Skip to main content Skip to footer

Basu: AgriSoil Still Has a Lot to Prove

August 1, 2012
Des Moines Register

Bruce Rastetter and his AgriSol Energy colleagues came to the newspaper recently to rebut criticisms that the corporation, of which he is 30 percent shareholder and managing director, is making a land grab in Tanzania. In spite of their PowerPoint presentation and talking points, the company has more to do to prove its intentions are honorable.

It was reported that AgriSol officials stood to make $300 million from a deal that would have given it 99-year rights to cultivate land for as little as 25 cents an acre, while forcing the evacuation of refugees living there. AgriSol denies the profit amount, but acknowledges the cheap rent and says it wasn’t responsible for the evictions. It claims to have pulled out of that project. Yet the company’s website still talks about “discussions with the local and national government officials about developing farms at Katumba and Mishamo in the future.”

For now, the officials say, they are developing a model commercial farm in Kigoma in western Tanzania. They concede 25 cents an acre rent is low, but say the figure is set by statute, since all land is government owned.

For context, I contacted Mwangi Kimenyi, director of the Brookings Institution’s Africa Growth Initiative. “Just because the government says the price is 25 cents — to me, that is totally ridiculous,” Kimenyi said. He said the government may be the custodian of that land, but Tanzanian people are considered its rightful owners, and it’s not for government to give it away. “Some people will benefit, but the common people will not benefit,” he said.

AgriSol has paid Tanzanian government officials, including one who was in charge of the refugee camps, to be advisers on the project. Rastetter claims others there don’t have the know-how. Kimenyi, however, says such payments can amount to outright corruption. He said “a few individuals in government who are not transparent” then negotiate terms that undermine people’s rights.

Rastetter further claims the company plans to invest $100 million over 10 years in infrastructure improvements in Tanzania, including water, power and storage. “That land was worthless without power, electricity, roads,” said Henry Akona, AgriSol Tanzania’s spokesman. “They need a company like AgriSol to come in and build that.”

But if the Oakland Institute, a California-based think tank that has had researchers in Tanzania investigate the previous AgriSol deal, is correct, AgriSol also demanded the Tanzanian government give it “strategic investor status,” which would grant it tax exemptions and a waiver of duties. And they asked the government to commit to constructing a rail link.

As to the promise of creating water supplies, Kimenyi said he has visited some large investor-owned farms in Africa, such as Del Monte’s in Kenya, where water is diverted for the company’s use. “They’re not interested in what happens downstream,” he said.

Rastetter boasts AgriSol “can be the Iowa of Africa.” Is that even feasible? Kimenyi knows Iowa’s farms because his son went to Iowa State University. African farmers do need help with technology and increasing productivity, he said. So he sees a place for large farms producing high-yield crops.

But as a model, he holds up the Clinton Foundation’s work in Malawi, where it leases and operates a large, so-called “anchor” farm and uses proceeds to extend credit to small farms. The project helps small farmers aggregate their output, get access to markets for their crops, negotiate prices and buy high-quality seeds and pesticides.

“It’s a large lease but not a land grab, because there are clearly defined objectives,” Kimenyi said.

AgriSol officials speak of doing similar things to help small farmers with eduction and “outgrower” programs. They claimed, in response to the earlier fiasco, that they would build schools and a health clinic and bring jobs. But the Oakland Institute pointed out that the company’s business plan and other documents do not mention such plans. “The tragedy,” Kimenyi says of some companies coming in, “is that they’re even entering agreements that the foods they grow do not have to enter the domestic market.” They may not create jobs because they bring their own labor and advanced technologies.

Up to 70 percent of Africa’s population is rural and depends on eating what the land produces. While development is necessary, the traditional, varied crops must be maintained to provide balanced diets, Kimenyi said.

The number of voices accusing AgriSol of being bad for Tanzania is growing. Whatever comes of the ethics issues involving Rastetter, what’s really at stake is whether African lands will be developed to benefit Africa’s people or be allowed to be a giant profit-making venture for foreign corporations.

If one thing has become clear, it’s the need to look at the fine print.