What is now happening in Tanzania should be an example of how not to behave if you want to help poor farmers make a living and feed their communities
By Chris Walker
Kilombero Plantations Ltd (KPL) is no ordinary rice farm. Based in Kilombero Valley, Tanzania, the company owns a 5,800 hectare plantation and buys rice from local farmers. Not only is it now the largest rice producer in East Africa, it's become a flagship for international backers hoping to prove that corporations can deliver economic development for communities.
A subsidiary of UK-based multinational Agrica, KPL is at the forefront of a series of initiatives backed by African and G8 governments, charged with attracting corporate investment in to Africa's food system. Bought by KPL in 2008, the plantation lies within the controversial Southern Agricultural Corridor of Tanzania (SAGC0T), a government initiative to help agribusiness access 350,000 hectares of prime farming land and establish industrial farming projects. KPL's project forms part of the Tanzania's deal with the G8's New Alliance for Food Security and Nutrition, a multi-billion dollar initiative that is using aid and corporate investment to leverage policy reforms that will help big business access land, seeds, and markets in ten African countries. Farmer groups in Tanzania and beyond fear that SAGCOT and the New Alliance could be a death blow for small-scale farmers struggling to keep control of their livelihoods, and have branded the projects "a new wave of colonialism." Undeterred, the UK government have announced they will directly co-finance KPL with £6.7 million. Global fertiliser and seed giants Yara and Syngenta are partners in the project.
Hailed as a "responsible investor"—and with backers keen to prove that what's good for corporate profit is good for poor communities—KPL is under pressure to deliver.
"With farmers being displaced and livelihoods hanging in the balance, the evidence is demanding that governments take a whole new approach building better food systems in Africa."
Yet a new report published by Global Justice Now, Oakland Institute and Greenpeace Africa today suggest all is not going so well for KPL. Not only do farmers displaced by the project complain of receiving inadequate compensation, KPL's outgrower scheme has left many in despair. KPL's outgrower farmers, who were required to buy seeds and fertilisers from the company and sell their produce back, reported falling in to dangerous levels of debt. This was made worse when KPL offered lower prices than expected. Locals reported low wages for casual labour with KPL, and that many of the promised jobs for farmers have not materialised. "Life now is very bad as compared to before," said one farmer. "Previously I was able to earn money from my own farm, but now I have to earn money by doing various small jobs for cash. Before, I was able to cultivate my own food. Now I need to buy the food with the small income I have."
With multinationals receiving negative publicity surrounding communities being displaced from land investments, many are now choosing to buy directly from farmers who own or lease their own land through 'outgrower' schemes. Such schemes are also becoming the preferred options for governments and backers in the development sector. Yet KPL's is one of a number of schemes on which farmers have reported getting a bad deal. In March, Action Aid reported that a similar outgrower scheme by Eco Energy in Tanzania, also backed by the New Alliance, saw farmers falling in to debt.
Since the G8's New Alliance was launched in 2012, governments and corporations are struggling to prove their positive impacts on communities. With farmers being displaced and livelihoods hanging in the balance, the evidence is demanding that governments take a whole new approach building better food systems in Africa. Across the continent, small-scale farmers are using their own solutions to sustainably increase yields and feed their communities, free from corporate control. With support from governments, these farmers could transform their food systems for the better.
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Chris Walker is a campaigns and policy officer at Global Justice Now.
A window of opportunity for African smallholders
The situation in Africa is very different. In West Africa, the development costs of large palm oil estates are more than twice as high as in Indonesia. These ventures are profitable only if the price of palm oil remains high. With low prices, these actors are now rethinking their investment and development strategies. Many projects have greatly downsized, postponed or abandoned oil palm development altogether. Structural factors such as the availability of, and access to, land for development is a key limitation, but this has been exacerbated by the current low prices for palm oil. Some companies, however, have sought to increase partnerships with the smallholder sector through outgrower schemes. Such schemes comprise a central milling facility that is supplied by smallholders who receive inputs and technical assistance from the company. In this way, the industries can meet their production targets while shifting the burden of development onto smallholders who become indebted to banks for the extended credit. Smallholder debts are gradually repaid as the Fresh Fruit Bunches are delivered to the industrial mill. In the past governments had to "force" companies to engage with smallholders, but today outgrower schemes are high on the companies' agenda. This opens a window of opportunity for small-scale farmers to enter the sector, benefiting from a more level playing field. It also, however, exposes them to higher risks. If the palm oil price continues to drop, smallholders might prove unable to repay their debts.
In Cameroon, in Central Africa, a handful of large players sought concessions for over a million hectares of forest for oil palm development as recently as 3-4 years ago . Many of these plans were abandoned even before the palm oil price declined, as the available lands were either covered by high forests or by smallholder food crop areas. As for the rest, low prices dissuaded many putative oil palm companies from pursuing further concession negotiations, or even taking up those already awarded. Indeed only two players, Herakles Farms and BioPalm, have begun to implement their plans. Even these investments appear half-hearted at best, as they have done little more than establish nurseries and have only just begun to clear a small fraction of the allotted concessions. As in West Africa, under current conditions the original targets are unlikely to be met, and the Cameroonian government could well end up rescinding many of the concessions. This provides an opportunity for the smallholder sector to fill the vacuum left by the large players. This opportunity is tempered, however, by limited access to industry outgrower schemes, which would otherwise give smallholders access to subsidized fertilizers, improved seedlings, capacity transfer and best practices, and, crucially, credit. As companies retreat from oil palm, possibilities for positive partnerships with smallholders evaporate. Thus in Cameroon, smallholders will have room to grow, but limited support will stymie their efforts to do so. The new National Strategy for the Development of Sustainable Palm Oil Production will likely oblige companies to work with smallholders, but the extent and depth of this obligation remains uncertain.
Debt and Despair: How Small-Scale Farmers Feel the Impact of So-Called "Responsible Investment" – PLEASE SGSOC STOP CONNING US AGAIN!!!!!!!
BetockVoices - The new out grower palm project by a UK investor in our region - That palm out grower scheme will leave many farmers reduced to debtors to the palm company, farmers are required to buy seeds and fertilisers from the company and sell their produce back, as oil palm prices are falling to dangerous levels in the world, these farmers will be in big trouble.