Banana Republic, Africa-Style

Originally published by The Daily Iowan

By Kirsten Jacobsen | June 23, 2011

When considering profitable or worthwhile international business ventures, it’s always important to hedge your bets.

So why not buy up 800,000 acres of “abandoned refugee camps” in western Tanzania and start a large-scale agricultural conglomerate?

It would appear that Iowa’s own agribusiness/ethanol investment mogul (and Board of Regents member) Bruce Rastetter and AgriSol Energy are on to something here. So, apparently, is Tanzanian President Jakaya Kikwete, who announced Tuesday that the way forward for the country is through upgrading its agriculture, roughly 80 percent of which is still done traditionally without machines or modified seeds.

Good thing the Americans are there to help. Rastetter, CEO of Hawkeye Energy and a managing director of AgriSol, plans to take common U.S. agricultural practices — modified seeds, high-tech machinery, chemicals, and pesticides — to the up-and-coming “breadbasket of Africa.” Local farmers will learn large-scale farming techniques under the tutelage of “experienced farmers,” according to AgriSol’s website.

And while increased food production in the fast-developing state is essential for its growing population, something about this undertaking smacks of good old-fashioned “banana republics.”

While the Tanzanian people will certainly see benefits, they are scant in comparison to the benefits Rastetter, AgriSol, and even the Tanzanian government will receive.

“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 told the Des Moines Register earlier this month. He failed to mention that government cooperation is essential, because foreigners cannot legally own titles to Tanzanian land. Because of government cooperation, they will sign 99-year land title contracts through the recently created AgriSol Energy Tanzania.

According to an analysis by the Oakland Institute, a policy think tank in California, AgriSol touts the project as beneficial to local farmers, increasing food and energy security in the area, maintaining sustainable farming practices, and offering “opportunities to buy commodities at production cost.” Yet its analysis also shows that, despite the backing of several big-name aid foundations and the involvement of Iowa State University, AgriSol will have the final say in all matters.

“Locals will have little to no bargaining power, and any development opportunities for local farmers will be on terms set by AgriSol,” the report determined. It also showed that a large share of similar deals are struck to increase production of biofuel crops, which is worrisome when considering Rastetter’s ties to the ethanol industry back home.

It’s not just the corporate oversight or dubious motives that are troubling; of more concern is where the Tanzanian government will relocate the thousands of refugees currently living on (and ironically, successfully farming) two of the three massive acreages. Though large-scale, industrial farms may churn out heartier harvests than displaced Burundian refugees, there is no guarantee that this will be done any more sustainably than it is in Iowa. (How long will it take a “dead zone” to form in Lake Tanganyika, do you think?)

As for the other parties involved in the deal, their intentions are equally as questionable: Executive Director of the Oakland Institute Anuradha Mittal called Iowa State University’s involvement a “greenwashing scheme,” while corporate backer Pharos Global Agricultural Fund has a history of investing in projects designed to return high yields to its investors.

(Rastetter is the CEO of Pharos Ag and donated $1.75 million to ISU’s College of Agriculture and Life Sciences in 2007. You may also remember Rastetter from the controversy surrounding his nomination to the state Board of Regents in April, after donating $160,000 to Gov. Branstad’s campaign.)

There’s no question that foreign businesses and multinational corporations are increasingly turning their eyes on the largely untapped markets of Africa. As demand and populations grow, so too does the need for sustainably produced food. But I wouldn’t place my bet on Rastetter’s “sustainable,” semi-altruistic agribusiness project.