Rastetter Breaks his Silence on AgriSol Project
By Hannah Furfaro
AgriSol Energy’s intentions to build industrial farms in Tanzania have been misrepresented by the media and advocacy groups, according to Iowa Board of Regents president pro tem and agriculture entrepreneur Bruce Rastetter, who sat down with the Ames Tribune for an interview about the project Wednesday.
In an attempt to quell some of the controversy surrounding his involvement in the $100 million agriculture project, Rastetter discussed his participation after a year of silence.
Rastetter, co-founder and managing director of AgriSol Energy, the company that plans to lease land and develop farms in rural Tanzania, said criticism of his project has largely been unfounded, particularly in regard to claims that the company was involved in the relocation of Burundian refugees occupying land AgriSol planned to farm.
AgriSol has received criticism from media outlets and watchdog groups based on a 2010 blueprint and Memorandum of Understanding with the Tanzanian government that shows AgriSol’s plan to do feasibility studies on land occupied by 160,000 Burundian refugees who have been living there for 40 years.
“That’s one of the really unfortunate parts about this project that wasn’t cleared up, and we’ll take some of the blame for that,” Rastetter said. “We would never have built … where there are refugees. At the same time, when the (Tanzanian) government says, ‘Here’s the set of land you can look at,’ you look at it. As we learned there were problems with the refugees, then we focused on the property that we ended up with the actual lease on.”
The project aims to create what Rastetter calls an “outgrower program” in Tanzania. Rastetter said small-holder farmers would be supplied inputs, such as seed and fertilizer, and would be given the option to sell their crops to AgriSol, which would then produce value-added products such as cooking oil and chicken feed. AgriSol would also provide equipment and land to the small-holders, Rastetter said. AgriSol plans to invest $100 million in the project over a 10-year period, he said, and would have the option to export its goods to surrounding countries.
Tanzania, situated in eastern African between Kenya and Mozambique, has been focused in recent years on agricultural development through the government’s “Kilimo Kwanza,” or “Agriculture First” initiative. The nation has a history of exporting coffee, cotton and minerals, such as gold.
According to African Economic Outlook, an organization that consolidates economic data from the United Nations and the African Development Bank, Tanzania has increased its regional and international trade since the 1990s. Imported goods including oil, machinery and raw materials, have doubled from 16 to 31 percent of the country’s gross domestic product since 2003, the AEO report shows.
Tanzania has also become a net importer of vegetable cooking oil, according to a recent report from the Food and Agriculture Organization for the United Nations. Henry Akona, AgriSol’s director of communications, said the AgriSol project would help reduce the amount of cooking oil Tanzania imports each year by 20 percent.
Until Wednesday, details on AgriSol’s plans have remained largely out of the media spotlight. Reports have focused chiefly on Rastetter’s role as a regent and the scheduled removal of Burundian refugees who live on the land.
The refugees, who fled to Tanzania following the Hutu-Tutsi conflict in the early 1970s, are currently living in two western regions of the country.
Plans between the Tanzanian government and the United Nations, which intended to grant the refugees citizenship and integrate them into other parts of Tanzania within two years, were scheduled to take place beginning in 2007, the same year AgriSol initially became involved in the project. After the 2008 global financial collapse, Rastetter said those relocation plans were delayed.
Rastetter, who has taken heat from a California-based advocacy group called the Oakland Institute for continuing to move forward on the occupied plots as recently as 2011, said AgriSol wasn’t aware that the refugees were still on the land. Akona admitted AgriSol mistakenly assumed the refugees had been moved off the land by 2009.
“We went back to the region and we had erroneously assumed that because it was scheduled to be cleared by 2009, they were,” he said. “That was a mistake. We didn’t do our homework, and we should have said, ‘Are these really (cleared)?’”
AgriSol has since abandoned plans for the two plots where refugees live. While AgriSol has signed a 99-year lease on a 35,000-acre unoccupied region called Lugufu, Rastetter said the Memorandum of Understanding for the two occupied plots is set to expire in August, and AgriSol does not plan to renew the memorandum.
AgriSol has also come under fire for its agreement with the Tanzanian government to lease land for 25 cents an acre.
Rastetter addressed the price, noting that AgriSol is expected to establish infrastructure such as roads, schools and storage facilities when it signs leases.
“You will in essence spend on your land what you would spend purchasing land in other parts of the world,” he said. “The lease is low, you spend that money and then what it does, is … those (farmers) benefit from that infrastructure investment and the creation of the market.”
Akona said outside investors have to be “holistic and simultaneous” in their efforts because much of Tanzania is underdeveloped. Parts of the region AgriSol hopes to farm don’t have consistent electricity or running water, he said.
An advocacy group called Iowa Citizens for Community Improvement has called Rastetter’s project a “land grab” and a get-rich scheme for the company’s investors.
Rastetter countered those claims Wednesday, saying, “We have never thought about the project that way.”
“If I was certainly in it to make money, and just make money, I would invest in agriculture in a whole lot of other areas than Tanzania,” he said.
Rastetter said one goal is to be financially successful. But, he said, he is also interested in creating food safety and economic stability in the region.
After stepping down in 2007 from leadership positions at various companies where he has financial holdings, Rastetter said he decided to become more involved in philanthropy. Becoming a regent and developing the project in Tanzania, he said, were both steps in that direction. Rastetter has also given $2.25 million to ISU, which endowed the Rastetter Chair of Agricultural Entrepreneurship.
Citing a recent visit by Tanzanian President Jakaya Kikwete to the G8 Summit in May, Akona said there is a “global consensus” about public-private partnerships and foreign investment in countries that are struggling economically.
“What did he talk about? Private-public partnerships in agriculture,” Akona said of Kikwete’s G8 visit. “He didn’t talk about agriculture subsidies, he didn’t talk about food aid; he talked about ways to grow more food in Tanzania and this was a bipartisan issue. People are trying to portray this as this Republican agribusiness conspiracy. This is the way forward. That debate is over.”
Critics, including Iowa CCI, have said AgriSol stood to gain upwards of $300 million a year from the project. Rastetter said that number was “simply made up.”
“The part that’s unique is that you not only have to have someone who wants to invest, but it also has a philanthropic part to it because it’s not like it’s a large return like you would have going to Brazil or going elsewhere,” he said.
Rastetter had declined to speak to the media about the project until this week. He said his decision to speak on the record, in part, was based on misunderstandings about the project. After officials from ISU’s College of Agriculture and Life Sciences, who were initially involved in the project, discontinued their participation, Rastetter said he felt more comfortable opening up. His position as a regent, he said, made the situation vulnerable.
Rastetter is fighting an ethics complaint that alleges his dual positions as a regent and a business partner with ISU, a university the regents govern, created a conflict of interest.
“I couldn’t come out and say all those things, or at least I felt like I couldn’t,” Rastetter said. “I probably should have still anyway, but I felt I shouldn’t. But when Iowa State removed themselves from the project and there continues to be controversy, it’s time to just come out and tell you what the project is and what it isn’t.”
ISU faculty and administrators, who were initially involved in both private contracting activities and the development of an educational outreach program for Tanzanian farmers, pulled out of the project in February. In a statement at that time, Wendy Wintersteen, dean of the agriculture college, cited negative media attention and misunderstandings about the project as the primary reasons why ISU pulled out.
Rastetter said he was “disappointed” ISU ended its involvement, but that he understands the university’s decision.
“Am I disappointed that Iowa State withdrew?” he said. “Yeah, sure I am, because I think it was a good project for them to be involved with or I wouldn’t have gotten them involved prior to being a regent.”