TRENDS AND IMPACTS OF FOREIGN INVESTMENT IN DEVELOPING COUNTRY AGRICULTURE

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TANZANIA Trends and impacts of foreign investment in developing country agriculture Development (MLHHSD), responsible for policy formulation and oversight of land administration functions with a network of six zonal offices. Policy implementation is mandated to the Prime Minister’s Office, Regional Administration and Local Government, which oversees the operations of Local Government Authorities (LGAs). The LGAs, on their part, coordinate and oversee the operations of village governments and councils who have the legal mandate for land administration and management of village land, where the bulk of land resources are located. In 2010, the number of LGAs was increased from 134 to 168 councils overseeing land management through approximately 14 000 villages. Institutional capacity is a factor of technical capacity embedded in human resources, systems and procedures and equipment and infrastructure for land administration ranging from surveying and mapping facilities to modern ICT-based registries located at the district level. Available information points to an employment gap of 75 percent of requisite technical staff for land administration in the two ministries. The United Republic of Tanzania has a large pool of potential professional land administrators graduating from Ardhi (Land) University, dedicated to land administration services, with a first year student population of 2 866 in the 2009/10 academic year compared to 2 221 in the 2005/06 academic year 61 . The presence of this large pool has not translated into higher land administration capacity due to limitations in recruitment and limited public-private partnerships in this area. These shortcomings reinforce the implementation weaknesses stemming from rent-seeking tendencies reinforced by lack of transparency in an environment where the central land registry still operates largely as a paper-based system. 61 Ministry of Finance and Economy, United Republic of Tanzania; Economic Survey for 2006, 2007, 2008 and 2009. 76 8. Recent trends in large-scale land investment in the United Republic of Tanzania The available information shows that most land acquisition for agricultural investments in Tanzania is largely still at the request stage, for which approval may not have been granted as yet. According to one source, in 2009, a total of 4 million hectares were requested by foreign investors. The largest requests emanated from SEKAB which had reportedly requested a large area in Bagamoyo (that could reach up to 400 000 ha) and 500 000 hectares in Rufiji, for sugar cane production. Sulle and Nelson (2009) argue that a British energy company, the CAMS Group had also acquired 45 000 hectares for sweet sorghum production while another British company, Sun Biofuels, acquired over 8 000 hectares in Kisarawe. 62 Although these figures are large, there is evidence that only a small share of the requested area was eventually acquired. However, there is an increasing trend of acquisition of land by small and medium farmers in Tanzania, which is apparent in the data on farms that were surveyed and registered during the 2004 to 2010 period. Data published through the Minister for Lands, Housing and Human Settlement Development budget speech for 2009/2010 shows that a total of 623 farms out of a target of 800 farms were registered during the period July 2008 to June 2009. Further, the Ministry was targeting to register a total of 1 000 farms between July 2009 and June 2010. Sixty two percent of the 623 farms registered in 2008/2009 – equivalent to 386 –were located in three regions, i.e. the Coast region (174), the Tanga region (125) and the Morogoro region (87) that happen to be the favourite destinations of large TNC agricultural investors because of the prime arable agricultural land, good climate, reliable rainfall patterns and easy access to surface water resources for irrigation purposes 62 Sulle, E. and F. Nelson F. (2009), Biofuels, land access and rural livelihoods in Tanzania, in Theting & Brekke, Land Investments or Land Grab? A critical view from the United Republic of Tanzania and Mozambique.
TABLE 5 Status of recent investments and business models Company Location District Crop Land Requested Previous Land Status Business Model Notes (ha) Status Bagamoya sugarcane 24 200 govt ranch/TIC land granted by TIC de- 90% estate; 10% Rufjii sugarcane 250-500 ‘(000) village land rivative right in progress outgrowers or land acquisition progress block farming Only a small portion fo the land is under cultivation deal is questionable due to the withdrawal of financial support from Scandanavian pension fund on grounds that the deal risk displacing local communities Sekab BT (Sweden) FELISA Kigoma 1 Oil palm 10 000 TIC land bank land acquisition in prog- Hybrid estate & (Belgium) ress under negotiation outgrowers Kigoma 2 village land Sun Biofeuls Kisarawe Jatropha 50 000 village land 12 transferred from village estate and pos- villages to general land sibly outgrower Diligent Arusha Jatropha none n/a n/a contract farming (Netherlands) BioMassive AB Lindi Jatropha village land 66 year leashold agree- (Sweden) ment with Lindi district council Company has avoided payment of land citing that contract stipulates that it can only pay for acreage cultivated not total acquired. The company is still trying to raise funds for the project. contract area is one-third of surface area of the district Part 3: Policies for attracting FDI and impacts on national economic development Kilwa Jatropha village land 50 year lease signed between company and villagers BioShape (Netherlands) half of the land will be developed and givenb to the local farmers and the rest will be used by KRC to process cocking oil wine and starch include plans for a food processing centre and technology transfer (irrigation) 75% US and 25% Tanzanian - held by former senior cabinet minister. Deal does not conform to Tanzanian law on shareholding can be equal to more but not less 325 117 Joint venture b/w KRC and Tanzania govt thru Rufjii Basin Development Authority Rufjii Agro-processing KRC (South Korea) MOU signed b/w Mpanda district government and AgrSol AgriSol (USA) Mpanda & Kigoma refugee camps Katumba - 80 317 ha Mishamo - 219 800 ha Lgufu - 25 000ha Source: : Compiled by authors from various sources 77 TANZANIA
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TRENDS AND IMPACTS OF FOREIGN INVES
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Trends and impacts of foreign inves
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Acronyms ABRAF Brazilian Associatio
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EAC East African Community EC Execu
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JV Joint Venture Kascol Kaleya Smal
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PTF Privatization Trust Fund PTS Pe
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Foreword Large-scale international
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xvi Page 4. The business climate fo
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xviii Page 4. Investments by transn
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xx Page 7. Conclusions and recommen
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xxii Page SENEGAL: ASSESSING THE NA
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xxiv Page PART 5: SYNTHESIS OF FIND
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TANZANIA: ANALYSIS OF PRIVATE INVES
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ZAMBIA: INVESTMENT IN AGRICULTURAL
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xxx Page Table 4 Foreign investment
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xxxii Page Table 5 Additional tax b
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PART 4: BUSINESS MODELS FOR AGRICUL
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P A R T O N E INTRODUCTION
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1. Introduction 1 Foreign Direct
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FIGURE 2 Trends in FDI-African case
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FIGURE 6 Average annual growth in c
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FIGURE 9 Share of agriculture in to
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FIGURE 12 FDI flows to agriculture
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Page 67 and 68: Improving the business climate for
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Page 89 and 90: the priority indicators within thes
Page 91 and 92: 73 rd in a total of 182 countries e
Page 93 and 94: Sutainable Development: Lessons fro
Page 95: World Bank. 2009. Awakening Africa
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Page 129 and 130: : Foreign investment and agricultur
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Page 135 and 136: Students are entitled to tuition fe
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TABLE 1 Investment incentives, Ugan
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TABLE 3 Summary of enterprises in c
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Over 95 percent of the total annual
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CHART 1 Uganda coffee value chain C
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CHART 2 Value chain of chrysanthemu
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CHART 3 Value chain for fish proces
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companies and fully owned subsidiar
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(a) the decreasing fish stocks and
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TABLE 5 Sources of investment finan
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Part 3: Policies for attracting FDI
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TABLE 6 Market destinations for sel
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BOX 9 Community services provided b
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BOX 10 Examples of environmental im
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contributed to opening internationa
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Websites 1. faostat.fao.org 2. htt
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Local impacts of selected foreign a
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linkages; unsecured land ownership;
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hectare and 1.5 tonnes per hectare,
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3.2 FDI in agriculture by nationali
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form of pure Korean ownership or pa
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of the discrepancies between CDC da
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TABLE 7 Distribution of ELCs by nat
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the country’s economy. It is ther
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on forest use 13 . Across the count
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The National Strategic Development
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team in December 2010 in the Kompon
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order to transport materials and wo
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other agricultural purposes, but la
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stream (one that is 20-30 m wide) a
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MAFF, prohibited the import of live
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7.5 NGOs/Civil society Local NGOs
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: business models in Ghanaian agri
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TABLE 3 FDI agricultural projects a
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Part 4: Business models for agricul
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level of foreign ownership for each
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land disputes, slowing and complica
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TABLE 6 Ease of doing business in G
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TABLE 8 Selected indicators of the
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estate and out-grower scheme for th
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vice-chairman, secretary, assistant
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are exported, 40 percent are sold t
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strong advocate of bush fire preven
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chiefs, irrespective of whose land
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The Assemblyman of Jimle, a locally
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TABLE 12 Key features of the Solar
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given the lengthy time frame involv
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ESD (Environmentally Sustainable De
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Large-scale agricultural investment
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Touré, 2009). So, agricultural mod
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the lineage holdings to one family
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BOX 2 Content of agricultural inves
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of largescale land acquisitions. 6
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percent); and students, undoubtedly
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BOX 4 The conclusions of the feasib
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Malians. Significant players includ
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out in the absence of strategic pla
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ESIAs. The mass influx of foreign i
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objectives, but the contract makes
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in the sugar sector. The aim was to
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stresses the government’s respons
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covering 857 hectares of land, plus
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Final remarks about project design
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As a result, activities to implemen
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and rural electrification (Agence M
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shareholders began to ask questions
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so far. The revenues received from
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were allocated to investment projec
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family farmers to have access to le
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SENEGAL Trends and impacts of forei
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ZAMBIA Trends and impacts of foreig
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The findings of the studies present
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3. The significance of business mod
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were introduced to enhance producti
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The presence of enabling factors is
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5.8 Type of production system and c
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The available data confirm that the
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the project. This situation increas
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debates on resource-seeking foreign
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programmes for government officials
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EDITED BY: Pascal Liu Suffyan Korom
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TRENDS AND IMPACTS OF FOREIGN INVESTMENT IN DEVELOPING COUNTRY AGRICULTURE

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