Deal #1889

Location #1

Spatial accuracy level
Administrative region
Location
Mbarali River, Tanzania

Target country
Tanzania
Comment on location
20km from Chimala. Mbarali District, Mbeya, Kapunga

Land area

Intended size (in ha)
7370.0
Size under contract (leased or purchased area, in ha)
[2006] 7370
Size in operation (production, in ha)
3000
Comment on land area
The Tanzanian authorities are asking the company to give 1870 out of the 7870 hectares back to the government, however they have hit reluctance from the company. The company claims to be well within its rights, because the deeds for Kapunga Rice Farm issued in 1995 clearly state that the total is 7370 hectares ( 3015ha were under production in 1995). The company believes the government is trying to expropriate their land and they want compensation. Another report states that the total hectares are 7130ha.

Intention of investment

Intention of investment
Biofuels, Food crops
Comment on intention of investment
Jatropha for biofuels and rice.

Nature of the deal

Nature of the deal
Lease

Negotiation status

Negotiation status
[2006] Concluded (Contract signed)
Comment on negotiation status
Previously state owned farm under NAFCO

Implementation status

Implementation status
[2012] In operation (production)
Comment on implementation status
NAFCO brought the farm into operation in 1991. ETG brought the farm into operation in 2012.

Contract farming

Contract farming
Yes
Not on leased / purchased area (out-grower)
Yes
Comment on contract farming
Sh1.8 million registration fee for willing farmers pay to cater for land preparation, seeds, fertilizer, water and harvest. After harvest the company deducts four tonnes per hectare from the produce.

Contract #1

Duration of the agreement (in years)
99

Number of jobs for foreigners created

Jobs created (foreign)
Yes
Current number of jobs (foreign)
20

Number of domestic jobs created

Jobs created (domestic)
Yes
Current number of jobs (domestic)
20
Comment on jobs created (domestic)
Low employment opportunities as the farm is highly mechanized.

Operating company

Name of investment project
Kapunga Rice Farm
Comment on investment chain
ETG through its 66% owned subsidiary Bio-Energy Investments. The company’s farms are managed and part owned by the South African company Verus Group.

 

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Data source #1

Data source type
Personal information
Includes in-country-verified information
Yes

Data source #2

Data source type
Company sources
File

Data source #3

Data source type
Media report
File
Date
2014-05-23
Comment on data source
Farm Land Grab- ETG ordered to hand back land

Data source #4

Data source type
Media report
File
Date
2015-03-24
Comment on data source
Farm Land grab- Land grabbing in Tanzania: The truth, fallacies and fights- part 1

Data source #5

Data source type
Research Paper / Policy Report
File
Comment on data source
Landlords in the making: class dynamics of the land grab in Mbarali, Tanzania. Elisa Greco. 2015

Data source #6

Data source type
Research Paper / Policy Report
File
Comment on data source
Oakland Institute- Understanding land investment deals in Africa: Country report- Zambia.

Data source #7

Data source type
Research Paper / Policy Report
File
Comment on data source
Grain The farmland grab in 2016: how big?how bad? June 2016

Consultation of local community

Community consultation
Limited consultation
Comment on consultation of local community
The villagers were not aware that the land they live on legally belongs to the investor.There has been protests by the villagers and confrontations between the villagers and investor.

How did the community react?

Community reaction
Rejection
Comment on community reaction
Villagers are unhappy with the project.

Presence of land conflicts

Presence of land conflicts
Yes
Comment on presence of land conflicts
The villagers were not aware that the land they live on legally belongs to the investor.There has been protests by the villagers and confrontations between the villagers and investor.

Displacement of people

Displacement of people
No
Number of people actually displaced
0
Comment on displacement of people
Kapunga village sits on 1,070 hectares and the villagers engage in smallholder farming on some 800 hectares but both parcels are property of the investor, legally. No displacement has taken place. 73 families were dispossessed and resettled in 1985 when the farm was originally established.

Former land owner (not by constitution)

Former land owner
State
Community
Comment on former land owner
Kapunga Rice Farm was planned as an irrigation scheme, and paid for by the Tanzanian government through an African Development Bank (AfDB) loan co-financed by the Nigerian government. The farm was built by expropriating village land in 1985.The farm was the property of the National Agriculture and Food Company (Nafco), which was privatized in 2006 after the collapse of the state-owned firm- capital intensive design, poor management, widespread corruption. However, long before the privatization, villagers had already moved in the then unutilised estate since in the early 1990s when Nafco was slowly dying; they settled in the area. State managers decided to rent out the farmland and machinery to private farmers, to use the rent income to keep the infrastructure up and running and to pay the staff. From 1997 to 2005, the NAFCO management stopped having any role in production and limited itself to repairing and managing the irrigation infrastructure, managing the farm as a paternalistic landlord. Since 1997, tenant farmers started running the estate by renting six-hectare plots. The organisation of production changed dramatically, as rice farming on the estate was demechanised, by employing wage workers in place of agricultural machinery. This caused a rapid, significant increase of wage labor, and migrant workers flocked to the area. In 2004, the government announced the imminent privatisation of NAFCO-Kapunga. NAFCO tenant farmers established a cooperative society – the Chimala Agricultural and Marketing Cooperative. They then demanded that the government sell Kapunga Rice Farm to their coop. The cooperative failed to mobilise local support.

Former land use

Former land use
Smallholder agriculture

Former land cover

Former land cover
Cropland

Detailed crop, animal and mineral information

Crops area
Barley, Jatropha, Rice

Use of produce

Has domestic use
Yes

In country processing of produce

In country processing of produce
Yes
Comment on in country processing of produce
RIC (Rice processing);AGF (Agrofuel production)

Water extraction envisaged

Water extraction envisaged
Yes

Source of water extraction

Source of water extraction
Surface water (River)
Comment on source of water extraction
Mbarali River

Overall comment

Overall comment
This is a case where conversion from rice to jatropha has been halted by the government- in 2007/8, ETG tried to convert Kapunga Rice Farm from rice farming to jatropha, through a joint venture with a South African biofuel company; a private investor is nonetheless seriously disrupting rice production in a key rice producing area, because of plans of conversion and claims over village land. Data source- Landlords in the making: class dynamics of the land grab in Mbarali, Tanzania- provides in-depth information on the privatization, and early years of ETG.

Dec. 6, 2019, 9:14 a.m.

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Nov. 17, 2016, 10:08 a.m.

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Oct. 27, 2016, 2:37 p.m.

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May 12, 2016, 5:41 p.m.

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Jan. 7, 2016, 12:56 p.m.

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March 27, 2015, 11:14 a.m.

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May 23, 2014, 6:12 p.m.

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March 30, 2014, 3:06 p.m.

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July 9, 2013, 2:37 p.m.

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April 2, 2013, 8:02 p.m.

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March 14, 2013, 2:03 p.m.

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Feb. 15, 2013, 5:03 p.m.

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