Irresponsible investment: AGRICA's broken development model in Tanzania

Irresponsible investment: AGRICA's broken development model in Tanzania

Kilombero Plantations Ltd (KPL) is a 5,818 hectare (ha) rice plantation located in the heart of the fertile Kilombero Valley, Tanzania. In addition to developing a large-scale rice farm, KPL works with local smallholder farmers through an outgrower model based on System of Rice Intensification (SRI) technologies. The investment project receives considerable financial and technical support from various development institutions including the UK Department for International Development (DfID) and USAID.  This report presents the findings of an investigation carried out in Tanzania between 2011 and 2015 of KPL’s investment venture, focusing on the impacts experienced by surrounding communities.
The major findings of the report are as follows: First, while KPL is often portrayed as a truly responsible investment venture, villagers in the surrounding communities complain of adverse impacts on their livelihoods resulting from KPL’s acquisition of land. Despite the adoption of World Bank guidelines on involuntary resettlement which promises to improve, or at least restore, livelihoods of project-affected people, KPL has, in many cases, allegedly failed to safeguard the interests of local communities who instead report losses. Compensation offered for the loss of land and houses appears to have been largely underestimated, not allowing those displaced by the project to get access to adequate alternative land for their livelihoods.
Second, KPL’s SRI outgrower scheme was introduced as a way of complementing production on nucleus farms and to provide opportunities to local farmers. With the implementation of new technologies, farmers report improved yields and have even been found to outperform the KPL nucleus farm in terms of productivity per hectare. Despite an improvement in yields, local farmers allege that the outgrower scheme has left many in despair. Struggling with debt repayments, farmers report being forced into distress sales of their belongings. These problems are seemingly related to the outgrower contracts that smallholders entered into with KPL. In addition, according to previous employees, plantation employment has failed to generate tangible benefits for the local community due to low salaries and limited opportunities for recruitment to full-time positions.
Third, this report raises concerns about the environmental impact of the project in an area of high ecological and biodiversity value. The prolonged use of agro-chemicals raises concerns about the presence of their compounds in soil and water and the pollution of nearby rivers, streams, and wetland areas used by the local communities. Villagers surrounding the plantation allege having experienced several negative effects from KPL’s agro-chemical application regime due to drifting and surface run-off. Moreover, KPL’s future plans to utilize the nearby Mngeta River for irrigation are worrisome in a context where there is limited reliable information of both water availability and the water requirements of the complex floodplain ecosystem and downstream users. Experts claim that the Mngeta River is already experiencing effects of climate change.
In conclusion, this report illustrates the difficulties in creating beneficial synergies and balance between the interests of smallholder farmers and those of large-scale agribusinesses. It critically questions the role of large-scale farms in agricultural development as they tend to create more problems than they solve, even when they attempt to include small-scale farmers in their strategy. The findings presented in this report cast serious doubt on the substantial aid money directed towards supporting corporate-led agricultural development. This is especially relevant in the broader Tanzanian development context where large-scale agribusinesses are envisioned greater roles.

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