Deal #1839 Version #55772

215ha irrigated. In 2011, the company stated its intent to acquire an additional 5,200 ha of land, 20 km from Mngeta. However, Agrica’s CEO, Mr. Coleman, asserts that KPL no longer plans to expand beyond its Mngeta Farm (2015).

Purchase contract signed in 2006. One report states the KPL was established in 2007, with the acquisition of the farm completed in 2008.

First sales of processed rice in January 2010. The farm was originally started in 1986 as a project between former Tanzanian president Julius K. Nyerere and Kim Il Sung through a Tanzanian-North Korean government joint venture (KOTACO). KOTACO surveyed the farm, cleared the property, built 185 km of roads and approximately 290 km of drainage ditches, and started to produce rice on approximately 2,500 ha. After investing over $25 million in the unfinished project, KOTACO was liquidated in 1993, leaving the farm and its equipment with RUBADA. In 1999, the Mngeta farm was contracted to Kilombero Holding Company (KIHOCO). KIHOCO was never able to commence production on more than 400 ha, and after falling five years behind in rent payments, it was forced off the farm.

In July 2010, Agrica, was granted Strategic Investor Status by the Tanzanian government. The Strategic Incentives include exemptions from taxes and duties on fuel and imported equipment, including Agrica’s biomass plant and irrigation system.

250 farmers participated in 2011. Farmers have increased yields from one ton per hectare to 4.42 tons a hectare under the smallholder program. The company is currently searching for loan facilities for the smallholders, so that the company can sign an off-take agreement with the smallholders. This will replace the old debt system where the company granted cash to the farmers in lieu of crops. The debt was to be repaid in strict installments, many outgrowers were not able to. In addition, the outgrowers got paid a lower-than market related price for their output.