Large-scale agricultural investments and rural development in Tanzania: lessons learned, steering requirements and policy responses

Topic :

Tanzania has a long tradition of large scale agro-investments (LSAIs), established during colonial and early post-independence, dismissed during socialist times. New efforts have been made to attract LSAIs, and many investors tried to establish them in the last 10 years, with limited success and frequent failures. Development impacts are heavily disputed. This study looks into the reasons for success or failure of investments, socio-economic impacts and the policies steering them. It is based on an empirical study with 276 qualitative interviews with various stakeholders in spring 2015 around ten LSAIs, all following the nucleus-outgrower model, in three different sub-sectors – sugarcane, tea, rice – in different phases of realisation: planning, establishment, full production and (close to) failure. Results show that there are many challenges to successfully implementing LSAIs in Tanzania, including the general agricultural and specific sub-sector policies, business environment, and particularly land issues. On the other hand, there seems to be considerable potential of these investments to support local development, in particular through providing employment, outgrower farmer incomes, infrastructure and corporate social responsibility projects as part of community compensation. The concrete business model influences the opportunities as well as risks, but no single model seems to be superior. In general, the policies to attract and steer LSAIs are not yet sufficiently developed, coordinated and implemented.

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