Tanzania sugar project leaves bitter taste for farmers caught up in land disputes

Medium_tanzania
An Agro EcoEnergy project in Tanzania. The company has plans for a sugarcane plantation and a processing facility on the north Tanzanian coast. (Photo: Ariel Zirulnic)
Guardian | 21 October 2015

Tanzania sugar project leaves bitter taste for farmers caught up in land disputes

Ariel Zirulnick

Per Carstedt, executive chairman of the Swedish company Agro EcoEnergy, has a vision for a shrubby tract of land on the north Tanzanian coast. Under his firm’s plan, farmers who once depended on subsistence work will earn wages on a sugarcane plantation or from selling sugarcane they grow to a planned processing facility.

The factory will process sugar for export as well as for ethanol. The fields will be crisscrossed with irrigation canals and treated with a mix of organic and synthetic fertiliser. Within a few years, Tanzania will be the biggest sugar producer in the East African Community, transforming its agriculture sector.

But as yet, this $500m (£324m) vision is still a dream. Land disputes, caused by a lack of clear regulation and information, have stymied Agro EcoEnergy’s plans. There has also been criticism from activists who do not believe large-scale farming is the answer to Africa’s food security challenges.

Agro EcoEnergy’s Tanzania project has been stalled for years because of a row over the relocation and compensation of farmers living on the earmarked land. Frustrated by repeated delays, one of the original key investors – the Swedish International Development Agency – dropped out this year.

Carstedt is adamant that large-scale farming projects are central to meeting Africa’s rising food needs. Citing UN projections that future population growth will be driven by African countries, he spoke of “a race against the clock”.

“What can a smallholder do if he doesn’t have access to infrastructure, access to market, access to training? Well, he does what he’s done for generations – produce the food he needs to survive,” Carstedt said, speaking in his office halfway between the project area of Bagamoyo and Dar es Salaam. “If you maintain that model, and you project that Tanzania gets to 100 to 150 million people, I just can’t see how it works.”

Carstedt believes that farmers employed on major projects such as the one Agro EcoEnergy is planning will use their wages to buy food but also to cover other expenses, like school fees. Tanzania’s burgeoning food needs will be met by a combination of local agriculture and by the growth in disposable income that will allow Tanzanians to buy imported products.

But his alluring vision has its detractors.

In 2012, the G8 industrialised nations launched the New Alliance for Food Security and Nutrition initiative to ramp up private investment in African agriculture by offering companies land and tax incentives. Tanzania, where about 80% of the population are subsistence farmers, was among the first six countries to sign up, and the southern agricultural growth corridor was given the task of implementing the strategy.

The corridor covers about one-third of the country and includes some of Tanzania’s most fertile farmland. Although Bagamoyo is not located in the corridor, Agro EcoEnergy has received support from the partnership.

But the New Alliance has been dubbed a new form of colonialism by critics, who argue it favours private investors over smallholder farmers. Although the newly adopted sustainable development goals enshrine public-private partnerships as part of the global strategy to end extreme poverty and hunger, address the impact of climate change and reduce inequality by 2030, some are worried by the central role given to the profit-driven private sector.

“The mega public-private partnerships and the new alliance in particular are pretty unproven, they’re risky, and they’re unlikely to deliver the type of investment required to support small-scale producers,” says Robin Willoughby, a policy adviser with Oxfam UK’s food and climate team and the author of a 2014 report on public-private partnerships in African agriculture.

Agro EcoEnergy’s main difficulty seems to lie in determining the ownership of the land it wants to use. In Tanzania, all land is owned by the state, with the president acting as trustee with the power to lease the land to others. However, land grabbing and corruption have been problems for many years, and have often caused conflict with pastoralists and indigenous groups across the country.

In 2006, Agro EcoEnergy signed a memorandum of understanding for 20,000 hectares (49,400 acres) on which a disused ranch stood. But according to ActionAid, which opposes the development, 1,300 people use this land.

“Although Agro EcoEnergy has conducted consultations with affected villagers, ActionAid found that many have not been offered the choice of whether to be relocated, and they have not been given crucial information about the impact of the project on their ability to make a living off the land and feed their families. By failing to obtain their free, prior and informed consent, EcoEnergy is grabbing the land from these women and men,” the charity has said. Carstedt contests these claims.

A land valuation, the first step toward compensation and resettlement, took place in 2010. EcoEnergy gave the Tanzanian government a 10% stake in the company, from which it is expected to cover the costs. But the farmers who make their living from the land say they have received no compensation and have no idea where they will be resettled.

Nawahi Nawahi, from Razaba village where the sugar plantation would be located, grew maize, rice and cassava on his plot of land, mostly to feed his own family. Now his family have moved away, fearing an imminent displacement, and he sends the little money he makes to them. “Our government doesn’t think about poor farmers,” he says.

Carstedt says he is frustrated by the delays. “If it doesn’t go by December, we’re done.”

The UN’s International Fund for Agricultural Development has committed $66m to fund Agro EcoEnergy’s outgrower scheme, under which farmers near the plantation will grow sugarcane to sell to the company to process. The African Development Bank has also said it will give $30m towards the scheme, but that money has not yet been approved by its board.

Tanzania’s national commissioner for lands, Moses Kusiluka, says the ministry is still looking for resettlement land for the farmers.

Few would dispute that private investment can ramp up agricultural production at a rate that small farmers, who make up the backbone of Tanzania’s agricultural sector, never could.

“From a purely economic point of view, there’s no question … Smallholders’ productivity is low. Exports from this country are low,” said Benedict Mongula, an associate professor at Dar es Salaam’s Institute for Development Studies, who co-authored a report on how large-scale agriculture investment affects small farmers.

Willoughby and Mongula believe the private sector should invest in processing facilities nationally, like Agro EcoEnergy’s proposed factory. Farmers also need help getting their crops to market, and private investment could play a critical role here.

But donors seem more focused on investment in large-scale agricultural projects, Willoughby says. “The response from donors is that it’s a risk worth taking. We would argue it’s a risk too far.”

Ariel Zirulnick travelled to Tanzania with Biovision, which promotes sustainable agriculture
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