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‘Win-Win’ Investment in Tanzania?

July 1, 2015
New Internationalist

Over the last decade, as many African countries surf on high levels of growth, the continent has become an increasingly attractive place for private investment. This is especially true in agriculture, as transnational agribusiness giants like Monsanto flock to the continent to take advantage of the growing opportunity for profits. These businesses have sold a story of a ‘win-win’ scenario for farmers – telling the world’s governments that through industrial agriculture farmers can increase their yields and feed hungry people in their countries.

As land grabs have set off an international uproar, corporations have looked to invest in subtler ways of advancing their control over agricultural markets. By participating in big schemes like the New Alliance for Food Security and Nutrition, corporations are attempting to bring small-scale farmers into their global supply chains. They offer farmers access to international markets, promising credit, training, and investment in infrastructure.

Of the 6 key areas outlined for investment in Tanzania, the Kilombero region has received global attention. Known as the food basket of Tanzania, the lush valley of Kilombero has provided the area’s small-scale farmers with fertile agricultural land that they have used for generations to produce food. Despite having a climate that already makes food easier to grow, Kilombero was earmarked for investment instead of the drier areas in the north of the country. KPL farm, a private subsidiary of the British-based Agrica, invests to boost rice yields in this area and has received worldwide praise for its sustainable and responsible model of local development. KPL was outlined in the BBC as the flagship project of the G7’s New Alliance. It was meant to prove that investment can produce higher yields and do so in a way that benefits farmers. When UK development minister Justine Greening announced nearly $10.5 million of UK aid money for the project in 2013 she decreed: ‘I want this innovative, self-sustaining, job-creating investment to be a major part of how DFID [the Department for International Development] works in the future.’

However, a new report published jointly by the Oakland InstituteGreenpeace Africa and Global Justice Now uncovers some serious negative consequences behind this so-called benevolent enterprise in Kilombero. It also raises important questions regarding the role of large-scale private investors in agricultural development.

In a resettlement process that was widely commended by the likes of the Gates Foundation, 230 farmers were displaced from their land, many with blatantly insufficient compensation. Some were given just $17 per acre, which is less than the amount it now costs to rent an acre in the village for a year. As a comparison, an acre of land in neighbouring Zambia can be bought for $600. One villager said: ‘When they came here, they told me that if I provided land for KPL they would build me a new house… But they did not do that; they just threw us out of there and gave us a little money in order to survive.’

The project the company is most proud of is the work it did connecting the nucleus farm with thousands of local famers in the area. This was done by signing them into contracts which provided them with credit and training in return for the rice that they sell back to KPL farm. These ‘outgrower’ schemes have become a popular form of foreign investment, allowing transnationals to have control over what is grown, how it is grown and what the price is, whilst giving the impression of inclusion. The report shows that under this scheme locals have lost control over the means of their production, transforming them from farmers to labourers on their own land. Farmers have also become burdened with debt and are struggling with the high expenditure from the chemical inputs that they are required to buy as part of their contract. One farmer explained: ‘Through the contract, we were forced to accept technologies that we don’t really need to get a good harvest. All decisions about farming were made by KPL… Because I was in debt I had to do it the way they demanded.’

The report also highlights a crowd of environmental problems. It notes that the industrial model of agriculture brought to the valley holds a significant threat to the natural habitat and biodiversity as well as the health and livelihoods of local people. Plans to redirect up to 34% of the local river to service the rice irrigation system have come under criticism. Pesticides and herbicides, including Monsanto’s Roundup Ready, have washed over to other farms and caused so much crop damage that in 2010 six hundred farmers collectively wrote to KPL to complain. In an interview, a local maize farmer explained:, ‘The chemicals from KPL drifted into my farm and destroyed my maize. That season I was not able to harvest anything because the whole farm was destroyed… our household economy was negatively affected and it also led to a shortage of food in the household that year.’

The pro-corporate model epitomized by the Agrica investment has won over politicians, researchers and policymakers alike. The UK government, convinced by what seems to be responsible investment on paper, continues to channel hundreds of millions of our aid money to subsidize the enterprise of transnational corporations. But the evidence coming out of places like Kilombero shows that the model of industrial agriculture is not working in the interests of the small-scale farmers that it is meant to help.

However, it is not the only model for agricultural development. There are more effective ways that focus on meeting the needs of the smallholder farmers and assisting them to develop appropriate farming practices. Agroecological methods, that give farmers power over their land, seeds and soil, would boost yields and improve food security, while preventing the debt cycle that comes with the regime of intensive chemical inputs.

Not too far away from Kilombero lies a clear alternative to the corporate approach. In Morogoro, Sustainable Agriculture Tanzania trains local farmers in innovative agroecological techniques which allow them to produce food for themselves and their communities without the need of expensive agrichemicals. Farmers not only learn new skills but empower themselves, giving them the self-reliance to become strong actors in their own food system. Agroecology is not a commercial enterprise that promises profits for transnational corporations, and so is relatively low on the agenda of the business forums where much of the policy is created. But if aid agencies are genuinely interested in bringing people out of poverty, they need to start listening to these alternatives.