowers or contract farmers so as to realise maximum benefit from the foreign investment.
This has worked in Kilombero Sugar Company where outgrowers now own more hectares of land than the investor and have a ready market for their products. It is also important for the government to ensure that land is not leased to foreigners for a period of 99 years as very often large tracts of land are left idle but cannot be handed over to communities because of such title deeds. "A reasonable lease would be between 20 and 30 years. This would mean that land ownership would rivet back to the original owners within one generation," explained Godfrey Massay from HakiArdhi.
"But we should also encourage the rural people not to sell release their land for compensation; instead they should lease it to the investor on shareholder basis. This way they are guaranteed of continued benefits that if they get compensation money which they spend within months and remain poor for ever," he added. The bottom in line in agribusiness investments should be to promote the welfare of the small farmer and not protect foreign investors so that they marginalises the communities.
If such investments cannot reduce poverty among rural communities and do not help the country realise sustainable development, then no land should be allocated to such investors. But there is more to agribusiness investments that already discussed here. Why should these investments in many cases result into problems between investors and local communities? One problem is that agribusiness contracts are drawn in secrecy, their essential terms being known by the government and the investor and may be a few people who matter.
The major party in the contract, communities rarely know the terms of the contracts. This is one cause of the problems. In his paper titled "Land grabs or development opportunity?" published recently, Larenzo Cotula of the International Institute for Environment and Development (IIED) explains that over the past few years, companies and foreign governments have been leasing large areas of land in some of Africa's poorest countries. In Tanzania, for example, five per cent of agricultural land has been leased to agribusiness investors while Uganda has leased 14.6 per cent and DR Congo has leased 48.8 per cent.
This situation, he says, has raised concerns that poor villagers will be forced off their land agribusiness will marginalise family farming. He argues that there cases where agribusiness has boosted agriculture which has been neglected by many African countries over the years," But not all investment is good - and growing evidence strongly indicates that large land deals are not the way to go."
According to Coluta, even in the cases where investments are profitable, it is often difficult to see how they contribute to poverty reduction as the jobs created are few, short-lived and low paid and public revenues are limited by tax exemptions. "Some of the world's poorest people are losing land, water and natural resources that have supported their livelihoods for generations," he explains, citing a case in Uganda where 20,000 people claim to have been evicted from their land and a legal case is pending before the courts.
The researcher, however, notes that the otherwise best intentions of large land deals are shrouded in secrecy thus raising conflicts between governments, foreign investors and local communities. "For land deals to be good, much depends on local context, the investor's track record, the terms of the lease and whether these reflect the free, prior and informed consent of local land holders. Many land deals are being negotiated without transparency and local consultation," he notes.
Moreover, in many parts of Africa, local farmers, herders and gatherers only have insecure legal rights to the land they see as theirs." Most of them have no written documents for their land. Much land is owned by the state, which can allocate it to outside investors even against local opposition," he says.
