TRENDS AND IMPACTS OF FOREIGN INVESTMENT IN DEVELOPING COUNTRY AGRICULTURE

50 and 90 farmers under contract farming
arrangements. The ginneries will provide access to
upstream production inputs including pesticides
and fertilizers to be recovered from sales. The
scheme’s structure links farmers to specific
ginneries to avoid side-selling by farmers. The
role of ginneries is underwritten by a Cotton
Development Trust Fund (CDTF) supported by the
Tanzania Gatsby Trust and the Tanzania Cotton
Board.
The earlier acquisition or proposals for
acquisition of land in the United Republic of
Tanzania were problem prone, akin to most
others initiated in other African countries.
However, for very practical reasons, many of
those proposals were not carried through and
have eventually fallen apart as awareness rises
inside and outside the country, and there are
concerted movements against these initiatives.
Table 5 above presents a selection of cases of
significant land requests in Tanzania over the past
five years.
9. Issues and implications for
large-scale land investments
in the United Republic of
Tanzania
The Tanzania Investment Centre (TIC) plays a
hands-on role in facilitating land access, and
formal approval for the investment is needed
from the TIC (financial viability), the Ministry of
Agriculture (agricultural viability), the Ministry
of Lands and Housing Development (land
registration) and the Ministry of Environment
(environmental impact assessment). Coordination
and communication among government agencies
tasked with different aspects of the investment
process is poor, hampered in part by government
departments’ preference to report positive
outcomes only, without sharing problems and
setbacks.
The United Republic of Tanzania has to
undertake new and/or strengthen ongoing
reforms of its investment climate. Table 6 presents
a clear picture of the ease of doing business in
the United Republic of Tanzania and points the
way in areas where more attention is needed.
Part 3: Policies for attracting FDI and impacts
on national economic development
On the investor side, private investors have
the advantage of being able to act as a single
legal entity with a cohesive set of values.
Investors can only lease and use ‘general land’,
not ‘village land’. Land can be transferred from
‘village’ to ‘general’ status with the permission
of the local community. Prospective investors
start at the national level, with the Tanzania
Investment Centre, the one-stop-shop that
facilitates investment in the United Republic of
Tanzania, where they are required to demonstrate
the financial viability of the proposed project
in order to get a Certificate of Incentives. From
here they go to the district level, as advised and
facilitated by the TIC. In the simple case they
take up previously identified and surveyed land,
registered with the TIC “land bank”, but if all
or part of the proposed land area is still ‘village
land’, negotiations with local communities are
necessary. The investor must have the request
for land transfer approved in turn by the village
council (senior village representatives), the village
assembly (comprising all adult residents of a
village) and the district council land committee.
In principle the land transfer must also be vetted
by the Ministry of Lands, Housing and Human
Settlements Development.
Many companies have shown interest in
acquiring lands that are underdeveloped ‘general’
lands. For instance, a Swedish company requested
400 000 hectares for sugarcane production
in the Wami River basin in Bagamoyo District.
Evidence suggests that, if the deal went ahead,
about 1 000 small-scale rice farmers on these
lands would need to move, and would not be
eligible for compensation as the land is ‘general’
not ‘village’ land. The process of negotiation
over village land tends to be slow, in large part
because of the lack of precedent and guidance.
In one case, for instance, the investor FELISA
completed the process, securing approval for
350 hectares from two village assemblies, but
later received a message from one of the villages
withdrawing the offer as the land had apparently
already been allocated to another individual.
Intervention by local authorities resolved the issue
in FELISA’s favour, and arrangements have been
made for community infrastructure investment
and an oil palm outgrowing scheme, which have
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